Erroneous policies, weaker regulators hurt investors’ confidence

Investors have blamed the failure of the regulatory authorities and government’s unstable economic policy for the poor performance of the share market.
“The weak regulatory agencies are to be blamed for the low confidence among investors which has led to the current poor performance of the share market,” blamed investors during an interaction on the share market here at the Finance Ministry today.
“The front line regulator Nepse and the capital market regulator Securities Board of Nepal (Sebon) have both failed to protect the rights of investors distracting them from the capital market,” they blamed, adding that the listed companies are not following regulatory norms but the regulatory authorities have not been able to punish them and protect the rights of the investors, let alone form an encouraging policy.
Nepse is considered the mirror of the economy and the Nepse index which at present is below 500 points reflects the low confidence of the fiscal and monetary policies, said former Nepse managing director, Rewat Bahadur Karki. The government is back tracking on the economic policy and heading towards a controlled economy, discouraging investors, he said, adding that the market distorting decisions of the government has also hit the confidence of investors.
The share market has been hovering around 312 points from the beginning of this fiscal year’s 378 points despite good performances of banks and financial institutions. But single sector concentration is also not sustainable for the market, said chairman of Sebon Dr Baburam Shrestha.
“Nepse’s inefficiency coupled with high supply and low demand and single sector concentration has discouraged investors,” he said.
The listing of all the hydropower companies of Nepal Electricity Authority (NEA) could help diversify the share market, suggested share market analyst Rabindra Bhattarai.
“The listing of NEA’s hydropower companies will not only help diversify the market but also help cash-strapped NEA collect capital for new hydropower projects. The share market could be revived with diversification,” he said.

Right time to invest
KATHMANDU: It is the right time to invest, according to central bank governor Dr Yubaraj Khatiwada. Banks and financial institutions have excessive liquidity and the current low prices of shares should be appealing to investors, he said, adding that the central bank is open about making policy changes to encourage investors to boost the share market. “All the economic indicators are positive that should help boost the confidence of the investors.”