Problems in Nepse's online system upset traders
Kathmandu, November 14
Technical problems encountered by the stock market's newly-installed online trading system have significantly reduced the trading volume, eroding the confidence of stock investors.
The online trading system of Nepal Stock Exchange (Nepse) has been constantly facing problems since it was it was introduced on November 7. As a result, daily trading volume fell to as low as Rs 30 million last week, as against a minimum of around Rs 200 million in the past.
Nepse had earlier boasted that stock transactions would be completed in 50 microseconds once its system was fully automated. “But we now have to wait for more than three minutes to complete each transaction,” said Uttam Aryal, chairman of Investors Association of Nepal.
If this continues, stock investors say, trading volume will remain low, hitting the benchmark index, which has been on a freefall for the last several months.
“So far, the Securities Board of Nepal, the securities market regulator, and Nepse have not conducted any study on problems faced by investors,” said Aryal. “More investment will not flow into the secondary market if they fail to address this problem.”
Nepse, on the other hand, has said problems are cropping up because stockbrokers are not familiar with the new system. “We agree that there are problems in the system. But we are resolving them as well,” said Nepse Spokesperson Murahari Parajuli. “But stockbrokers are blowing the problems out of proportion.”
But the problems in Nepse are not restricted to online share transaction, according to traders. They complain that Nepse's website is also not working properly since the trading was automated. “As a result, there are errors in trading floor sheets, and inaccurate data are being displayed,” said Aryal. “Because of this we are not getting proper updates about the stock market.”