KATHMANDU, July 15: The parliamentary Finance Committee has given the government a 10-day deadline to submit a study report on various problems affecting the country's stock market.
Expressing concern at a meeting on Wednesday, the House of Representatives committee directed the government to study issues such as short selling, the introduction of new financial instruments, the expansion of institutional investors in the market, coordination between banks and the stock market, enhancement of investor confidence, and policy stability, among others.
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Speaking at the meeting, Rastriya Swatantra Party lawmaker Vidushi Rana questioned government officials about their strategies to increase long-term and institutional investment in the share market. "Although there is significant investment potential, with an overwhelming number of Demat accounts and Mero Share users, the market's depth and liquidity have weakened," Rana said.
The Securities Board of Nepal (SEBON) has long been discussing the introduction of new capital market instruments such as a corporate bond market, an SME exchange, Real Estate Investment Trusts (REITs), Exchange-Traded Funds (ETFs), and venture capital. However, none of these have materialized to date.
CPN-UML lawmaker Pushpa Raj Kandel said Nepal's share market has failed to mobilize adequate capital for productive sectors. He blamed SEBON for delaying approvals for companies awaiting permission to issue initial public offerings (IPOs) and rights shares.
Nepali Communist Party lawmaker Parshu Ram Tamang expressed concern over the lack of coordination between the country's banking sector and the capital market. "Despite banks sitting on excess liquidity, the capital market continues to move at a snail's pace," Tamang said.
