In an attempt to gain investor sentiment, Dr Bhattarai tried to reassure them that the government would gradually create a base for the capital market for the development of real sector whose is not performing satisfactorily.
“This government wants to develop a capital market which is the cornerstone for the industrial development in the country. There should not be any confusion about that,” said Bhattarai at a program organized during his inspection visit on Thursday to Nepal Stock Exchange (NEPSE), the sole capital market of the country.
Nepal’s capital market began its downward journey following the government’s announcement through the current budget to increase capital gains tax, levied in the profit from share transactions, by 50 percent to 15 percent. Subsequent controversial statements made by the Finance Minister about the capital market also plagued the still-tender capital market.
The NEPSE, the barometer of the stock market, has nosedived in recent days to around 690 points, which is far low than that in September when it reached its peak of 1175 points.
The Finance Minister also expressed dissatisfaction over the nominal representation of real sector in the stock market.
“Dominance of the financial sector only in the capital market is not a satisfactory situation for the economy. We have to seek reasons behind the low representation of real sector in the NEPSE’s listing,” said Bhattarai.
He was also of the view to bring improvement in every sector of the economy to lay a strong foundation of capital market at this stage of transition from an agrarian to market-oriented economy.
He also urged capital market officials and brokers to widen the investment opportunities to small investors in other parts beyond capital.
Dr Narayan Prasad Paudel, chairman of NEPSE, informed minister Bhattarai of preparations being undertaken to set up Brokers’ back office software to make brokers’ service efficient and effective.
Shankar Man Singh, general manager of NEPSE informed the minister that preparation was taking place to restructure the NEPSE in a bid to ensure effective service delivery from the NEPSE office.
Nanda Kishore Mudala, president of the Brokers Association, demanded that the government take the initiative to introduce an internet-based trading system for wider access to overseas investors in share trading.
Krishna Hari Baskota, revenue secretary at the Ministry of Finance, alleged that a handful of investors are manipulating the capital market.
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