Lalitpur, June 8
Minister for Finance Dr. Yuba Raj Khatiwada has asked the Security Board
of Nepal (SEBON) to get out of the shadow of the Nepal Rastra Bank (NRB).
He said that the
capital market was largely influenced by the policies taken by the
banking-sector regulator, NRB.
"What we have seen
so far is that the stock market is immediately affected by the monetary policy
of the central bank. When there is enough liquidity in the banking system,
share market goes up while it goes down if there is not sufficient money in the
banks," Dr. Khatiwada said at the 27th Anniversary Programme of
the SEBON.
According to him, the
increment in the interest rate has always negative impact on the securities
market. He suggested the SEBON to develop instruments and policies to make the
share market more vibrant and immune to the monetary policies.
He said that the
development of the securities market was the best alternative for the capital
market development and attracting private sector investment.
"While aspiring
for 8.5 per cent growth of the national economy, we expect about two-thirds of
it from the private sector. We need about a trillion investment in a year but
the banking system has Rs. 500 billion at maximum. So we need a strong and
vibrant stock market," said the Minister.
He also said that there
was a huge demand of loans in the long-term large investment which makes the
loan mobilisation with the money collected through call deposit.
Saying that there were
some malpractices in the country's bond market, he directed the SEBON to create
balance in the bond market and stork market.
Dr. Khatiwada also
suggested the board to develop strategy to increase the number of women
investors in the stock market.
"The government
announced discounts on the registration of real estate which resulted in the
increment of women owning house and land. We have given 25 per cent discount in
real estate registration but the women ownership has increased to 28 per cent
from erstwhile 8 per cent. The same strategy might also work in the share
market," he said.
He presented concession
in the capital gain tax and reservations in the Initial Public Offering (IPO)
as the options to attract more women in the capital market.
Chairman of the SEBON
Dr. Rewat Bahadur Karki said that the steps taken by the board had long-term
implications.
"We have
successfully expanded the share market across the country and the access of
people to the securities market has increased significantly. This is an
achievement," he said. He also stated that the provision to provide at
least 10 units of shares to every applicants of the IPO has expanded the
securities market and made it more inclusive as well.
According to him, investor-friendly
steps to modernise the bond market, reducing the capital gain tax and
formulating the Trust Act as announced in the budget of the next fiscal year
2019/20 will make the market more dynamic and boost the confidence of
investors.
Former Governor of the
NRB and Vice-Chairman of the National Planning Commission Deependra Bahadur
Kshetry pointed towards the need to make the capital market regulator more
independent.
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