As Nepal Stock Exchange (Nepse) index hit almost six-year low amid continued loss in investors´ confidence, Babu Ram Shrestha, chairman of Sebon, said the Board was proposing a relaxation of income disclosure provision as a new attempt to revive the market.[break]
"We are discussing this proposal at Sebon´s upcoming board meeting," Shrestha told Republica.
Currently, investors purchasing shares worth over one million rupees need to disclose source of their income. The threshold of income disclosure for purchasing land and housing, on the other hand, stands at Rs 10 million.
Shrestha said Sebon has already discussed the issue of harmonizing the income disclosure provision in various investment avenues with Nepal Rastra Bank (NRB).
"We feel share investors deserve no less privilege," said Shrestha, stressing that it was high time the government created conducive environment in the capital market.
He also revealed that Prime Minister Baburam Bhattarai and Finance Minister Barshaman Pun were also positive about making the relaxation to the share investors.
The Sebon is pushing for the relaxation mainly after the prime minister directed the NRB and Sebon to come up with ways to resolve the problems in the sector.
Shrestha further disclosed that Sebon board is also endorsing the Central Depository System (CDS) Bylaws coming Sunday in a bid to modernize the capital market. "We will see great change in capital market with the introduction of CDS -- online-based trading of shares," said Shrestha.
He also stressed on the need to invite more institutional investors and small investors to give a new lease of life to the capital market which has been witnessing drop in investment.
"Role of institutional investors, who can absorb huge number of shares in the stock market, is vital. Mutual funds are also key medium to bring the investment from small investors. So, we are encouraging both institutional investors and mutual funds," he added.
Out of the four institutions applying for running mutual funds at Sebon, Shiddharth Mutual Fund got the green signal whereas Laxmi Bank, Nabil Bank and NMB are awaiting permission.
Similarly, three institutional investors--Employees´ Provident Fund, Citizen Investment Trust and Rashtriya Beema Sansthan have already started to invest in the share market.
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