Securities Board of Nepal (SEBON) -- the capital market regulator-- has prepared a draft regulations of Central Depository System (CDS) that would replace existing manual transactions and enable settlement of share transactions in a scientific and reliable way.
“We have sent the draft to India´s Central Depository Service Ltd and Securities Board of India -- India´s share market regulator-- for feedback and comments. We are also in the process of collecting suggestions from experts and stakeholders within the country,” said Surbir Paudel, chairman of SEBON.
SEBON has prepared the draft regulation as per the existing Securities Exchange Regulations 2006 in a bid to facilitate opening CDS Company in the country. CDS is aimed at introducing a paperless share transactions and settlement of shares´ ownership through online technology, which would make transactions faster.Under the existing system, investors have to wait at least two weeks to get ownership of shares transferred.
The modern technology in share transaction will enable online security transactions and settlements, online keeping of share accounts of investors, online deposits and transfer of shares, distribution of electronic version of certificates of deposits, among others.
The draft includes the provision such as opening of separate accounts of investors on the basis of agreement, keeping record of share transactions both online and manually.
The draft has provisioned at least five years of working experience, Chartered Accountant or post graduate to become the Chief Executive of the CDS Company and except in a case of permission from Nepal government, CEO of the company would be a Nepali citizen and elected by the board of directors that comprise nine members of which three would be independent.
Under the regulation the CDS Company can appoint Depository Participants (DPs) accept deposits of securities including government bonds, share certificates, shares.
However, such DPs must be listed in the securities market, not included in the black list of Credit Information Bureau, submit audit report for last consecutive three years and have branches in all five development regions.
In the CDS Company, Nepal Stock Exchange (Nepse) will be major promoter with 50 percent share where as Citizen Investment Trust and different commercial banks including Himalayan Bank, Nepal Investment Bank, Bank of Kathmandu, Kumari Bank and NIC Bank will have 25 percent stake each.
In addition to the government´s investment, India has agreed to provide Rs 140 million to implement the CDS through a public limited company to systematize the security trading in Nepal´s stock market. The government has, in the current fiscal´s budget, announced to introduce CDS by the mid-October 2009. In the beginning, the total paid-up capital of the company would be Rs 300 million.
Source:Republica
Sunday, September 20, 2009
Saturday, September 19, 2009
Nepal Drops in economic freedom ranking
A global report on Economic Freedom 2009 has ranked Nepal at the 129th position among 141 countries, indicating that the country lacks adequate policy encouragement, access to money and freedom to trade, which are vitally important to build prosperity and reduce poverty. Nepal´s rank for the year is down by a spot, as the Fraser Institute -- Canada´s leading economic think tank that produces the report -- had ranked Nepal at the 128th position in its last year´s report
Global Bank to issue Right share
The 90th BOD meeting of the company held on 13th September 2009 (2066 Bhadra 28) has decided to propose 2:1 rights share for its capital increment which is subject to approval from NRB & its upcoming AGM. BOD has also decided to amend its Memorandum of Association for adjustment of capital structure of the Bank.
According to the fourth quarter financial report of the bank, it has earned Rs. 30.488 million net profit for fiscal year 2065/66 along with Rs. 64.750 million operating profit. It has 1 billion paid up capital and holds Rs. 22.621 million in its reserve and surplus.
(Source: Jamb News Service)
According to the fourth quarter financial report of the bank, it has earned Rs. 30.488 million net profit for fiscal year 2065/66 along with Rs. 64.750 million operating profit. It has 1 billion paid up capital and holds Rs. 22.621 million in its reserve and surplus.
(Source: Jamb News Service)
Saturday, August 15, 2009
Ebanking for Nepalese Businessman
In an endeavor to empower the Nepalese businesses to meet the demands of the financial industries, NEC, Asia, a wholly owned subsidiary of NEC Corporation Friday introduced its wide range of superior server systems here in the capital.
Similarly, Decillion Group, an NEC Company, also announced its successful franchise of Service Platform including SWIFT Service Bureau and Anti-Money Laundering (AML) Filtering, as well as their ‘Best of Breed’ solution, such as Modular Automated Processing (MAP) System and Signature Inquiry System (SIS) to Nepal.
The company has also officially appointed International Electronic Concern (IEC) as its official distributor far all server solutions in Nepal.
David Ooi, NEC Asia’s regional Director and Shyam Bahadur Shrestha, IEC’s Executive Director signed a Memorandum of Understanding (MoU) to tie up the alliance.
The company claimed that NEC range of enterprise servers are such innovations that are designed to address the problems faced by big enterprises and data centers and are environmentally friend.
Among the launched products, NEC Express5800/iModel servers, features 1U rack optimized size with DC use design including energy efficient architecture.
Likewise, the NEC Express5800/ft series delivers optimum reliability and operational flexibility. And, the NEC’s Virtual PS Center (VPCC) solution is introduced to provide a complete desktop virtualization solution with secure computing platform.
On the signing occasion, Ooi, said that NEC’s experience in the global market and commitment to help empower the client’s business had inspired towards building relationship with the Nepalese financial community.
“We look forward to more knowledge transfer as NEC and the Nepalese financial players learn from one another,” he added.
Source: Arthakoartha.com
Similarly, Decillion Group, an NEC Company, also announced its successful franchise of Service Platform including SWIFT Service Bureau and Anti-Money Laundering (AML) Filtering, as well as their ‘Best of Breed’ solution, such as Modular Automated Processing (MAP) System and Signature Inquiry System (SIS) to Nepal.
The company has also officially appointed International Electronic Concern (IEC) as its official distributor far all server solutions in Nepal.
David Ooi, NEC Asia’s regional Director and Shyam Bahadur Shrestha, IEC’s Executive Director signed a Memorandum of Understanding (MoU) to tie up the alliance.
The company claimed that NEC range of enterprise servers are such innovations that are designed to address the problems faced by big enterprises and data centers and are environmentally friend.
Among the launched products, NEC Express5800/iModel servers, features 1U rack optimized size with DC use design including energy efficient architecture.
Likewise, the NEC Express5800/ft series delivers optimum reliability and operational flexibility. And, the NEC’s Virtual PS Center (VPCC) solution is introduced to provide a complete desktop virtualization solution with secure computing platform.
On the signing occasion, Ooi, said that NEC’s experience in the global market and commitment to help empower the client’s business had inspired towards building relationship with the Nepalese financial community.
“We look forward to more knowledge transfer as NEC and the Nepalese financial players learn from one another,” he added.
Source: Arthakoartha.com
No more Ghost Companies in NEPSE
Securities Board of Nepal (SEBON) is preparing to bar the directors of previous companies, which opened and suddenly vanished, from registering new companies.
“There are many companies that issued shares and vanished into thin air,” said Sebon chairman Dr Surbir Poudel talking to the newly elected committee of Society of Economic Journalists Nepal (Sejon) here today.
“To discourage the practice, we are planning to bar the directors in order to prevent fraudulent companies,” he said adding that Sebon wants to save investors from getting cheated. The board has also prepared a disclosure reporting format for companies other than banks and financial institutions as the latter two groups are more transparent due to their regulator Nepal Rastra Bank’s effective monitoring. “Except banks and financial institutions, other companies are not transparent and have no proper disclosure system,” he said citing the reason for low investor attraction in the real sector companies that have less than 15 per cent presence in the secondary market. Manpower crunch and lack of teeth has hit the board, he opined. “As a regulator of the capital market, the board must have teeth — more regulations and capable manpower,” he said admitting Sebon’s weakness in acting against companies that do not follow its directives.
However, the board is not sitting idle. This Monday, it wrote a letter
to Taragaun that manages the Hyatt Regency hotel seeking an explanation why it has not paid back the money of the preferential shares to shareholders. Taragaun has neither returned the money nor given the interest to the investors. “After the investors complained to Sebon, the regulatory authority sought an explanation within seven days,” he added.
The board is soon bringing Portfolio Management Directives — to manage the market more effectively. It has more on its plate too, like Mutual fund Act, 10-year Master Plan for long-term development of the capital market and Central Depository System (CDS).
“Probably Prime Minister Madhav Kumar Nepal during his trip to India next week will visit the CDS company and stock exchange there,” he said adding that the government has started taking the capital market seriously.
Source: THT
“There are many companies that issued shares and vanished into thin air,” said Sebon chairman Dr Surbir Poudel talking to the newly elected committee of Society of Economic Journalists Nepal (Sejon) here today.
“To discourage the practice, we are planning to bar the directors in order to prevent fraudulent companies,” he said adding that Sebon wants to save investors from getting cheated. The board has also prepared a disclosure reporting format for companies other than banks and financial institutions as the latter two groups are more transparent due to their regulator Nepal Rastra Bank’s effective monitoring. “Except banks and financial institutions, other companies are not transparent and have no proper disclosure system,” he said citing the reason for low investor attraction in the real sector companies that have less than 15 per cent presence in the secondary market. Manpower crunch and lack of teeth has hit the board, he opined. “As a regulator of the capital market, the board must have teeth — more regulations and capable manpower,” he said admitting Sebon’s weakness in acting against companies that do not follow its directives.
However, the board is not sitting idle. This Monday, it wrote a letter
to Taragaun that manages the Hyatt Regency hotel seeking an explanation why it has not paid back the money of the preferential shares to shareholders. Taragaun has neither returned the money nor given the interest to the investors. “After the investors complained to Sebon, the regulatory authority sought an explanation within seven days,” he added.
The board is soon bringing Portfolio Management Directives — to manage the market more effectively. It has more on its plate too, like Mutual fund Act, 10-year Master Plan for long-term development of the capital market and Central Depository System (CDS).
“Probably Prime Minister Madhav Kumar Nepal during his trip to India next week will visit the CDS company and stock exchange there,” he said adding that the government has started taking the capital market seriously.
Source: THT
Friday, August 7, 2009
Nepal Share Market
Introduction
Nepal Stock Exchange, in short NEPSE, is established under the company act, operating under Securities Exchange Act, 1983.
The basic objective of NEPSE is to impart free marketability and liquidity to the government and corporate securities by facilitating transactions in its trading floor through member, market intermediaries, such as broker, market makers etc. NEPSE opened its trading floor on 13th January 1994.
Government of Nepal, Nepal Rastra Bank, Nepal Industrial Development corporation and members are the shareholders of NEPSE.
History
The history of securities market began with the floatation of shares by Biratnagar Jute Mills Ltd. and Nepal Bank Ltd. in 1937. Introduction of the Company Act in 1964, the first issuance of Government Bond in 1964 and the establishment of Securities Exchange Center Ltd. in 1976 were other significant development relating to capital markets.
Securities Exchange Center was established with an objective of facilitating and promoting the growth of capital markets. Before conversion into stock exchange it was the only capital markets institution undertaking the job of brokering, underwriting, managing public issue, market making for government bonds and other financial services. Nepal Government, under a program initiated to reform capital markets converted Securities Exchange Center into Nepal Stock Exchange in 1993.
Members
Members of NEPSE are permitted to act as intermediaries in buying and selling of government bonds and listed corporate securities. At present, there are 23 member brokers and 2 market makers, who operate on the trading floor as per the Securities Exchange Act, 1983, rules and bye-laws.
Besides this, NEPSE has also granted membership to issue and sales manager securities trader (Dealer). Issue and sales manager works as manager to the issue and underwriter for public issue of securities whereas securities trader (Dealer) works as individual portfolio manager.
At present there are 11 sales and issue manager and 2 dealers (Secondary market). Click here to get information of NEPSE members.
The tenure of the membership is one year. The license should be renewed within 3 months after the closure of the fiscal year. If not, it can be done within another three months by paying 25% penalty.
Trading
NEPSE the only Stock Exchange in Nepal introduced fully automated screen based trading since 24th August, 2007.
The NEPSE trading system is called ‘NEPSE Automated Trading System ‘(NATS) is a fully automated screen based trading system, which adopts the principle of an order driven market.
Market Timings
Trading on equities takes place on all days of week (except Saturdays and holidays declared by exchange in advance). On Friday only odd lot trading is done.
The market timings of the equities are:-
Market Open: - 12:00 Hours
Market Close: - 15:00 Hours
Odd Lot Trading is done on Fridays. For Odd Lot Trading Market Timings are
Market Open: - 12:00 Hours
Market Close: - 13:00 Hours
Note:- The exchange may however close the market on days other than schedule holidays or may open the market on days originally declared as holidays. The exchange may also extend, advance or reduce trading hours when it deems fit necessary.
Trading Holidays for Calendar year (2065/66) i.e 2009-04-14 to 2010-03-24
Securities Available for Trading
NEPSE facilitates trading in the following instruments
A. Shares
• Equity Shares
• Preference Shares
B. Debentures
C. Government Bonds
D. Mutual Funds
Circuit Breakers
NEPSE has implemented index-based circuit breakers with effect from 2064/6/4 (21 September 2007). In addition to the circuit breakers, price range is also applicable on individual securities.
Index-based Circuit Breakers
The index-based circuit breaker system applies at 3 stages of the NEPSE index movement of 3%, 4% and 5%, . These circuit breakers when triggered bring about a trading halt in all equity.
• In case of 3% movement either way, there would be a market halt for 15 minutes if the movement takes place during first hour of trading i.e. 13:00 hours. In case this movement takes after 13:00 hours there will be no trading halt at this level and market shall continue trading.
• In case of 4% movement either way, there would be a market halt for half an hour if the movement takes place before 14:00 hours. In case this movement takes after 14:00 hours there will be no trading halt at this level and market shall continue trading.
• In case of 5% movement in either way, trading shall be halted for the remainder of the day.
Price Range
Price Range is applicable on individual securities. The trading of the individual securities are not halted but allowed to trade within the price range.
• The price band is 10% of previous close on either way. *
* During the ATO session the range is 5% on either way of Previous Close Price. After the band is 2% on either way of the Last traded price till it reaches to 10% of the previous close.
Trading Location
The trading can be done either from NEPSE’s trading floor or from the broker’s office. NEPSE uses sophisticated technology through brokers can trade remotely from their office located inside the Kathmandu valley. This remote trading facility was started from 1 November 2007.
Trading System
NEPSE operates on the ‘NEPSE Automated Trading System ‘(NATS), a fully screen based automated trading system, which adopts the principle of an order driven market.
Order Matching Rules
The system adopts principle of order driven market. The best buy order is matched with the best sell order. An order may match partially with another order producing multiple trades. For order matching the best buy order is the one with the highest price and the best sell order is the one with the lowest price. This is because the system views all buy orders available from the point of view of the sellers and all sell orders from the point of view of the buyers in the market. So, of all buy orders available in the market at any point of time, a seller would obviously like to sell at the highest possible buy price that is offered. Hence, the best buy order is the order with the highest price and the best sell order is the order with the lowest price.
Settlement
NEPSE has adopted a T+3 settlement system. Settlement will be carried out on the basis of paper verses payment. The trading is done at "T" and at T+1; the buying brokers have to submit bank vouchers for settlement with covering letter. At T+2, the selling brokers must submit share certificate with covering letter. At T+3, NEPSE prepares billing for payment and this will be forwarded to the bank.
Once the settlement is done the buying brokers with the consultation of the clients must decide and present the purchased shares if they want to record it as blank transfer. This must be completed within T+5.
Blank Transfer
Under this mechanism an opportunities to derive the market benefit is provided. But presently, the buying brokers must complete the BT process within T+5. The transactions that are executed can be recorded in different way and NEPSE has considered all possible retention. The followings are the major key points to be considered.
1. This is related only with buy of the securities.
2. The buyer may decide to have market benefit either to have capital gains or to minimize the loss.
3. In order to do this s/he may partly send for name transfer or may register it in blank transfer.
4. If s/he register total purchase in blank transfer and can put for sale and if only the part of the shares are subscribed then s/he can handover the part and the part can be forwarded for name transfer to the concerned company. In order to do this s/he has to cancel the blank transfer for that portion.
Brokerage
1. Brokerage for equity
S.No. Trading Amount Brokerage %
A Up to 50,000 1
B > 50,000 & < 5,00,000 0.9
C > 5,00,000 & < 10,00,000 0.8
D > 10,00,000 0.7
2. Brokerage for Government Bond
S.No. Trading Amount Brokerage %
A Up to 5,00,000 0.20
B > 5,00,000 & < 50,00,000 0.10
C > 50,00,000 0.05
3. Brokerage for all other stocks which is not listed in 1 and 2.
S.No. Trading Amount Brokerage %
A Up to 50,000 0.75
B > 50,000 & < 50,00,000 0.60
C > 50,00,000 0.40
Source: Nepal Stock Exchange
Nepal Stock Exchange, in short NEPSE, is established under the company act, operating under Securities Exchange Act, 1983.
The basic objective of NEPSE is to impart free marketability and liquidity to the government and corporate securities by facilitating transactions in its trading floor through member, market intermediaries, such as broker, market makers etc. NEPSE opened its trading floor on 13th January 1994.
Government of Nepal, Nepal Rastra Bank, Nepal Industrial Development corporation and members are the shareholders of NEPSE.
History
The history of securities market began with the floatation of shares by Biratnagar Jute Mills Ltd. and Nepal Bank Ltd. in 1937. Introduction of the Company Act in 1964, the first issuance of Government Bond in 1964 and the establishment of Securities Exchange Center Ltd. in 1976 were other significant development relating to capital markets.
Securities Exchange Center was established with an objective of facilitating and promoting the growth of capital markets. Before conversion into stock exchange it was the only capital markets institution undertaking the job of brokering, underwriting, managing public issue, market making for government bonds and other financial services. Nepal Government, under a program initiated to reform capital markets converted Securities Exchange Center into Nepal Stock Exchange in 1993.
Members
Members of NEPSE are permitted to act as intermediaries in buying and selling of government bonds and listed corporate securities. At present, there are 23 member brokers and 2 market makers, who operate on the trading floor as per the Securities Exchange Act, 1983, rules and bye-laws.
Besides this, NEPSE has also granted membership to issue and sales manager securities trader (Dealer). Issue and sales manager works as manager to the issue and underwriter for public issue of securities whereas securities trader (Dealer) works as individual portfolio manager.
At present there are 11 sales and issue manager and 2 dealers (Secondary market). Click here to get information of NEPSE members.
The tenure of the membership is one year. The license should be renewed within 3 months after the closure of the fiscal year. If not, it can be done within another three months by paying 25% penalty.
Trading
NEPSE the only Stock Exchange in Nepal introduced fully automated screen based trading since 24th August, 2007.
The NEPSE trading system is called ‘NEPSE Automated Trading System ‘(NATS) is a fully automated screen based trading system, which adopts the principle of an order driven market.
Market Timings
Trading on equities takes place on all days of week (except Saturdays and holidays declared by exchange in advance). On Friday only odd lot trading is done.
The market timings of the equities are:-
Market Open: - 12:00 Hours
Market Close: - 15:00 Hours
Odd Lot Trading is done on Fridays. For Odd Lot Trading Market Timings are
Market Open: - 12:00 Hours
Market Close: - 13:00 Hours
Note:- The exchange may however close the market on days other than schedule holidays or may open the market on days originally declared as holidays. The exchange may also extend, advance or reduce trading hours when it deems fit necessary.
Trading Holidays for Calendar year (2065/66) i.e 2009-04-14 to 2010-03-24
Securities Available for Trading
NEPSE facilitates trading in the following instruments
A. Shares
• Equity Shares
• Preference Shares
B. Debentures
C. Government Bonds
D. Mutual Funds
Circuit Breakers
NEPSE has implemented index-based circuit breakers with effect from 2064/6/4 (21 September 2007). In addition to the circuit breakers, price range is also applicable on individual securities.
Index-based Circuit Breakers
The index-based circuit breaker system applies at 3 stages of the NEPSE index movement of 3%, 4% and 5%, . These circuit breakers when triggered bring about a trading halt in all equity.
• In case of 3% movement either way, there would be a market halt for 15 minutes if the movement takes place during first hour of trading i.e. 13:00 hours. In case this movement takes after 13:00 hours there will be no trading halt at this level and market shall continue trading.
• In case of 4% movement either way, there would be a market halt for half an hour if the movement takes place before 14:00 hours. In case this movement takes after 14:00 hours there will be no trading halt at this level and market shall continue trading.
• In case of 5% movement in either way, trading shall be halted for the remainder of the day.
Price Range
Price Range is applicable on individual securities. The trading of the individual securities are not halted but allowed to trade within the price range.
• The price band is 10% of previous close on either way. *
* During the ATO session the range is 5% on either way of Previous Close Price. After the band is 2% on either way of the Last traded price till it reaches to 10% of the previous close.
Trading Location
The trading can be done either from NEPSE’s trading floor or from the broker’s office. NEPSE uses sophisticated technology through brokers can trade remotely from their office located inside the Kathmandu valley. This remote trading facility was started from 1 November 2007.
Trading System
NEPSE operates on the ‘NEPSE Automated Trading System ‘(NATS), a fully screen based automated trading system, which adopts the principle of an order driven market.
Order Matching Rules
The system adopts principle of order driven market. The best buy order is matched with the best sell order. An order may match partially with another order producing multiple trades. For order matching the best buy order is the one with the highest price and the best sell order is the one with the lowest price. This is because the system views all buy orders available from the point of view of the sellers and all sell orders from the point of view of the buyers in the market. So, of all buy orders available in the market at any point of time, a seller would obviously like to sell at the highest possible buy price that is offered. Hence, the best buy order is the order with the highest price and the best sell order is the order with the lowest price.
Settlement
NEPSE has adopted a T+3 settlement system. Settlement will be carried out on the basis of paper verses payment. The trading is done at "T" and at T+1; the buying brokers have to submit bank vouchers for settlement with covering letter. At T+2, the selling brokers must submit share certificate with covering letter. At T+3, NEPSE prepares billing for payment and this will be forwarded to the bank.
Once the settlement is done the buying brokers with the consultation of the clients must decide and present the purchased shares if they want to record it as blank transfer. This must be completed within T+5.
Blank Transfer
Under this mechanism an opportunities to derive the market benefit is provided. But presently, the buying brokers must complete the BT process within T+5. The transactions that are executed can be recorded in different way and NEPSE has considered all possible retention. The followings are the major key points to be considered.
1. This is related only with buy of the securities.
2. The buyer may decide to have market benefit either to have capital gains or to minimize the loss.
3. In order to do this s/he may partly send for name transfer or may register it in blank transfer.
4. If s/he register total purchase in blank transfer and can put for sale and if only the part of the shares are subscribed then s/he can handover the part and the part can be forwarded for name transfer to the concerned company. In order to do this s/he has to cancel the blank transfer for that portion.
Brokerage
1. Brokerage for equity
S.No. Trading Amount Brokerage %
A Up to 50,000 1
B > 50,000 & < 5,00,000 0.9
C > 5,00,000 & < 10,00,000 0.8
D > 10,00,000 0.7
2. Brokerage for Government Bond
S.No. Trading Amount Brokerage %
A Up to 5,00,000 0.20
B > 5,00,000 & < 50,00,000 0.10
C > 50,00,000 0.05
3. Brokerage for all other stocks which is not listed in 1 and 2.
S.No. Trading Amount Brokerage %
A Up to 50,000 0.75
B > 50,000 & < 50,00,000 0.60
C > 50,00,000 0.40
Source: Nepal Stock Exchange
Subscribe to:
Posts (Atom)
Posts
