Finance Minister Janardan Sharma on Wednesday acknowledged that there are manipulations taking place at the secondary market that have impacted the daily transactions of stocks.
Speaking at a program organized at the Ministry of Finance (MoF), Minister Sharma said the anomalies like insider trading, pump-and-dump and circular trading have been flourishing in the country’s only stock exchange market. “Such faulty trading in the stock market cannot be tolerated,” he added.
In recent days, the market has been witnessing erratic fluctuations at Nepal Stock Exchange (Nepse). A few months ago, the then chiefs of Nepse and the Securities Board of Nepal (Sebon) were compelled to step down from their positions after they were found involved in insider trading.
Minister Sharma, during the program, directed the newly appointed Nepse CEO Krishna Bahadur Karki and Sebon Chairman Ramesh Hamal to take necessary steps to increase participation of small investors and their safety in the secondary market. Sharma stressed the need for mobilizing more capital necessary for big projects through the share market, implementing a book-building system and permitting stockbrokers for margin lending.
Establishing good coordination between Nepse and Sebon, promoting more companies to list their shares, improving the capacity of stockbrokers and enhancing capacity of the existing online trading system and increasing the number of services via the platform were among the concerns of Sharma.
Meanwhile, Sebon Chairman Hamal said there is a need for introducing a big market maker in the stock exchange market to maintain stability in the segment. According to him, the regulator will promote financial literacy programs to check rumor-based trading in the secondary market.