Nepse’s automation plan inches forward

KATHMANDU, APR 10 -

The Nepal Stock Exchange (Nepse) is making another attempt to install a fully automated trading system and has issued a global invitation for expressions of interest (EoI) from suppliers.

Earlier, the governments of India and Singapore had pledged to help Nepse upgrade its existing software. The country’s sole share market had also signed an accord with the Korean Stock Exchange to make it its strategic partner in return for improving its software free of cost.

After these deals fell through, Nepse has been scouting around for consultants to install an automated trading system.

This is the second time that Nepse has called for EoIs as the domestic firms that responded the first time were declared ineligible. The three local bidders did not have the required number of years of experience working in the stock exchange.

The existing semi-automated system at Nepse was installed seven years ago on a temporary trial basis.

India had pledged to support the development of Nepal’s capital market during the Madhav Kumar Nepal administration. The Central Depository System (CDS) and the clearing system were launched with the help of the southern neighbour.

It had also asked Nepse to submit a scheme to start a fully automated system. Although Nepse submitted the proposal, it failed to follow up on the matter and was forced to purchase new software.

Nepse had signed a memorandum of understanding with the Korean Stock Exchange when Shankar Man Singh was the general manager. Singh said that the Korean company had even showed interest to become a strategic partner and had asked for a 10 percent share for its support to automate the secondary market. However, no efforts were made to implement the agreement.

Similarly, a Singaporean company Info Trade had agreed to support Nepse in collaboration with the Singaporean government. Nepse officials had also travelled to Singapore to study the system there, but the plan was abandoned midway.

Nepse officials said that apart from these companies, the National Stock Exchange and the Bombay Stock Exchange of India and the Karachi Exchange and the Islamabad Exchange of Pakistan had been keen to become strategic partners.

“However, the government’s ownership of Nepse complicated the situation of bringing a strategic partner,” said a former Nepse chairman.

Source: The Kathmandu Post