KATHMANDU, MAR 02 -

Trading at Nepal Stock Exchange (NEPSE) resumed on Monday after a week as investors called off their agitation considering the government's positive response to their demands.

The capital market gained 12.72 points in the first day of trade resumption after a continuous bearish trend for more than a month. Experts believe the market could see positive growth for a few more days as the agitating investors and government officials reached an agreement to address the concerns of the investors on Monday.

The meeting of investors, officials from Ministry of Finance (MoF), Securities Board of Nepal (SEBON) and NEPSE agreed on a number of issues to address the concerns of the investors.

President of Nepal Stockbrokers Association Nandakishore Mundada said the market could witness positive growth for a few days as result of the agreement reached.

"But, it will not be sustainable until the central depository system (CDS) is introduced and trading goes online completely,"

As per the agreement, the MoF will request the central bank to permit banks to give loans against shares with 60 percent of the average value of the share put as collateral. Currently, the investors get up to 50 percent against the average market value. NRB has already allowed banks not to call margin (requirement of investors to deposit the amount equivalent to decrease in share price) as long as value comes down by 10 percent.

The banks are also free to renew such loans if the investor pays 25 percent principal and interests regularly against the previous provision of 50 percent payment. They also agreed that NEPSE would enlist the bonus and rights shares within 45 days of share certificate distribution. "It has been taking 3-4 months currently," said Tanka Paneru, chairman of NEPSE.

According to Paneru, the participants also agreed to speed up the process of introducing central depository system (CDS), mutual fund act and brining new brokers. SEBON will issue a notice informing that it will not allow 19 percent promoters' share to come into the market as public shares as per the agreement. "The big problems are related to acts, rules and regulation," said Deepak Karki, president of General Investors' Association, Nepal.

 

Posted on: 2010-03-02 12:48

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