Investors Alarmed by Sharp Decline in Share Market

March 25: Share market in Nepal has been declining since the past four months which has saddened the investors. Share owners have demanded the government and lawmakers to address this issue.

 Investors during an interaction program conducted by Nepal Capital Market Investor Association and Nobel Initiation Nepal on Thursday, March 22, had made such demand due to the huge loss they have suffered as a result of declining share market.

More than 3 million investors have invested Rs 31 trillion in the capital market but the current value of their share investment has fallen below Rs 15 trillion.

According to an investor, more than half of the total invested capital has lost its value in a short time. He demanded that the concerned authorities have to explain the cause for these alarming losses.

During the interaction program, representatives from Nepal Stock Market and Nepal Collateral Board claimed that the distribution of right and bonus shares has cause the share market to decline.

According to policymakers, companies should have expanded the reserves rather than increasing the paid up capital which would have stopped the market to run out of liquidity.    

The investors also demanded issuing broker license to commercial banks. They suggested that operating additional stock-broker companies would help promote investment in Nepal.

Falling demand and rapid rise in sales is the actual reason for the decline of share market, claimed Chandra Singh Saud, CEO of NEPSE, during the event.

Saud also informed that the share market has not declined because of policymakers but because of the shareholder themselves who have sold their shares following rumors. 

“We have decided to start online system by next month. It will boost the market back to its position. Online system is a must prior to issuing broker license to banks,” he added.

Stoke brokers should also be authorized for share dealership, suggested Niraj Giri, spokesperson for Nepal Collateral Board.

Similarly, central bank is conducting research to issue broker license to commercial banks, he added.