NDEX Money Expo in the offing

KATHMANDU, July 17, 2012

A three-day NDEX Money Expo 2012 is being held in the capital from August 31 to September 2. Arthik Abhiyan daily and Jamb Technologies in association with Minds Nepal and Morningstar Investment Services are organizing the event.

According to the organizers, the expo is a unique business-networking event for the companies of financial sectors and their constituents. It provides investors a valuable opportunity to speak directly with the nation´s top financial expert related to trading and investment, banking, insurance, mutual funds, stocks, tax strategies, commodities and personal financial planning.

Speaking at a press meet held on Monday, Suraj Vaidya, president of Federation of Nepalese Chamber of Commerce and Industries, said that the expo will help in motivating the investors and bring in investment by creating environment for interaction between different industrialists and business giants. “Events like this should be organized in regular intervals as they will definitely help improve investment climate in the country,” said Radesh Pant, CEO of Investment Board.

The expo will have more than 122 stalls of different regulatory bodies, stock and commodity exchanges, banks and financial institutions, merchant bankers, investment companies, brokerage companies, remittance, insurance companies, depositors and clearing houses, portfolio management companies, financial knowledge management and training institutes, microfinance and cooperatives, traders and investors associations and clubs and financial domain technologies among others.

Besides, various other events like seminar and speeches from financial experts, regulators, analyst and top investors, art exhibition and quiz contest, national and international currency show, trading and investment movie show will also be organized at the sidelines of the expo.
The organizers are expecting footfall of more than 300,000.

Source: Republica

Commodities market awaits reform

KATHMANDU, MAY 8, 2012

The commodities market is suspected to be engaging about one-third of the total market capitalisation of Nepse as an investment. The commodities market of Nepal consists of six commodity exchanges, 20,000 investors, 200 brokers and 400 sub-brokers, according to the interim report submitted by a study team which was assigned to conduct a research on the country’s commodity market.

The capital market though has only one stock exchange, 47 brokers and 300,000 investors and handles daily transactions worth Rs 10 million on average. The active investors engaged in stock trading and frequent secondary transaction, however, is estimated to be as less as 15,000.

“Though the actual amount is yet to be calculated, the initial draft suggests that the overall money involved in the commodities market could be as high as Rs 100 billion,” pointed out an official closely associated with the study at Securities Board of Nepal (Sebon), which has been commissioned to undertake the role of a regulator of the commodities market.

Nepse’s market capitalisation stands at Rs 381 billion with 215 companies and around 25 types of bonds listed. “The size and amount of money that appears to be involved in the market signals the urgent need to bring them under a regulatory net else a huge financial disaster is round the corner,” said the official.

The High Level Financial Coordination Committee had asked the capital market regulator to conduct a detailed study in order to draft the regulation. The study committee that has already submitted the first draft is supposed to submit its final report by mid-May.

Based on the findings of the study, Sebon and concerned regulators will design the regulation. Sebon is seeking to amend the Securities Act-2063 to include the commodities market to regulate it. Despite handling such a huge amount of public’s money, there are no regulations in place, thus drafting a law to bring them under some control as soon as possible is an imperative.

“There is no regulation or guideline that protects the interest of the investors who have been investing through these exchanges in different commodities trading making their situation extremely vulnerable,” he pointed out. These exchanges have started their businesses by only obtaining a licence from Company Registrar’s Office under the Company Act.

“The Company Act is extremely vague and is not strong enough and has left the regulation and supervision to respective regulators that govern specific companies,” he added. The commodity exchanges that had requested the government for a regulator time and again had initially refused to cooperate with the study.

“Their hesitation in sharing information has raised suspicion that they could be involved in deals that are not in the interest of the investors,” said the officer. The huge size of the commodities market on one hand and the relatively smaller capacity of Sebon on the other has even raised questions whether the capital market regulator will be able to effectively regulate the technically mind boggling and complicated market.

Source: THT

Master plan to modernize stock market on cards

In a bid to strengthen and modernize the sole capital market in the country, Securities Board of Nepal (SEBON) - the capital market regulator -- is preparing to formulate a five-year master plan with the financial and technical assistance from the World Bank (WB). SEBON took the step after a number of studies showed that the country´s capital market was lagging far behind most of the stock markets in the SAARC region due to lack of necessary infrastructures and autonomous regulatory mechanism.

Surbir Poudel, chairman of SEBON, told myrepublica.com that one of the objectives of the proposed master plan was aimed at making necessary amendments in existing laws related to capital market, thereby upgrading capacity of regulatory body and establishing necessary infrastructures in the capital market. "The five-year master plan will incorporate a number of programs with the vision of upgrading our capital market at least to the SAARC standard," Poudel told myrepublica.com on Tuesday. He said development of other institutions related to capital market such as Credit Rating Agency and modern securities trading system -- Central Depository System -- will also be included in the master plan.

Implementation of a full-fledged internet based securities trading, attracting foreign investments to domestic share market, and paving the way for setting up new stock markets have also been envisioned in the master plan.The World Bank a few months ago had agreed to provide a financial support of $152,500 to SEBON -- the stock market regulator -- for the master plan. "We will complete draft of the plan within the next six months as the WB has already selected consultancy for the purpose," he said. After getting Finance Ministry´s nod, SEBON had submitted the proposal for formulating master plan to the WB last year. Poudel informed that SEBON would plan short-term, medium-term and long-term programs to modernize the capital market as per the master plan which will be a blend of the best of international practices and local context. "We will incorporate the short-term plan under our annual programs, while the medium-term and long-term plan will be implemented as per the target of the master plan," he added.