Kathmandu, December 11:

Stock market transactions in the fiscal year 2005-06 have declined to Rs 3.451 billion from Rs 4.508 billion in the previous fiscal, even as the capital mobilization (public issuance of shares) increased to Rs 2.443 billion from the earlier Rs 1.627 billion during the same period.

While talking to journalists today, Deepak Raj Kafle, chairperson of Securities Board Nepal (SEBO/N), a regulatory body for the stock market, said that market capitalisation in the stock market has increased by over 50 per cent despite fall in stock market transactions.

Kafle said that market capitalisation of listed companies in fiscal year 2005-06 has reached to Rs 96.81 billion which is a rise by over 57 per cent compared to the previous year.

This year alone 10 companies were listed at the NEPSE market for trading and the total number of listed companies so far have reached 135, according to SEBO/N.

According to Kafle, with a view to strengthen the market monitoring system and to boost stock market transactions, a new stock exchange act has already been enforced. Under that law, the securities board will expedite monitoring of the stock market.

Recently, SEBO has also implemented rules and regulations to trade development bonds from the secondary market, said Kafle. He hoped that after the development bonds are traded in the stock market, the market would get a boost.

With a view to trade development bonds from the secondary market, SEBO has given permission to five stockbrokers and two market makers, said Kafle.

He hoped that the introduction of development bonds in the secondary market would contribute to better management of liquidity in the market.

He also informed that automation of the stock market for share trading has already been started, replacing the existing open-outcry system.

He also categorically said that manipulations exist there due to lack of competition in the stock market. He said that the Nepali stock market is yet to see the introduction of a Central Depository System (CDS) and credit rating system, which are essential market instruments to modernise the market.

Creating a quality stock market in Nepal is still a big challenge for which we need to introduce modern instruments and improve infrastructure, Kafle opined.

In the fiscal year 2005-06, NEPSE index has increased by 100 points reaching to 386.83 from an earlier 286.67 points.