Investors threaten to take to street

Share investors have threatened to take to street due to government apathy.
"We are ready to stage protests in the streets if our demands are not fulfilled," said General Investors' Association (GIA) president Deepak Karki addressing a press meet here today.
The investors' organisations -- General Investors' Association (GIA), Nepal Investors' Forum (NIF) and Nepal Securities Investors' Association (NSIA) -- are staging protests since February 18, after the government seemed reluctant to fulfil their 22-point demands. Partially addressing their demands, Nepal Rastra Bank (NRB) on Monday relaxed margin lending by five percent. However, that did not appease the investors.

Nepal Stock Exchange (Nepse), the secondary market of shares and debentures, is dysfunctional since the last three days due to their protest. There has been no trading on the Nepse floor as stockbrokers are supporting the agitation. "We want the demands of investors fulfilled and operation resumed at Nepse," said Nepal Stock Brokers' Association president Nanda Kishore Mundada.
Former Finance Minister Dr Ram Sharan Mahat has urged the government to take strong measures to revive the capital market. "The government should make the capital market stable," he said. He also urged the government to encourage banks and financial institutions to work as market makers to make the capital market progressive. If the government does not act today the capital market will crash, he added.
Nepse is in a bearish mode since last September and the benchmark index stood at 485.14 points last Thursday. Trading has halted due to investors' protest since then. The index had touched the highest point of 1,175.38 points on August 31, 2008.
Finance Minister Surendra Pandey's advisor Keshav Acharya assured investors that the Ministry of Finance (MoF) will take necessary action to revitalize the capital market. "The ministry will talk to investors to sort out the problems soon," he said. He, however, warned investors not to expect much in the current problematic scenario. "The whole economy -- monetory, exchange, capital market and real sector -- is in trouble at present," he said adding that none should expect rapid progress.
Securities Board of Nepal (Sebon) former chairman Dr Chiranjivi Nepal asked the government to exempt investors from capital gain tax (CGT) for a short time. "It could be from three to six months," he said. "If this is done, the market may flourish."
Japan and South Korea had applied the formula during the East Asian recession in 1997. Dr Nepal also called for belaying the decision to float 19 per cent of promoters' shares till Nepse gains momentum.
Prof Dr Bishombher Pyakurel elaborated the situation as bad governance. "All the problems are associated with bad governance," he said, "The government is not people friendly."
Meanwhile, Confederation of Nepalese Industries (CNI) has showed serious concern over the investors' agitation and urged the government to take the mater seriously.