Govt amends securities regulation

Kathmandu, November 29

The dominating presence of the financial sector in the domestic stock market is expected to be diversified due to the recent policy departure by the government, that is, the amendment of the Securities Registration and Issue Regulation, which offers free pricing for initial public offerings (IPOs).

According to Rewat Bahadur Karki, chairman of Securities Board of Nepal (SEBON) — the securities market regulator — henceforth, companies will be allowed to fix the price of their IPOs rather than the mandatory Rs 100 per share before the amendment of the regulation.

Though free pricing of IPO is for all types of companies that meet the criteria set by SEBON to issue shares to the public, the real sector companies are especially expected to be attracted to go public because the threshold of shares that need to be issued to the public to become a public limited company has been reduced to 10 per cent from 30 per cent.

“Presently, the real sector companies can float 10 per cent shares to the public to be listed as public limited companies,” said Karki. “There is negligible presence of real sector companies in the country’s stock market, which needs to be diversified through maximum participation of the real sector companies. Only then will the stock market be able to reflect the real picture of the economy.”

According to Karki, these amended provisions are a milestone for the participation of real sector companies in the domestic stock market. “The government should also provide some attractive packages to the real sector companies through the fiscal and monetary policy.”

The current fiscal policy for the year 2016-17 has offered 15 per cent income tax exemption for real sector companies that float shares to the public.

Karki further laid emphasis on the need for Nepal Rastra Bank to also offer low interest refinancing facility for real sector firms listed in the stock market to encourage them to become public limited company listed in the stock market.

Nepse gains 2.88pc

KATHMANDU: The country’s only share market saw Nepal Stock Exchange (Nepse) index go on a roller-coaster ride on Tuesday.

Opening at Monday’s close of 1,510.16 points, the benchmark index had plunged to as low as 1,468.74 points within the first half hour. While Nepse had recouped the loss to surge to 1,524.30 points around noon, Nepse dipped back below the 1,500-point threshold over the next half hour. From thereon, the local bourse rebounded steadily to close at 1,553.68 points, a gain of 43.52 points or 2.88 per cent over the day.

Similar to Monday, apart from manufacturing, all the subgroups witnessed gains. Altogether, 1.41 million shares of 131 companies that amounted to Rs 1.19 billion changed hands through 7,648 transactions during the day.