KATHMANDU, June 24: The Securities Board of Nepal (Sebon) has revised the pricing range of stocks in pre-open market session in Nepal Stock Exchange (Nepse) in an apparent bid to check the excess rise in share prices on daily trading in the secondary market.
Issuing a press release on Thursday, Sebon has reduced the price fluctuating range of stocks to two percent from the existing five percent in pre-open market session of the secondary market. “The new provision will enable investors to buy/sell the stocks at competitive prices along with increasing the transaction amount,” said Sebon, citing the current practices made in the stock exchange market of neighboring countries.
Pre-open market session is the period of trading of shares that takes place just before the secondary market opens for transaction on trading days. The transaction price in this session, which takes place between 10:30 am to 10:55 am, is the benchmark for opening price of the stocks for daily trading.
In the new provision, the prices of stocks in a pre-open market session will be allowed to fluctuate at a maximum of two percent of the closing price of the previous day. For example, if any scrip is closed at Rs 200 per unit on the previous day, the price in the pre-open will be allowed to fluctuate only between Rs 196 and Rs 204 per share. As of now, the range has been fixed in between Rs 190 and Rs 210 per share.
Likewise, Sebon has also reduced the minimum price change of stocks in each transaction from Re 1 to 10 paisa per share. The regulator has come up with new regulations at a time when Sebon is being criticized for its intervention to influence the stock prices in the bull market.