FM vows capital market development

Finance Minister Surendra Pandey assured investors of including their suggestions in the coming budget for the development of capital market.
"The government is committed to create an investment-friendly environment and develop capital market," he said while inaugurating a workshop on 'Stock Market Development in Nepal: Issues and Challenges for Reform', organised by Nepal Investors' Forum here today.
During the last one-and-half decade, the sector has grown significantly in Nepal. And, with the development and reforms in financial sector the stock market also grew, said Prof Dr Bijaya KC presenting his paper on the occasion. "Stock market size, liquidity, concentration and volatility are indicators for measuring the rate of stock market development," he said adding that the relationship between various attributes of the stock market and economic growth of nations has developed a set of indicators under these categories to conceptualise the nature of such relationship.
Commenting on Prof KC's paper, Dr Chiranjivi Nepal, former chairman of Securities Board of Nepal (Sebon), said international research has shown that economic growth is directly related to the stock market. "The paper missed three major indicators like asset price effect, regulatory and international development and conglomerate index," Dr Nepal commented.
According to one study, Nepal's stock market falls in the under-developed category among a 41-nation study which has termed the Japanese, US and UK stock markets the most developed and Nigerian, Colombian and Zimbabwian stock markets least developed.
Though the number of investors, shares and listed companies has increased in recent years, Nepal's stock market is grossly inflated. It has no direct relationship with real economic growth. "The share prices go up if there is economic growth," he said adding that in Nepal the share prices are going up but the factor is not supported by economic growth as the gross domestic product (GDP) is going down.
Rewat Bahadur Karki, former general manager of Nepal Stock EXchange (Nepse), and Deepak Kafle, former chairman of Sebon, also commented on the paper that concluded that the Nepali stock market is underdeveloped and has failed to have a significant impact on the overall economy.Earlier, welcoming the participants, Rana Keshav Pradhan, general secretary of Nepal Investors' Forum complained of government apathy towards the stock market.