Nepse plunges below 1,900 points

As the political parties are trying to form a new government, the share market has been losing its steam. The Nepal Stock Exchange (Nepse) index today plunged by 31.97 points and closed at closed at 1,885.31 points from the morning’s opening 1,917.28 points. 

The market witnessed a fall throughout the trading period as the investors failed to gain confidence.

on one hand the private sector is protesting against the high interest rates and on the other, there is only four days remained to end the second quarter. On top of that the squeeze in demand has hit the economy hard pulling the investors confidence down.

Thus, the daily turnover at the share market came down to Rs 1.103 billion, which was some Rs 1.65 billion on Wednesday, the last trading day of the last week, due to public holiday on Thursday.

A total of 180 companies lost in their share market value while 25 companies gained in the intraday-trading. 

The sensitive index – key measure of the performance of blue chips shares – also fell by 6.28 points today as almost all the 13 sub-indices declined, with non-life insurance sub index losing the most, by 98.40 points, today.  

Likewise, Shivam Cement posted the largest transaction of its shares worth Rs 109.36 million, whereas Nadep Laghubitta was the top loser and CYC Nepal Laghubitta gained the highest, today.

The looming political instability, lack of government seriousness in tackling economy, and loanable fund crunch in the banks and financial institutions also hit the share market hard. 

Share transactions to be suspended only for 15 days

After the investors’ pressure, the regulatory authority of the capital market has decided to shorten the duration of suspension of share transactions of companies in the process of merger and acquisition (M&A) to only 15 days.

The Securities Board of Nepal (Sebon) today issued a directive clearly mentioning that the share transactions will be suspended for a maximum of 15 working days for the completion of the M&A process that include re-registration of securities, dematerialisation and listing of securities.

The directives has formed a unified policy for all companies listed in the secondary market with the new directives, though there was a policy for trading suspension only for banks and financial institutions (BFIs) earlier.

Enforcing the directive from today, Sebon has maintained that the share transaction will be suspended for a maximum of 15 working days after the unified entity starts joint business transaction.

Investors have been suffering as they had to wait for a longer period of time for buying and selling of shares – especially the BFIs shares – that are in M&A process. As the Sebon scrapped the provision to hold share transactions of the companies, which enter the process for M&A, the new rule will give some respite to the investors, who were unable to purchase and sell their stakes for a long time until the unification process completed.

The regulator has given 15 days also for re-registration, reconciliation, dematerialisation and listing of the shares for post unification.

Earlier, the central bank has authorised Sebon to decide on the suspension of share trading of BFIs opting for M&A. Amending the Regulation for Merger and Acquisition of Banks and Financial Institutions 2073 last month – according to the announcement in the Monetary Policy for the current fiscal year – the central bank has given the right to decide on the suspension of share trading to Sebon. 

The central bank has become flexible after increasing complaints that the suspension of share trading in the secondary market for a long time during M&A adversely affected the investors.

१५५ कम्पनी सूचीबाट हटे

नेपाल स्टक एक्सचेन्ज (नेप्से) मा सूचीकृत १ सय ५५ कम्पनी सूचीबाट हटेका छन् । नेप्सेले मर्जर तथा प्राप्तिमा गएका तथा सूचीकरण शुल्क नबुझाई लामो समय कारोबारमा नआएका कम्पनीहरुलाई सूचीकरणबाट हटाएको (डिलिस्ट गरेको) हो ।

‘डिलिस्टिङ’ भएका १ सय ५५ कम्पनीहरुमा ६ वटा वाणिज्य बैंक, ८० वटा विकास बैंक, ५५ वटा फाइनान्स कम्पनी, ७ वटा लघुवित्त, ३ वटा उत्पादन तथा प्रशोधन समूहतर्फका कम्पनी, एउटा निर्जीवन बिमा कम्पनी, एउटा हाइड्रोपावर कम्पनी, एउटा व्यापार कम्पनी र एउटा अन्य समूहका कम्पनी छन् । सूचीकरणबाट हटेका अधिकांश मर्जर तथा प्राप्ति भएर अस्तित्वमा नरहेका बैंक तथा वित्तीय संस्थाहरु छन् भने त्यसबाहेक लामो समयदेखि सञ्चालनमा नरहेका, राज्यलाई कर नबुझाउने र नेप्सेमा समेत कुनै अपडेट नगराउने उत्पादन तथा प्रशोधन समूह, व्यापार समूह र अन्य समूहका कम्पनीहरु पनि सूचीकरणबाट हटाइएको छ ।

आर्थिक वर्ष २०७८-०७९ : एकै वर्ष सेयर बजारमा धेरै उतारचढाव

आर्थिक वर्ष २०७८-०७९ को अन्तिम कारोबार दिन नेप्से परिसूचक ७.९३ अंकले बढेर २००९.४७ बिन्दुमा पुगेर बन्द भएको छ । 

अघिल्लो आर्थिक वर्ष २०७७-०७८ मा २८८३.३८ विन्दुमा अन्तिम कारोबार गरेको सेयर बजार आर्थिक वर्ष २०७८-०७९ मा ३०.३१ प्रतिशतले घटेर २००९.४६ मा बन्द भएको छ । २०७८ भदौमा ऐतिहासिक उच्च बिन्दुमा पुगेको सेयर बजार परिसूचक बैंक तथा वित्तीय संस्थाहरुमा लगानीयोग्य तरलताको दबाब परेसंगै घट्न थालेका हुन् । 

लगानीर्ताहरु भने मौद्कि नीतिका कारण सेयर बजार घटेको बताउँछन् । मौद्कि नीतिले ४, १२ को नीति लिनु, सीसीडि रेसियोलाई सीडि रेसियोमा परिवर्तन गर्नु तथा रिस्क वेटेज उभरेज पनि १०० बाट १५० बनाउनुका कारण सेयर बजार घटेको लगानीकर्ता छोटेलाल रौनियार बताउँछन् । सीसीडि रेसियोलाई सीडि रेसियोमा परिवर्तन गर्दा बैक तथा वित्तीइ संस्थाहरुसंग लगानीयोग्य तरलता सुकेका कारण पनि बजारमा सिचाइ हुन नसकेको उनको भनाइ छ । साथै, रिस्क वेटेज बढाएर १०० बाट १५० बनाउका कारण पनि सेयर बजारमा लगानीकर्ता हतोत्साहि बनेको उनको भनाइ छ । सेयर भनेको जग्गाजस्तो होइन, सहजै बेच्न सक्छ, त्यसैले हाम्रो बजारमा सेयरको रिस्क वेटेज बढाउन आवश्यक नभएको उनको तर्क छ ।

२०७८ भदौ २ गते ३१९८.६० विन्दुमा पुगेर उच्चतम ऐतिहासिक किर्तीमान राखेको नेप्से परिसूचक २०७९ असार ९ गते १८४८.२८ मा झरेको थियो ।

त्यसैले सेयर बजारको नियामक निकाय धितोपत्र बोर्डको कमजोरीका कारण पनि बजारमा उतार चढाव आएको लगानीकर्ताहरुको गुनासो छ । छरिएर बसेको पुँजीलाई संकलन गरेर उत्पादनशील क्षेत्रमा लगानी गर्ने साधनको रुपमा सेयर बजारलाई प्रोत्साहन गर्नु पर्नेमा नीतिगत अस्थिरता तथा संस्थागत अस्थिरताका कारण पनि सेयर बजारले गहिराई लिन नसकेको लगानीकर्ताहरुको गुनासो छ । 

एक वर्षमा थप १ खर्ब हाराहारीका सेयर सुचीकरणका बावजुद पुजीकरण ४०.११ खर्ब रूपैयाँबाट २८.४७ प्रतिहतले घटेर २८.६९ खर्बमा झरेको छ । 

आर्थिक वर्ष २०७८-०७९ को आन्तिम कारोबार दिन शुक्रवार नेप्सेमा २ घण्टामा २३१ कम्पनीको ४० लाख ५१ हजार कित्ता सेयर १ अर्ब ४५ करोड ६२ लाख ५९ हजारमा खरिदबिक्री भएको थियो । तर, बिहीवारको तुलनामा शुक्रवार कारोबार रकम भने घटेको थियो । किनकि बिहीवार  २ अर्ब ४१ करोड १८ लाख ३४ हजार रुपैयाँ बराबरको सेयर खरिदबिक्री भएको थियो । तर, चालु आर्थिक वर्षको कुल २३२ दिन सेयर कारोबारमा २०७८ साउन ३१ गते सबैभन्दा धेरै २१ अर्ब ६४ करोड ७६ लाख बराबरको ऐतिहसिक सेयर कारोबार भएको थियो ।

नेप्सेका अनुसार आर्थिक वर्ष २०७८-०७९ भरीमा कूल ११ खर्ब ७९ अर्ब २६ करोड ८८ लाख ५९ हजार ९९ रुपैयाँको सेयर कारोबार भएको थियो । 

Insurance Board sets two-term limit for board members of insurers

The regulatory authority of the insurance sector barred the board members of insurance companies from assuming the position for more than two terms.

Revising a directive on the ‘institutional corporate governance’ of the insurers, the Insurance Board (IB) has enforced the new provision.

A single term of a board member has been fixed at four years, which means a board member cannot assume his position more than 8 years.

Likewise, individual board members cannot purchase shares and debentures issued by the insurance companies, where he or she is a board member, the new amendment reads, adding that they cannot even be involved in the transaction of the company’s shares and debentures for up to one year after the termination of their contracts.

Insurers will have to assess the effectiveness of their annual plans and policies on a quarterly basis,  it reads, adding that the companies will also have to conduct the due diligence audit every five years and report the regulator within a fixed time period.

Listed companies now must deposit cash dividend with a detail to bank accounts

The capital market regulator today directed all the listed companies to deposit cash dividend with a clear detail at the shareholders’ bank accounts.

The Securities Board of Nepal (SEBON) -- issuing a directives -- asked the listed companies to deposit cash dividend at the shareholders account with details, because only the share registrar's name is mentioned in the bank statement currently. But the regulator directed the companies to mention with a details including name of the company, fiscal year and the rate of the dividend.

The shareholders have been repeatedly complaining with the regulator about the lack of clear information while receiving the dividends in the bank account.

"The company must have to clearly include the name, income and amount while paying cash dividend to the shareholder's bank account by itself or through its share registrar," the directives read.

Probe committee recommends action against Sebon chair

The probe committee has recommend government to take action against chair of the Securities Board of Nepal (Sebon) Bhisma Raj Dhungana. The committee reported that Sebon chair misused his position to take undue advantage.

Submitting its report to the government today former High Court Judge Ananta Raj Dumre, who led the committee, said that the government will do needful as his team has completed its duty. The committee handed the investigation report to finance minister Janardan Sharma at a programme organised at the Finance Ministry.

The cabinet had formed the committee on September 1 to investigate the allegations against Sebon chair Dhungana.  It was asked to submit its report within 15 days.

Receiving the report, finance minister Sharma said that the government will take necessary decision after studying it. He also vowed to protect interests of all investors in the capital market.

The Sebon chair Dhungana and Nepal Stock Exchange (Nepse) chief executive officer (CEO) Chandra Singh Saud have been blamed for taking golden shares of the Sarbottam Cement -- that is preparing to issue public share through book-building process -- in the name of daughter and wife.

The Public Accounts Committee (PAC), under the parliament had summoned the both and directed the government to take action against both of them on the allegation. Likewise, Earlier On August 20, the Finance Committee also had decided to take action against Sebon chair and Nepse CEO Saud for taking unfair advantage of their position while purchasing the shares.

The Finance Ministry had also sought clarification from both of them.
On August 24, Saud has resigned claiming that he has not misused his position, while buying Sarbottam Cement share in the name of his wife.

Government suspends Sebon chief, forms probe panel

The government has suspended Securities Board of Nepal (Sebon) chair Bhisma Raj Dhungana, and formed an investigation committee led by a former judge.

The cabinet today suspended Sebon chair Dhungana, to investigate his alleged involvement in 'the golden share' case in the Sarbottam Cement, and formed a three-member probe committee led by former judge of High Court Ananta Raj Dumre, confirmed the law and justice minister Gyanendra Bahadur Karki.

"The three-member committee has Naraya Prasad Poudel as an expert member, and joint secretary of Nepal Law Commission Arjun Kumar Khadka, apart from Dumre," Karki said, adding that the probe committee has been formed under the Sebon Act 2063, Article 7 (7). "The government has release Sebon chair, if he is found guilty by the probe committee."

Sebon chair Bhisma Raj Dhungana has been accused of being involved in 'golden share' case as his daughter, who lives abroad, has been found purchasing some 11,992 units of shares of Sarbottam Cement that is in the process to issue primary shares to the public through book building process.

Though, the face value of a unit share is Rs 100, Sarbottam Cement share will be floated in Rs 750 per unit through the book building process. But Dhungana's daughter and Saud's wife both bought the share in Rs 250 per unit.

Sarbottam Cement is waiting for final approval from the Sebon to issue its 6 million units of primary shares to the public. But, Sebon chair Dhungana has been accused of purchasing the shares before the company goes public. Apart from Dhungana, Nepal Stock Exchange (Nepse) chief executive office (CEO) Chandra Singh Saud has also been found purchasing shares in his wife's name.

Finance Ministry has sought clarification from the Sebon and Nepse, both after it was found that their kins have bought the share of Sarbottam Cement before it goes to public.

On August 20, the Finance Committee -- under the House of Representatives -- has also directed the government to take action against Sebon chair Dhungana and Nepse CEO Saud for taking unfair advantage of their position, while purchasing the shares.

The Finance Committee had also summoned both of them for discussion, where they were grilled by the parliamentarians.

During the meeting, Dhungana claimed that his married daughter is free to do any trading on her own, and a father is not liable for married daughter's trading. Likewise, Saud also claimed that he has not donea anything agsinst law. But the parliamentarians demanded resignation of both Dhungana and Saud for their alleged involvement in golden share case.

The Finance Committee also formed a probe committee led by finance secretary Madhu Kumar Marasini with joint secretary Dirgha Raj Mainali and three experts.

The Employees Union of the Sebon has also urged the government to carry out an investigation into the controversial case of Sebon chair’s alleged involvement.

After pressure from the public, Nepse CEO Saud resigned but Sebon chair has still been claiming that he has not taken any advanteg.

Sebon, is the regulatory authority of the capital market that has around 3.8 million investors.

Earlier, the Commission for the Investigation of Abuse of Authority (CIAA) has also asked the Sebon to provide necessary documents to investigate Sebon chair Dhungana’s alleged involvement in Sarbottam golden share scam.

Finance Committee directs government to take action against Sebon and Nepse officials

 Concluding that the officials of Nepal Securities Board (Sebon) and Nepal Stock Exchange (Nepse) misused their posts and took unfair advantage, the Finance Committee -- under the Federal Parliament -- today directed the government to investigate into their alleged involvement in the 'golden share' case of Sarbottam Cement, and  take action against them.

The parliamentary committee also directed the ministry to take action regarding the case and furnish details.

Asking the ministry to prepare a draft of share market policy, legal, structural, managerial, and technical aspects reform, the committee also suggested promotion of transparency, morale, good conduct, responsibility and accountability in the share market.

Answering the parliamentarians questions, finance minister Janardan Sharma informed them of formation of committee to investigate into the case. "The ministry’s attention has been seriously drawn in the transaction of shares of Sarbottam Cement," he said, adding that the committee will recommend legal action, if any ill-intention was found.

The share market has become an alternative to the investors as economic activities have been halted due to Covid-19. The share market has attracted around 3.5 million investors as an alternative investment avenue.

The committee’s chair Krishna Prasad Dahal also asked the ministry to ensure the healthy, fair and transparent transactions in the share market. "The government should remain alert to the possibility of irregularities in the share market," he added.

The parliamentarians were of the view that the connection of Sebon and Nepse officials in share transactions is a moral issue, though the law has not barred the relatives of the officials to trade in the share market.

On the occasion, former finance minister Surendra Prasad Pandey said that the share market is yet to gain public trust. Likewise, lawmaker Ram Kumari Jhankri insisted on investigation of alleged involvement of higher officials of Sebon and Nepse in share trading.

Sebon is the regulatory body of the share market and Nepse is the frontline regulator. But the chair of Sebon Bhishma Dhungana was reportedly found involved in influencing the share market as his daughter purchased 10,000 units of Sarbottam Cement's share, whereas Nepse chief executive officer Chandra Singh Saud had also bought shares of Sarbottam Cement in the name of his wife. The Sarbottam Cement is issuing the public share through book-building.

The finance ministry had sought clarification from the Sebon and Nepse on July 28. The Financial Sector Management and Corporation Coordination Division of the finance ministry had asked Dhungana and Saud to send their clarification within three days. They have also submitted the clarification within three days.

Chandragiri Hills floats shares for locals today

 Chandragiri Hills Ltd has floated 3,06,819 units of primary shares – to the locals effected by the project – from today.

“The company has issued initial public offering (IPO) shares worth Rs 184 million to the project-affected locals of Chandragiri Nagarpalika in Kathmandu and Thaha Nagarpalika in Makwanpur district today,” according to the company. “The IPO will remain open for next two weeks,” it said, adding that the company will further extend the period by another two weeks, if unsubscribed. “Global IME Capital has been appointed as the issue manager for the Initial Public Offering.”

Out of the total IPO, some 3,06,819 units or 2 per cent of the total paid-up capital and 10 per cent of the total paid-up capital will be issued to the project affected locals, and for the public, respectively.

Likewise, the major promoters of the company will hold remaining 88 per cent of.