Share trading outside the valley far too low

KATHMANDU, JUN 10 -

It has been more than two years since stockbrokers branched out of the Kathmandu Valley, but their transaction is still low. The situation is such that some of the brokerage firms have even started shutting shop.

Of the total trading of Rs 8.90 billion (243.93 million shares) so far this year, trading outside the valley amounted to a mere Rs 536.85 million (2.12 million shares).

In a bid to streamline the share buying/selling process, Nepse had allowed brokerage firms to operate from six places outside the Capital — Pokhara, Biratnagar, Butwal, Narayangadh, Birgunj and Nepalgunj. However, none of the brokerage firm opened branch in Nepalgunj.

Recently, JF Securities, the only brokerage firm operating from Butwal, closed its branch office, citing low business volume that is not even sufficient to meet the operating cost. Likewise, of the two brokers operating from Birgunj, Asian Securities Limited closed its branch.

Of the four cities where the share trading facility is presently available, only Pokhara is seeing satisfactory trading volume. Four brokerage firms in Pokhara have posted trading worth Rs 242.75 million so far this year — nearly half of the total transaction outside the valley.

According to stockbrokers, the major reason behind the low trading outside the valley is the lack of awareness among investors. “With Nepse remaining at its low ebb for a long time, investors who

entered the market are regretting,” said Anjan Raj Poudel, president of the Stockbrokers Association of Nepal (SBAN). “So, it is a difficult time for

stockbrokers operating outside Kathmandu.” Poudel is also the chief of Thrive Brokerage House that maintains a branch in Pokhara.

“Also, new investors are pretty reluctant to get into the capital market because of high level of uncertainty prevalent in the capital market,” Poudyal said.

“The only way to increase participation outside the valley is to boost their confidence.”

Source: The Kathmandu Post