Promoters should be allowed to sell shares‚ says Pratt
KATHMANDU, July 9:
In order to encourage diverse companies to enter the capital market, expert suggested removing regulation that prevents promoters to sell their shares within a specific period.”The lock in period for promoter’s shares is one of the reasons that have created barriers for enterprises to enter the market,” said Richard Pratt, consultant for the Five Year Capital Market Master Plan here today in the valley.Since, the entrepreneurs can not disinvest at their convenience they are little inclined to get listed,” he said, adding that it is impractical to distinguish between promoter’s shares and ordinary shares.
The Master Plan is supposed to revamp the capital market. The expert also recommended allowing the issuer to fix the issue price so that more diverse companies will enter the capital market. “The restriction on issue prices without the consideration of market price has discouraged the enterprises to issue the shares to public,” he said, adding that the retail investors also see the primary offers as lottery tickets where they can make fortune by little investment.“They do not look forward to these shares as a continued source of income giving rise to speculative trading,” he added.
He also blamed forced listing such that of financial institutions of creating distortion as these reluctant issuers do not even comply with disclosure requirements. Pratt expressed the need of risk management provision in settlement system and compliance of regulations by the listed companies and stakeholders along with strengthening of the regulator’s capacity and autonomy to attract the institutional investors in secondary market. The absence of institutional investors have made the market more volatile and speculative, he sadi.
Sebon’s chairman Dr Shurbir Paudyal expressed that the Master Plan has to be realistic and the plans prepared on it has to be implemented for the best result.
“The capital market does not reflect the financial and economic health of the nation,” former member National Planning Commission Dr Pushkar Bajracharya, said, adding that when the Nepse index had reached its peak of 1,175 points in 2008 and the level that it is shimmering over 350 points is not in sync with the actual economic picture and financial health of corporate sector.
He expressed his hope that this five year Master Plan will make the capital market more transparent and vibrant making it reflect the corporate sector growth.
Former governor of Nepal Rastra Bank (NRB) Dipendra Bahadur Cheetri pointed out that the movements of Nepse on either direction without any apparent reason as the market is ruled by whims, rumours and ill advices.
Source: THT
In order to encourage diverse companies to enter the capital market, expert suggested removing regulation that prevents promoters to sell their shares within a specific period.”The lock in period for promoter’s shares is one of the reasons that have created barriers for enterprises to enter the market,” said Richard Pratt, consultant for the Five Year Capital Market Master Plan here today in the valley.Since, the entrepreneurs can not disinvest at their convenience they are little inclined to get listed,” he said, adding that it is impractical to distinguish between promoter’s shares and ordinary shares.
The Master Plan is supposed to revamp the capital market. The expert also recommended allowing the issuer to fix the issue price so that more diverse companies will enter the capital market. “The restriction on issue prices without the consideration of market price has discouraged the enterprises to issue the shares to public,” he said, adding that the retail investors also see the primary offers as lottery tickets where they can make fortune by little investment.“They do not look forward to these shares as a continued source of income giving rise to speculative trading,” he added.
He also blamed forced listing such that of financial institutions of creating distortion as these reluctant issuers do not even comply with disclosure requirements. Pratt expressed the need of risk management provision in settlement system and compliance of regulations by the listed companies and stakeholders along with strengthening of the regulator’s capacity and autonomy to attract the institutional investors in secondary market. The absence of institutional investors have made the market more volatile and speculative, he sadi.
Sebon’s chairman Dr Shurbir Paudyal expressed that the Master Plan has to be realistic and the plans prepared on it has to be implemented for the best result.
“The capital market does not reflect the financial and economic health of the nation,” former member National Planning Commission Dr Pushkar Bajracharya, said, adding that when the Nepse index had reached its peak of 1,175 points in 2008 and the level that it is shimmering over 350 points is not in sync with the actual economic picture and financial health of corporate sector.
He expressed his hope that this five year Master Plan will make the capital market more transparent and vibrant making it reflect the corporate sector growth.
Former governor of Nepal Rastra Bank (NRB) Dipendra Bahadur Cheetri pointed out that the movements of Nepse on either direction without any apparent reason as the market is ruled by whims, rumours and ill advices.
Source: THT
