Few stockbrokers delaying business at NEPSE

Due to the small number of brokers at the Nepal Stock Exchange (NEPSE) and the inability of the operator and regulator to monitor them, share traders are facing delays in getting their transactions processed, said market watchers.

Speaking at an interaction program entitled “Responsibility of Listed Companies in the Effective Operation of Secondary Market”, they said investors had to wait for months to get their share certificates transferred, and that it took days for them to get their money after making a sale. NEPSE organized the program.

There are only 23 stockbrokers at NEPSE, and it has not made any new appointments for the last 12 years. Last year, it initiated measures to add 27 brokers to its roster but later abandoned the move.

NEPSE chairman Bimal Wagle said that they were once again working to bring in more brokers. “In addition, we are doing research on leaving open entry of brokers under wider area network,” he said.

NEPSE general manager Rewat Bahadur Karki pointed to the lengthy official process involved in transferring shares, which can take as long as three months. “We must set up a central depository system that will cut the time to three to five days,” he said.

He said they were working to bring down the listing time to 15 days from the current one month.

Dr Chiranjiwi Nepal, chairman of the Securities Board of Nepal (SEBON), said the most serious problem in the stock market was insider trading under which people having access to key information about the listed companies engage in buying and selling shares. “Eliminating this practice depends on the company secretary,” he said. Krishna Bahadur Manandhar, acting governor of Nepal Rastra Bank, said that unless manufacturing and trading companies enter the stock market in a big way, it cannot develop, mature and become vibrant.

National Planning Commission member Posh Raj Pandey said the rise in stock prices has not been backed by economic growth. “We have to develop the stock market as a platform to provide stable long-term returns to middle-income people,” he said.
Source: eKantipur