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Technology First Condition for Extending Share Transaction Period: Stakeholders

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Technology First Condition for Extending Share Transaction Period: Stakeholders
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July 10: Nepal Stock Exchange (NEPSE) has asked for suggestions from stakeholders regarding extension of share transaction period. In the present context, when transaction load and market is at the highest level, general investors are also of the view of extending share transaction period. Most of the worldwide stock exchanges open for 6-8 hours for stock transactions whereas NEPSE opens for only three hours.

Taking into account the number of companies engaged and the market size, the three hours of transaction period for small stock market like NEPSE is not short. However, during the current bull period, the transaction period apparently feels short. Due to the shortage of time, many transactions could not get finalised in NEPSE. Yet, Nepali stock market being volatile in nature, some investors opined of continuing the same period.

NEPSE, however, has no alternative besides extending share transaction period in order to manage increased number of investors and their trading orders. Although extension of share transaction period is a positive move to take, NEPSE should take few preparations prior to this including adapting advance technology as suggested by many.

“As per the rumour, number of clearing banks will not be raised. It can create problem for clearing share transaction money,” said Amrit Nath Regmi, analyst and share investor. Securities Board of Nepal (SEBON) and NEPSE are in dispute over the issue. If the number of clearing banks is not raised, many expect additional problems with additional transaction that comes with time in future. “It should also be considered that how much pressure NEPSE software can handle,” added Regmi.

According to share investor and Analyst Rabindra Bhattarai and broker Ishwari Rimal, NEPSE should provide online trading facility. “The increased period will not be effective with stale technology. Online share trading will increase market accessibility for share investors,” said Bhattarai.

Similarly, Rimal opined that online trading should be mechanised as there is only limited terminal for brokers at present. “Presently, share trading can be conducted through nearly 120 terminals. Lack of terminals has barred brokers to enter additional districts. The simple initiative for it is to mechanise online trading,” he said. “Online share trading will facilitate investors of trading shares themselves which will eliminate problems related with terminal and lack of manpower in broker companies.”

Similarly, stakeholders have also suggested analysing capacity of CDS and Clearing Ltd. Likewise, many brokers suggested of providing facilities of margin lending and netting.

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