Ministry mulls ways to boost market
KATHMANDU, May 26:
Concerned with the present dismal performance of the secondary market, Ministry of Finance held a discussion on measures to improve the market today.
The meeting concluded on pursuing privatisation of Nepse to make the stock market more competitive and efficient at par with international stock exchanges that could boost the investors\' confidence.
The meeting — led by finance secretary Krishnahari Baskota — saw the participation from the officials of Nepal Stock Exchange (Nepse) and the ministry, according to the Nepse that is currently hovering around 340 points creating panic to investors and regulators, both.
\"The government has already encouraged institutions like Employee\'s Provident Fund, Rastriya Beema Sansthan, Citizens\' Investment Trust to make portfolio investment in the secondary market,\" a ministry official said, adding that they have also reacted positively.
Establishment of CDS and Clearing will boost the capital market as the central depository system (CDS) will make the transaction swifter, the ministry official said, adding that Nepal first CDS company will start its operation within next few months.
Since last one-and-a-half year, the secondary market index has been continuously dropping. In the fiscal year 2009-10 alone, the number of shares traded has declined by 14.13 per cent compared to a fiscal year ago in 2008-09. In last fiscal year, the secondary market observed about 26.23 million units of share changing hands while in the fiscal year 2008-09 — 12 times more to — almost 305 million unit shares were traded.
The plunging share prices in the last fiscal year have caused the market capitalisation also to decline by 26.25 per cent in the last fiscal year that has reduced to Rs 377 billion from Rs 516 billion, despite the increasing numbers of securities being listed.
The transaction volume has also gone down from Rs 21.68 billion in the fiscal year 2009-10 to Rs 11.85 billion in the last fiscal year, according to the Nepse. \"The average transaction volume has dropped to Rs 52.7 billion in the last fiscal year.\"
Source: THT
Concerned with the present dismal performance of the secondary market, Ministry of Finance held a discussion on measures to improve the market today.
The meeting concluded on pursuing privatisation of Nepse to make the stock market more competitive and efficient at par with international stock exchanges that could boost the investors\' confidence.
The meeting — led by finance secretary Krishnahari Baskota — saw the participation from the officials of Nepal Stock Exchange (Nepse) and the ministry, according to the Nepse that is currently hovering around 340 points creating panic to investors and regulators, both.
\"The government has already encouraged institutions like Employee\'s Provident Fund, Rastriya Beema Sansthan, Citizens\' Investment Trust to make portfolio investment in the secondary market,\" a ministry official said, adding that they have also reacted positively.
Establishment of CDS and Clearing will boost the capital market as the central depository system (CDS) will make the transaction swifter, the ministry official said, adding that Nepal first CDS company will start its operation within next few months.
Since last one-and-a-half year, the secondary market index has been continuously dropping. In the fiscal year 2009-10 alone, the number of shares traded has declined by 14.13 per cent compared to a fiscal year ago in 2008-09. In last fiscal year, the secondary market observed about 26.23 million units of share changing hands while in the fiscal year 2008-09 — 12 times more to — almost 305 million unit shares were traded.
The plunging share prices in the last fiscal year have caused the market capitalisation also to decline by 26.25 per cent in the last fiscal year that has reduced to Rs 377 billion from Rs 516 billion, despite the increasing numbers of securities being listed.
The transaction volume has also gone down from Rs 21.68 billion in the fiscal year 2009-10 to Rs 11.85 billion in the last fiscal year, according to the Nepse. \"The average transaction volume has dropped to Rs 52.7 billion in the last fiscal year.\"
Source: THT
