Share Laganikarta Sangh Nepal Reprimands Abuse of Authority by NEPSE and Regulator; Urges Stakeholders to Lift Limit on Margin Loan and CD Ratio Provision

Share Laganikarta Sangh Nepal has informed all stakeholders, including the Government of Nepal, Rastra Bank, Securities Board, and NEPSE about its serious attention towards the negative impact of the recent monetary policy of the central bank on the stock market.

The association claims that NEPSE is the only sector that has a contribution of such a significant scale to the country's revenue and is directly involved with 40 percent of the country's population with about 45 lakh beneficiary accounts.

The association has reminded everybody of having submitted a memorandum to the Finance Minister regarding the Rs. 4 crores and Rs. 12 crores margin loan limit and the CD ratio provision. The association claims of having secured evidence of the minister consoling them with the word of assurance that the limit on margin loan will be adjusted within 2 years. According to the association, the minister also remarked that the CD ratio provision can be reviewed in consultation with other stakeholders and that the point can be corrected immediately if it is found to affect the market negatively.

The stock market must be allowed to move at its own pace, Share Laganikarta Sangh Nepal states. While the trend of the capital market is determined by the universal principle of supply and demand, companies' balance sheet, future business plan, and the country's economic situation, investors in NEPSE have been the victim of short-sighted decisions by regulatory bodies in a short period of time.

In the name of protecting small investors, the association questions the justification of the steps taken by the regulatory bodies in recent days. The bar on promoters of HIDCL from participating in the bidding for less than 1 crore units, attempts to remove the provision of 10 units in primary issues, the minimum provision of 50 units through the book building method, and the exchange not trying to expand the scope of capital market to landlocked areas of the country do not seem to work in the interest of small investors.

While the stock market index in neighboring countries has reached 60,000 (sixty thousand), regulators and investors are happily raising the toast of celebration with each other. Meanwhile, the exchange and all regulatory bodies in Nepal seem upset about the NEPSE index trying to surpass the 3000 level.

The regulators of all sectors listed in NEPSE are accountable to clarify which side of the country suffers when an organization scales its business and issues right shares with the approval of the general meeting as per the rules. Nonetheless, the association agrees there is no denying that the stock market is volatile today due to the tendency of some news portals to present the news in a different style, analysts who have grown like mushrooms in the name of stock analysts, and the number of stock market advisors on social media.

The exchange and the regulator turning a blind eye to things that should actually be improved and rather being engrossed in policy corruption perfectly explains the phrase "to fiddle while Rome burns." Since the entire responsibility after a potential mishap falls on the shoulders of the government, the Government of Nepal and the Ministry of Finance should be accountable and cease all acts that discourage the general investors.

Finally, Share Laganikarta Sangh Nepal urges the concerned authorities to scrap the limit on margin loans and CD ratio provision.