Share market in process of full automation

Kathmandu, Apr 29

The Securities Board of Nepal (SEBON) has initiated the work to make the share transaction fully automated.

Currently, the Nepal Stock Exchange (NEPSE) – the only share market platform in the country – has implemented partial automation in share transaction.

"The board has started to make the market fully automated. We hope that the new system will come into operation after a couple of months after the lifting of the lockdown," said SEBON Chair Bhisma Raj Dhungana in a video conference organised by Nepal Financial Journalist Association on Tuesday.

He said that the capital market regulator and NEPSE had allocated dedicated teams to develop and implement the new and advanced system.

He said that the market would not resume soon since about 400 individuals needed to be present in various agencies and brokers. "It will disturb the lockdown which is necessary to save the lives in the time of crisis. However, we will try to find a way out once the lockdown is relaxed," he said.

According to Dhungana, the board has directed NEPSE to develop a modality to run the share market for a brief period every day.

Chief Executive Officer of NEPSE Chandra Singh Saud said that the stock market was likely to open for a couple of hours every day from May 7.

"I think we should open the stock market for a brief period each day. But we are yet to decide about the modality to open the market. Preparations are underway," he said.

We need business continuity plan, disaster recovery plan and information technology policy to resume market operation so we have recently approved the IT Policy and send it to the SEBON, said Saud.

He lamented that investors were not attracted to the online share transaction system although the currently implemented system was capable of addressing the need of the market.

Before the lockdown, about 45 per cent of the share transactions used to happen from the online system.

Share investor Ambika Prasad Poudel suggested that the market should be open at least partially to keep it alive.

"Since the period of lockdown is unknown, the market should be opened partially. It should be opened limiting the time and ceiling for circuit breaker," he said.

It would be 45 days of the market closure by May 7.

According to him, the prolonged market closure would send negative message to the investors as well as the foreign and non-residential Nepali investors.

He urged the regulator to open the market by allocating hours for the brokerage firms.

Published in The Rising Nepal daily on 30 April 2020.