KATHMANDU, June 29: The stock market is reopening today. Following a directive from the Securities Board of Nepal (Sebon), Nepal Stock Exchange (Nepse) is reopening the secondary market from Monday after one and a half months due to Covid-19 pandemic.
Nepse—the country’s sole stock market—was open only for two days in the last three months after the government imposed lockdown on March 24.
Earlier on May 12, Nepse reopened the share market even though the lockdown was still in place. But the market was closed after two trading days, following the government’s instruction. The market saw a sharp decline in stock prices during the two days of trading.
While the government partially lifted the three-month lockdown on June 10, Nepse was not allowed to resume the trading of securities that was halted from May 13.
However, Sebon made a decision on Sunday to direct Nepse to resume the stock market from Monday following a massive pressure from investors.
The stock market is reopening as the economy is badly hit by the Covid-19 pandemic.
Analysts say that the adverse economic impact of the pandemic will be reflected in the stock market. As the market is reopening, investors are nervous. There is a high chance of stock market rout. They worry that the pandemic is likely to reverse the bullish trend of the stock market and send shares into freefall.
According to Nepse, the trading in the stock market will begin at 11AM and close at 3 PM. All provisions related to trading, circuit breaker and limit of price fluctuation will be applied as it were during the pre-lockdown period, according to Nepse’s notice. The trading duration was reduced to two hours per day while the stock price change was limited to 3 percent from the previous day’s closing price during the lockdown. Similarly, Nepse imposed a new rule relating to the circuit breaker that automatically halts and suspends trading if the index increases or decreases by 2 percent in a day.
Investors, brokers, Nepse, CDS and Clearing Ltd and merchant bankers will all have to follow COVID-19 safety standards. Sebon has also warned of action for those companies in the securities market who do not abide by the health safety measures. Stock broker firms are prohibited from operating screen rooms until further notice, according to Sebon.