Four organisations urge for advancing IPO approval process

KATHMANDU, APRIL 5:  Four various organizations pertaining to the stock exchange investment have jointly requested the advancement of the public offering approval process. Nepal Shareholders Association, Nepal Securities Investors Association, General Investors Association, and Ordinary Investors Association—issued a joint statement recently making this request.

Expressing dissatisfaction that the process for Initial Public Offerings (IPOs) has not progressed for a long time due to the lack of leadership at the Securities Board, these organizations have demanded that it be streamlined. They have also urged to discourage the issuance of shares through premium and book-building processes for companies that are not eligible.

According to them, the issuance of company shares should be permitted only after a detailed study of the company's net worth, dividend capacity, business plan, and growth.

The organizations have highlighted the potential for the capital market to expand significantly in the future as its size continues to grow. They also noted in the statement that making the capital market more transparent and fully professional could contribute significantly to the economy.

Since the chairperson position at the board has been vacant since January 5, there has been uncertainty among investors. In this connection, the organizations have urged the Nepal Government to appoint a qualified, honest individual with national and international capital market knowledge and an understanding of the International Organization of Securities Commissions (IOSCO) principles for the post.

While welcoming the monetary policy as a whole, they have expressed disappointment that some valid demands raised by investors, such as reducing the risk weight for securities borrowing, removing the limit of NPR 15 million for margin-type loans floated to single customers, and doing away with the cap on dividend distribution by microfinance companies, have not been addressed.

Such demands are reducing the risk weight for securities borrowing, annulling the NPR 15 million limit for individual customer margin securities, and removing the cap on dividend distribution by microfinance companies, among others,