Electronic share trading begins
Electronic share trading began here today – for the first time in the country – with two stockbrokers Kalika Securities and Trishakti Securities trading some 30 units of dematerialised shares of Agriculture Development Bank Nepal.
Nikesh Neupane sold his dematerialised shares through Kalika, which was purchased by Sushil Sapkota through Trishakti Securities.
The paperless system of transaction will not only pressurise the authorities to adopt a full-fledged online trading system but also encourage the investors to trade more.
Government authorities – including the CDS and Clearing Ltd and Securities Board of Nepal – need to bring the entire listed companies into demat system of share trading within six months after the first transaction of dematerialised shares, according to CDS Bylaws 2012. However, it might be challenging for the CDS and Clearing Ltd and also the listed firms to demat all their stakes.
Since last few years, the government has been planning to demat the stocks and start paperless trading, but only 16 firms – out of listed 235 firms at the Nepse – have demated or are planning to demat their stakes.
The government set up CDS four years ago to promote online clearance of stock trading. Despite its claim of starting full-fledged online trading and clearing system by October, 2013, the CDS has failed to implement also due to various listed companies' reluctance to acquire licences of clearing members and depository participants.
The CDS has demated some 6,392 stocks, whereas only 10 companies have acquired the DP license.
In the paperless transaction, an investor will have to register selling orders only after converting their share certificates into the paperless format, which can be done through depository participants.
Both clearing member and depository participants will be linked to CDS through software helping settle stock transaction immediately.