Finance Minister emphasizes participation of real sector in stock market

Kathmandu January 14- Finance Minister Bishnu Prasad Paudel has laid emphasis on the participation of real sector for the healthy growth of stock market in the country.

Addressing 23rd annual general meeting of Nepal Stock Exchange (NEPSE) yesterday, finance minister said that the domination of financial sector in the secondary market cannot give clear picture of the county’s economy, as stock markets are considered to be mirrors of the economy.

“Financial sector institutions comprise 80 per cent of total listed firms in NEPSE. In this scenario, there is an urgent need to increase participation of real sector companies for diversification of the stock market,” he said. “Stock market should be capable of financing some mega projects in the country.”

Minister Paudel also said that the government was making preparations to pave way for non-resident Nepalis to invest in the stock market.

Speaking at the ceremony, Chairman of Securities Board of Nepal Rewat Bahadur Karki said that full-fledged implementation of dematerialised form of securities trading will help to develop the stock market.

Karki opined that the unstable policies of the governments had affected the growth of the stock market. “Though its operation started more than two decades ago, NEPSE still lags far behind among South Asian nations in terms of modernisation of the secondary market. The automated trading system should be introduced as soon as possible to modernise the market,” he stated.

NEPSE — the country’s only trading bourse — has announced that it is gearing up to expand share trading services from other major cities beyond Kathmandu Valley.

NEPSE’s General Manager Sitaram Thapaliya informed that the local bourse is in position to provide 250 additional log-in windows to the brokers to expand their services. Currently, NEPSE has provided only two log-in windows to each of the 50 brokerage firms.

While NEPSE has been providing trading services from major cities like Biratnagar, Dharan, Pokhara, Narayanghat and Dhangadi, it plans to expand its services to other cities as well. However, total trading turnover and number of transactions outside Kathmandu is nominal.

The full-fledged implementation of dematerialised form of trading is expected to boost the turnover outside the Valley also, as the new system will end the compulsion to send physical certificates to Kathmandu for ownership transfer and other processes, like signature verification of the share owner.

CDS and Clearing Ltd has already said that many Depository Participants, which are banks, can also provide services from their branches in the districts. The full-fledged dematerialised trading is planned to come into effect from January 17.