Fourth day of Nepse closure : Central bank firm on its decision
Nepse will not open: Investors
Kathmandu, January 3:
Nepal Rastra Bank (NRB) is bringing a package — within the first week of Magh — to deal with current capital market dispute. “The central bank is categorically going through the books of financial institutions on margin lending and its repercussions on financial institutions and capital market,” a senior official at the central bank, said adding that the new package will minimise the risks of financial institutions and stabilise capital market. However, the NRB refused to revoke its decision of temporary ban on margin lending.
Today, the fourth consecutive day, also Nepse did not witness any trading because of a group of investors, who opposed the trading at the Nepse floor. Earlier, brokers and investors had agreed, in the morning, to open the floor for two hours today. “Stock exchange should not be closed,” Navaraj Pokhrel, president of Nepal Brokers Association, said adding that brokers are against the trading halt.
“NRB might have done mistake but the investors should not halt trading,” he added. But
a group of investors, fearing a huge fall in shares prices, forced the brokers not to trade from Monday.
Meanwhile, speaking at an interaction at the Reporters’ Club today, Dr Chiranjivi Nepal, chairman of Securities Board of Nepal (SEBON), the regulatory body of capital market said that globally capital market is directed by three principles: transparency, fair play and reduction of systemic risk. “But Nepali capital market lacks all these parameters,” he said challenging the investors to open the market and prove that margin lending is not fuelling the market.
Rewat Bahadur Karki, general manager of Nepal Stock Exchange (Nepse), the sole secondary market, also requested the opposing investors to trade and test the market.
Narayan Poudel, director at the regulation department of NRB, the regulatory authority
of the financial institutions, said that policies continue to change. “However, the central bank is trying to minimize the risk of financial institutions,” he said adding that the central bank can not let financial institutions risk depositors money.
On the occasion, representatives of investors said that they will not let transaction take place untill NRB revokes its decision.