Securities Board of Nepal (Sebon) will be celebrating its silver jubilee by holding a two-day Capital Market Expo slated to open Wednesday. The exhibition will have 160 stalls of various organisations related to the capital market offering information on services and financial instruments.
Sebon, the regulator of the country’s stock market, claimed that the expo would be the first of its kind in the country. Chairman Rewat Bahadur Karki said the expo was aimed at educating the public about the various aspects of the capital market.
The Nepal Stock Exchange, CDS and Clearing, brokering companies, merchant bankers, mutual funds, credit rating companies, agencies offering demat accounts and C-ASBA service, listed companies, Insurance Board, Nepal Rastra Bank and Institute of Chartered Accountants of Nepal will be setting up stalls at the expo, according to Sebon.
Karki said four technical sessions would be held during the event. “The subjects the sessions will deal with are infrastructure related to the capital market, issues related to merchant bankers, brokering companies and prospects of development and challenges of the capital market,” he added. Sebon expects footfall of over 100,000 during the two days of the exhibition.
Sebon has been organising various programmes frequently to increase awareness about the capital market, educate investors and promote transparency for sustainable development of the capital market in the country. “Awareness about the capital market has been growing, however, a lot remains to be done to ensure that people benefit by utilising market instruments to the maximum,” Karki said.
Poor infrastructure and market players who only think about the short term are responsible for the slow development of the capital market in the country. Nepal’s secondary market is dominated by banks and financial institutions. Among the 210 companies listed on the Nepal Stock Exchange, there are very few from the real sector companies.
Two years ago, Sebon revised the stocks registration and issuance regulations in a bid to allow a greater number of real sector companies to go public. As per the new rules, companies are required to offer only 10 percent of their shares to the general public, down from 30 percent. Moreover, the government has also been providing companies wishing to go public a 15 percent income tax rebate. However, very few real sector companies have gone public.
In addition, the secondary market is often reported to be manipulated by a few market players.
Due to the existing large number of short-term investors, panic buying and selling is common, resulting in high volatility in the secondary market.
Source: The Kathmandu Post