FM tells SEBON to prepare to reopen market

Kathmandu, Jun 7

Finance Minister Dr Yuba Raj Khatiwada has directed the Securities Board of Nepal (SEBON) to make preparations to operate the capital market at the earliest.  

The closure of the market has affected the investors who were involved only in the business of trading shares, he said while addressing the 28^th Anniversary of the SEBON in a webinar on Sunday.

He said that the SEBON should not stay idle just shutting the market, not even during the lockdown, adding preparations should be made to move ahead fighting the crisis.

"During the lockdown, the SEBON should work to improve the system and create better environment when the market opens when the restrictions are over," he said.

Dr Khatiwada suggested starting commodities trading soon and said that credit ratings of companies should be made more competitive and effective in the days to come.

According to him, mutual fund is a good scheme and should be promoted as it is useful for those who are less educated about the technicalities of share market, cannot allocate regular time for securities transactions and are ready for long-term investment.

Likewise, he emphasised on technological cooperation among the Asian countries, especially in the SAARC region, to develop the market not only during the coronavirus but for the future as well.

The Finance Minister directed SEBON to develop the capital market as par the SAARC standards as the sector would grow rapidly in the aftermath of the COVID-19 pandemic.

Governor of the Nepal Rastra Bank, Maha Prasad Adhikari, said that it was necessary to maintain the confidence of the investors during the hard times like the current one.

Chair of the Insurance Board, Chiranjibi Chapagain, said that insurance companies should be allowed to make investments in companies and instruments other than public limited institutions.

He also said that there should be frequent dialogue and cooperation among the NRB, IB and SEBON to develop the three sectors which were closely connected.

Chairman of the SEBON, Bhishma Raj Dhungana, said that the capital market regulator was conscious that the business should be resumed as early as possible by applying the health and safety measures against the pandemic.

He said that about 1.66 million Demat accounts of investors were created so far covering 5.4 per cent of total population. The share market witnessed Rs 440 million worth of transactions daily on average last year.

Chairman of Stock Broker Association of Nepal, Bharat Ranabhat, said that the closure of share market due to coronavirus had created question in regard to the credibility of the market.

"All stakeholders should strive for cooperation and collaboration not to invite the same fate in the secondary market. The market should be opened at the earliest," he said.

Published in The Rising Nepal daily on 8 June 2020.