Nepse to install digital signage and looking for better upgrade to the current softwares

KATHMANDU: 

Nepal Stock Exchange (Nepse) will soon install digital signage that provides real-time trading information at various locations across the capital to lure more Nepalis towards the stock market and also to provide live stock prices to investors in various public areas.

“Nepse will place visual display boards at strategic locations in the valley so that public are aware of stock price movements,” informed managing director of Nepse Sitaram Thapaliya during a programme held to mark the stock exchange’s 20th anniversary.

In addition, the live trading data will also be displayed through

Nepse sets sights at workstation expansion

KATHMANDU, DEC 18 - 2013

The Nepal Stock Exchange (Nepse) has planned to open its workstations in all major cities of the country by the end of this fiscal year with an aim to facilitate the stocks trading from outside the Valley. Nepse has recently opened its new workstation in Dharan, taking the number of such facilities to eight.The secondary market has been facilitating such trading in coordination with the stockbrokers.

 Nepse General Manager Sitaram Thapaliya said they had initiated for expanding the number in view of the growing attraction of the people outside the valley for stock transactions. “Compared to the past, there is

Nepse index crosses 570-point mark

KATHMANDU, OCT 18, 2013

After four years, the Nepal Stock Exchange index today crossed 570-point mark, as investors remained optimistic about the country’s political and business climate.

The stock market index gained more than 4.81 points to end at 571.8 points on the first trading day after Dashain holidays.

The hopes regarding political stability following the November CA elections and prospects of attractive dividends have been fuelling investors’ confidence for the last couple of weeks.

Nepse index had reached this level in November 11, 2009. After that the benchmark index started moving below 500-point mark till April 2012.

However, the index reached the height of 555.73 points on February 17 after talks on formation of a new government yielded positive results. But the benchmark index fell the very next day.

Then in May the benchmark index slumped to below 500-point mark as investors went on a selling spree after capital market regulator allowed promoters of financial institutions to convert promoters’ shares through stock market. It took more than 15 days for investors to get assured that market will not be flooded with promoters’ shares.

But in August and in mid-September, the benchmark index crossed 550-point mark, but it could not stay there for more than two days.

Today, hydropower subgroup was the biggest gainer with Chilime Hydropower, Butwal Power Company and Arun Valley Hydropower earning Rs 10, Rs six and Rs five per unit share, respectively.

Nepal Telecom’s share price went up by Rs six per unit which pushed the subgroup index up by seven points. Banking and insurance subgroups also registered gains in today’s trading.

Union Finance Company was the biggest earner of the day as its share price appreciated by eight per cent to Rs 108 per unit, while Diprox Development Bank was the biggest loser as its share price fell by six per cent to Rs 599.

Nabil Bank registered the highest turnover in today’s trading as its shares worth Rs 6.8 million were traded.

Jhimruk Bikas Bank’s shares debuted at Rs 105 today in the stock exchange.

Today, 88,363 unit shares of 62 companies worth Rs 40.17 million were traded in 590 transactions.

The market capitalisation of the stock exchange increased to Rs 575.4 billion today.

Source: THT

Civil Bank to float primary shares on Dec 10

KATHMANDU, NOV 26 - 2012

Civil Bank said that it will float primary shares to the public on December 10.

“The bank, which is on the verge of issuing shares to the general public, has been organising interaction programmes at various places across the country,” said chief executive Kishore Maharjan. The 30th commercial bank of the country will issue eight million units of shares worth Rs 800 million.

Currently, 26 commercial banks have listed over 510.77 million units of shares at Nepal Stock Exchange (Nepse), with a total paid up value of over Rs 51.07 billion. Civil Bank will be the 27th commercial bank to list its shares at Nepse that is dominated by banks and financial institutions due to the dismal performance of manufacturing companies.

There are still five commercial banks that need to float primary shares to the public according to the central bank regulation.

The secondary market is currently showing favourable signs for investment and Civil Bank’s issue is also expected to provide a good opportunity to small and medium investors, said Maharjan, adding that the capital market is expected to garner attention from the general public towards primary shares after the issuance of shares of Civil Bank that posted an operating profit of Rs 35.6 million in the first quarter of the current fiscal year.

The bank was able to mobilise deposits worth Rs 10.3 billion and disburse loans and advances worth Rs 9.24 billion during the period.

The bank — that is issuing the second largest public offering after Agriculture Development Bank — has appointed Citizens Investment Trust, NCM Capital Markets, ACE Capital Markets and Nabil Investment as issue managers for its Initial Public Offering (IPO).

Civil Bank — that has successfully completed its second year of operation — has a total of 15 branches spread across prime locations of the country.

The interaction programme in Pokhara today saw the participation of respected personalities from the industrial and commercial sectors of the country including enthusiasts of the share market. It will organise another interaction in Birgunj tomorrow.

Source: THT

Nepse records second double-digit gain after Dashain festival

KATHMANDU, NOV 08 - 2012

Driven by strong demand, Nepal Stock Exchange (Nepse) posted double-digit growth on Wednesday as the market index surged by 11.79 points with the entire sub-indices except hotels registering growth.

 

This is the second time after Dashain that the benchmark index has seen double-digit gain. After the festive holiday, the capital market has witnessed a larger volume of share transactions along with the surge in Nepse index.

Stock analysts say currently the demand side has been heavier in the stock exchange, leading to continuous rise of stock price. “Investors have shown a great faith on the stocks of commercial banks,” said Anjan Raj Poudyal, president of Stock Brokers’ Association of Nepal. “They are expecting price will rise further and believe that they will have to pay higher price in the future.”

Currently, both the short-term speculators and long-term investors are attracted towards investing in the capital market, according to Poudyal. “They still have faith that there will be political consensus and budget will come soon,” he said.

The group representing commercial banks saw a sharp rise in its index by registering a growth of 18.97 points to settle at 427.17 points. Apart from the commercial banks, the hydropower companies surged by 15.9 points to close at 1,029.32 points. Similarly, the group representing development banks, finance companies, insurance and others registered growth of 1.68, 1.9, 3.37 and 1.18 points respectively. The index of manufacturing companies and trading firms, however, remained intact.

Commercial banks’ index surged following the rise in share price of Nabil Bank, Everest Bank and Standard Chartered Bank, among others.

Likewise, stock price of Chilime Hydropower Company and Arun Valley Hydropower Development Company increased by Rs 19 and Rs 4, contributing to the growth of index representing the hydropower companies. Along with the growth of market index, the exchange also witnessed a very high volume of share transaction  on Wednesday, with a total turnover worth Rs 117.89 million. Likewise, 384,191 shares changed hands through 1,606 transactions on the day that saw Rs 449.88 billion in the market capitalisation.

Source: The Kathmandu Post

CDS & Clearing Ltd to conduct clearing and settlement of securities

KATHMANDU, Sept 12, 2012

Central Depository System (CDS) and Clearing Limited is all set to start work related to clearing and settlement of securities, which includes ownership transfer of securities like, stocks and bonds, and payment settlement.

The task, which is currently being conducted by Nepal Stock Exchange (Nepse), may become the responsibility of CDS and Clearing Limited as early as September 17, if things go according to plan, Subodh Sharma Sigdel, CEO of the state-owned company, said.

The transfer of responsibility, however, should not mean works related to clearing and settlement of securities are being automated.

“Automation of the entire system from trading to clearing and settlement of securities is our ultimate goal. But for now only the location where these jobs were being performed will be changed. Works related to clearing and settlement will continue to be performed manually as in the past,” Sigdel said.

Works related to clearing and settlement include ownership transfer of securities, process of informing the company whose securities are being traded and payment settlement between parties that are purchasing and selling the securities.

These tasks, which have to be performed within next three days of security transaction, are currently being performed manually by Nepse.

“To automate the entire process, Security Clearing and Settlement Regulation first needs to be promulgated,” Sigdel said. “We then need to identify a way to slap capital gains tax (CGT) on security transaction once the system is automated.”

On enactment of Security Clearing and Settlement Regulation, the Securities Board of Nepal (Sebon), the secondary market regulator, has expressed commitment to expedite the process, Sigdel informed. “So we can expect the bylaw to be introduced anytime soon,” he said. “But the task of automating the process of CGT collection is taking quite some time.”

CDS and Clearing Limited had previously outsourced the work of automating its system to an Indian company. The software provided by the firm, however, does not automatically deduct the tax amount on securities sold on profit.

Following this, the idea of replacing CGT on security trading with transaction tax was also floated. But the government is not keen on introducing transaction tax fearing it might dampen investor sentiment as such taxes have to be slapped even if securities are sold on losses.

“Since calculation of CGT immediately after change of hand of securities is almost impossible - as it requires capturing second-to-second price fluctuations on the share market - we are currently mulling over either slapping CGT on closing price of securities or collecting CGT voluntarily from brokers at the end of the fiscal year,” Sigdel said.

Nepal seeks membership of ACG

Central Depository System (CDS) and Clearing Limited is seeking membership of Asia Pacific Central Securities Depository Group (ACG), an umbrella body of securities depositories and clearing organizations operating in the Asia Pacific region.

The membership of the 30-member group will be confirmed on September 21 during a meeting scheduled to be held in Indonesia, according to Subodh Sharma Sigdel, CEO of CDS and Clearing Limited.

“The confirmation will provide us a platform where we could share information with securities depositories and clearing companies of relatively developed markets and help us get international recognition as well,” Sigdel said.

Source: Republica

Nepse lists 3.17m bonus, ordinary shares

KATHMANDU, June 3, 2012

Nepal Stock Exchange (Nepse) has listed 3.17 million units of bonus and ordinary shares of six different companies for trading last week. This includes one million units of ordinary shares of First Micro-finance Development Bank and 112,084 units of bonus shares of NIDC Capital Market, 96,447 units of bonus shares of Alliance Insurance Company, 1.01 million units of Global Bank, 474, 090 units of bonus shares Ace Development Bank and 474, 460 units of bonus shares of Shiddhartha Bank.

The Securities Board of Nepal (Sebon) has also approved 37.49 million units of bonus shares issue worth Rs 3.48 billion belonging to 43 different companies during the last 10 months of the current fiscal year.

Sebon -- the security market regulator -- has approved right shares issue worth Rs 260.85 million belonging to four different companies in April-end.
Unique Finance and Patan Finance companies got permission to issue right shares worth Rs 100 million and Rs 33 million respectively. Triveni Bikash Bank and Kankai Bikash Bank also got permission to issue right shares worth Rs 67.8 million and Rs 60 million respectively.

Similarly, Sebon has given its nod for shares and debentures issues worth Rs 1.98 billion by 14 different companies until mid-May under the Initial Public Offering (IPO). Bagmati Development Bank, Manjushree Financial Institution, First Micro Finance Development Bank, Nepal Consumer Development Bank, Summit Micro Finance Development Bank, Janata Bank Nepal, Metro Development Bank, Kanchan Development Bank, Gulmi Bikash Bank, Tourism Development Bank, Pacific Development Bank and Lotus Investment Finance have been granted permission to issue ordinary shares amounting to Rs 1.58 billion.

Siddhartha Bank and Nepal SBI Bank got approval from Sebon to issue debentures worth Rs 400 million each.

Meanwhile, Nepse reported a total of 5,321 transactions involving 6,87,325 units of shares worth Rs 240 million last week. Nepse saw a whopping drop (33.54 percent) in transactions amount this week compared to the previous week. Nepse index, which indicates investor confidence, lost 39.32 points over the week amid persisting political uncertainty in the country.

Source: Republica

Minority investors seek strong regulations

KATHMANDU, MAY 31, 2012

The capital market regulator has been unable to safeguard the investment of minority investors due to the absence of a provision penalising public companies that sucker in billions from investors then disappear.

Nepal Stock Exchange (Nepse) has de-listed 43 companies so far for their failure to comply with the regulations. These companies are supposed to have raised funds worth about Rs two billion from the public. Companies such as Bansbari Leather Factory and Necon Air were de-listed from Nepse.

At one point in time, the shares of these companies were even considered as blue chip stocks. In theory, their stocks can be traded as Over-The-Counter (OTC) stocks but in practice, none of their shares has seen any trading yet at Nepse’s OTC market as these companies have ceased to exist.

In order to safeguard the investment of minority stakeholders, investors in a series of meetings have requested the Finance Ministry to take action against the directors of such companies so that investors can recover some of the invested capital. “In Nepal, when companies get de-listed, shareholders who have purchased shares during the heydays of the companies are left with almost nothing which is not fair,” said general secretary of Nepal Stock Investors Association Prakash Rajaure.

“The Finance Ministry will look into whether the current regulations allow penalising the directors for running the companies into bankruptcy,” said joint secretary at finance ministry Baikuntha Aryal. If the regulations lack such provision, then regulation has to be introduced, he added.

Nepse had de-listed five companies in July 2008. Then Nepal Byapar Bikash Company (Koshi), National Pro and Eco Dev Centre, Himgiri Textile and Industries, Biratnagar Jute Mills, and Morang Sugar Mills were de-listed by the stock exchange.

In foreign countries, any company in the process of getting de-listed is obliged to pay back the amount the company owes to minority shareholders. “The prerogative for listing and de-listing companies lies with the stock exchange, and listing regulation does not have any strong provision for penalising the people responsible for a company’s demise,” pointed out director of Securities Board of Nepal (Nepal) Niraj Giri.

In the amended Securities Act-2067, Sebon has mentioned that the listing of a company whose promoter was involved as a promoter in a public limited company that has gone bankrupt and liquidated in not permitted to get listed. “Monetary fine can also be slapped on directors only if they are proven to be involved in financial irregularities and prohibited to be the director of another company for the next 10 years,” pointed out Giri.

There are about two dozen companies at Nepse that are waiting to get de-listed. Hotel Yak and Yeti and about 14 companies belonging to the manufacturing subgroup, and two of the trading subgroup, who are waiting for the de-listing, have stopped paying the listing fee, and are not holding their AGMs.

Source: THT

Nepse to add trading hour, change circuit breaker rules

KATHMANDU, MAY 21, 2012

The Nepal Stock Exchange (Nepse) is preparing to increase trading hours and change circuit breaker rules following complaints from investors.

Investors have been complaining about the less trading hours and ‘unscientific’ circuit breaker system.

According to sources, the capital market will increase trading hours by an hour—from 11 AM to 3 PM—for some time, and extend further to 4 PM. The present trading hours are 12:00 pm to 3:00 pm from Sunday to Thursday.

As far as the circuit breaker rules are concerned, the restrictive measure will be applied only when the index moves 5 percent—either way. Currently, the exchange suspends transaction for 15 minutes if the index goes up/down by 3 percent. In the event of a 4 percent movement, the trading is suspended for 30 minutes. Share transactions are halted for the day the index fluctuates by 5 percent.

Nepse started the circuit breaker system in September 21, 2007. Until August 25, 2008, the market stabilising tool used to be applied on the basis the rise/fall in index points. Since the date, it is applied on the basis of percentage rise/fall.  The proposal, however, has to be approved by the Nepse’s board.

Nepse Chairman Jib Nath Dhital also hinted about such a plan, saying that Nepse will address the issues by preparing a fixed set of regulations. “Informal talks on the matter have taken place,” said Dhital. “It is high time that we take a decision.”

Analyst Rabindra Bhattarai welcomed the move, but said changing circuit breaker rules alone cannot ensure smooth trading. “The values of promoter and public shares are considered similar while calculating market capitalisation, which creates anomalies,” he said. “As a result of the valuation of all stocks under the same head, small changes in the share prices of companies like Nepal Telecom, Standard Chartered Bank and Nabil Bank, among others, affect the market index largely.”

Source: The Kathmandu Post

Halt in share trading of merging BFIs irks investors

KATHMANDU, FEB 16 - 2012

Investors have expressed concern over the ban by the Nepal Stock Exchange (Nepse) on the trading of shares of banks and financial institutions (BFIs) in the process of merging.

Financiers became anxious after Nepse halted trading in the shares of two dozen BFIs as the domestic financial market moves towards consolidation.

The provision of stopping share trading was introduced about four years ago when the market was on a bullish run. Officials of the Securities Board of Nepal (Sebon) said that they were aware of the situation and were discussing ways to address the issue.

“There are both pros and cons of this provision of halting transactions. We have realized that investors are affected when share trading is stopped,” said Niraj Giri, Sebon director. “But if trading is not stopped, there is a high possibility of market manipulation.”

Currently, almost all the BFIs have been authorized by their shareholders through their annual general meetings to find suitable partners and go for a merger if possible. And when they sign a memorandum of understanding (MoU) with a potential merger partner, trading in their shares are halted. This discourages investors from buying shares of potential merger partners as they cannot trade in the shares nor put them up as collateral for the duration of the merger process.

Experts said the merger process could be very long, and also there is no guarantee that the merger will materialize. “Investors have been talking to Nepse and the

companies whose shares they own for some solution, but nothing has happened. Under such circumstances, nobody would like to invest in shares,” said Sitaram Thapalia, chairman of the Nepal Investor Forum.

Earlier, there was no such provision of barring trading in the shares of BFIs headed for a merger. The ban was introduced after companies planning a merger started engaging in publicity stunts to increase their share prices and trading in the stock market. Stock analyst Rabindra Bhattarai said that this was a temporary regulation which had been brought for a specific reason in the past. “However, news of potential mergers or declarations doesn’t send share prices soaring these days,” said Bhattarai. “Therefore, against a backdrop where every tool used by the authorities to revive the stock market has failed, the restriction has become irrelevant.”

The rule has also created confusion among those involved in margin lending. If trading in shares pledged for margin lending is halted, investors might have to repay their loans at once. According to Sebon, the major thrust currently is to find a solution to this problem. Giri said that a probable solution would be stopping share trading only at the last moment or allowing the market and the companies themselves to decide when to stop trading.

Thapalia said that there should be a deadline for mergers; and if they don’t happen within the time limit, the ban on share trading should be lifted. Experts said that the regulator and the stock exchange should immediately lift the ban on share trading and allow the market, investors and listed companies to decide for themselves as is done in other countries.

Source: Kantipur

Over half of listed firms in elite group

KATHMANDU, FEB 13, 2012

Though share market has been performing poorly since last three year, Nepal Stock Exchange (Nepse) has been witnessing companies upgrading to Class A institutions, along with rise in the number of listed companies.

In the current fiscal year, some 26 new listed companies graduated to Class A making a total of 133 companies. Over half of the listed companies now falls in the elite group, according to the Nepse. In the last fiscal year, some 117 listed companies were under the Class A category from the previous fiscal year’s 94 companies. “Some 10 companies were delisted and two commercial banks, 16 development banks, two insurance companies, and six finance companies — 26 listed companies — climbed to the Class A institutions, out of the total 209 listed companies in the secondary market, it said,” adding that annually the Nepse has been classifying the listed companies in Class A, according to the international standard, though internationally credit rating agencies like Standard and Poor’s and ICICI ranks the listed companies in the global share market. In the domestic secondary market, the Nepse classifies the listed companies on the basis of paid up capital, number of shareholders, duration of profit making, book value, and on time reporting system. “A company that has minimum of Rs 20 million paid up capital, over 1,000 shareholders, making profit since last three consecutive years, has more book value than the market value and has been reporting within the six months from the ending of the fiscal year could graduate in the Class A category,” according to the Listing Regulation.

“But the classification should be more pragmatic and done by independent rating agencies,” according to a senior market analyst Rabindra Bhattarai, who opined that the current classification has become an ‘annual ritual’ only.

“The current classification criteria is based on over a decade old regulation which is not practical in the current market scenario.” The domestic market neither has any reliable credit rating agency nor our investors’ have financial literacy forcing the front line regulator itself to become more update and investor-friendly classifications, Bhattarai added.

Source: THT