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Capital market regulator urges financial market regulator for better coordination

The capital market regulator urged the financial market regulator to coordinate before bringing any policy as it could hit the capital market.
Securities Board of Nepal (Sebon) today asked central bank to coordinate with it before taking any decision on banks and financial institutions as they are listed companies. ‘Central bank decision might hit the share market,” the officials of the board said, adding that lack of coordination between the two regulators could bring complications.
Recently, the central bank limited banks and financial institutions on investments in held-for-trading securities to one per cent of their core capital. Held-for-trading securities are shares or bonds bought with the sole purpose of selling them at a profit after a short period. Though the central bank has clarified that the directives will not attract any long-term investment, the investors have lost the confidence on the market.
“The board will request central bank to consult before bringing such regulations,” director at the board Paristha Nath Poudyal, said, urging the investors not to panic over the recent fall in the stock market.
Likewise, the board’s spokesperson Niraj Giri, on the occasion, said that the board is closely watching the stock market’s movement. “As the secondary market is dominated by shares of banks and financial institutions, small changes in central bank policies could bring stock market down,” he said, adding that the stock market trend suggests that it should look up now. “Had the stock market institutional investors, the market could not have seen huge drop.”
Trying to comfort the investors, Nepal Stock Exchange (Nepse) general manager Sitaram Thapaliya said that there was no particular reason to pull the stock market down. “However, the investors should consider before buying shares,” he added.
Likewise, former chairman of the board and economic advisor of the Prime Minister Dr Chiranjeevi Nepal described the current drop in the stock market as abnormal.