KATHMANDU, MARCH 29
Chairman of Securities Board of Nepal (SEBON), Ramesh Kumar Hamal has emphasised on the need for accountability, good governance, transparency, and fair competition among service providers to develop the capital market at an accelerated pace.
Speaking at a programme organised by the Nepal Investors Forum, Share Laganikarta Sangh, and Nepal Punji Bazaar Laganikarta Sangh here today, Hamal shared that although SEBON is committed to introducing merit-based policies and guidelines to secure the market's growth as well as the investment of the Nepali people, lack of conducive environment in the country has delayed the process.
"To materialise our commitments and visions, accountability, good governance, transparency, fair competition, and open door system are the crucial pillars for bringing reforms in the sector. Although we have taken various initiatives and introduced guidelines for a new stock exchange, commodity market, private equity, venture capital market, and increase the number of stockbrokers, the Supreme Court is yet to give a decision on their implementation. We have discussed the delay with concerned stakeholders and are confident that the court will make its decision on the cases very soon," he said.
Hamal also stressed the need to make a collective effort for cumulative results. Stating that the country has not been able to attract foreign investment as compared to other countries with far fewer populations, he pointed at the lack of a conducive environment and inconsistency in the enforcement of rules for affecting the market's growth.
"With the global economy adversely affected at present, the financial instability and liquidity crunch has lowered the implementation of capital expenditure, further affecting the market. We exist because the market does and we will leave no stone unturned to introduce and revise existing rules and guidelines to motivate the investors and accelerate the pace of the sector's growth," he said.
Hamal also shared that SEBON is working towards digitising its services and introducing book building process along with a short selling and day trading system, adding that the board is also focused on installing automatic surveillance technology for effective monitoring of any irregularities during live trading, reducing capital gains tax, and commission on transactions. "We are also coordinating with concerned bodies to reduce the interest rate to a single digit. If we panic today, we cannot make wise decisions so I urge patience from everyone for better days ahead," Hamal shared.
On the occasion, Tara Prasad Phullel, president of Share Laganikarta Sangh, praised the efforts made by SEBON under the chairmanship of Hamal and added that more is expected from him for development of the share market. "While it is the responsibility of SEBON, Ministry of Finance (MoF), and Nepal Rastra Bank (NRB) to safeguard the investment of the Nepali citizens, the stringent policies introduced by the central bank, among other factors, are affecting the market's growth.
Whenever the market witnesses a steady growth, the government issues directives that demotivate the investors and affect the market movement.
Also, there has been no progress on the initiative to include realty sector into the market, which was announced years ago," he mentioned. Phullel also urged SEBON to make necessary efforts to assist small and large investors and to address the issues seen at the earliest.
Furthermore, Chhote Lal Rauniyar, immediate past president of Nepal Investors Forum (NIF), suggested Hamal bring the initiatives that are stuck at the judiciary into implementation at the earliest, which will be seen as a landmark decision for the country's share market, adding that doing so will also increase healthy competition in the sector.
"The capital market has evolved drastically compared to previous years. So far, 5.5 million people have opened a demat account, 4.57 million are registered in MeroShare, 2.7 million have participated in initial public offerings (IPOs) and 1.4 million are registered in the online trading system. The government collects an annual tax of Rs 15.20 billion and almost 18 per cent of the population have engaged with the market so far," he informed.
Rauniyar suggested lowering the commission rate, introducing an auction market, intra-day trading and short selling systems, increasing participation of non-residential Nepalis in the market, decreasing interest rates, and capital gains tax, among others, to accelerate the sector's growth, and securing the investment of the citizens who hope to do something in their own country.
A version of this article appears in the print on March 30, 2023, of The Himalayan Times.
