New brokers enjoy trading
KATHMANDU, NOV 5:
The fresh batch of stock brokers in the capital market is content with the business they are able to attract in current market scenario.
“Initially we were fearful about the business prospects as the market was not doing too well but almost all of the new ones are able to do good enough business,” informed Bharat Ranabhat, managing director of Kohinoor Investments, one of the new brokerage firm. “Almost all the new brokerage firms are handling daily transactions ranging from Rs 600,000 to Rs 800,000 on an average.”
After waiting for almost four years 16 stock brokers finally got the green signal to start their operations in Nepal Stock Exchange (Nepse) from mid September. There are now total of 18 new brokers that have been awarded licence by the regulator — Securities Board of Nepal (Sebon) — to perform the brokerage service.
“Even in the first two months of operation we have reached the break-even point that tells the situation is not bad at all,” pointed out Ranabhat.
The new brokers had started the operation around the time Nepse index reached the lowest point in the past six years. There were doubts regarding sustainability of the new brokers when the number of investors had started to contract.
“We are still dependent on old investors for bulk transaction but we are servicing new clients as well,” informed Shiva Hari Mainali, managing director of Dakshinkali Investment and Securities, whose clientele has exceeded 1,000 just in a couple of months. “We are trying to appeal to the investors by giving better service,” he expressed.
New brokers were expected to start the operation along with Central Depository System (CDS), however, CDS is yet to get started due delay in preparing their bylaws.
But the sixteen new brokers have started their trading in the existing system. Earlier, Nepse had decided to add 27 more brokers to the existing 23 brokers to make the total number to 50, in November 2007.
Due to the limited number of brokers small investors were finding it difficult to transact in the secondary market as the brokers did not use to entertain small investors in the heydays of Nepali share market.
The selection process got interrupted by Commission for Investigation of Abuse of Authority in February 2008 questioning the transparency of process.
Finally, after much delay and coaxing, the selection test took place on October 2010.
Source: THT
