Even though most of the business houses have resumed normal operation and government offices are gradually opening, Nepal Stock Exchange (Nepse) is still undecided about resuming operation of the country’s only stock market.
Officials of Nepse told Republica that it has suspended trading until further notice as the building of Central Depository System and Clearing Ltd (CDSCL) has been damaged by last Saturday’s earthquake.
“Trading has been closed until further notice. The building of the CDSCL, which handles clearing and settlement of trading, has been damaged by the earthquake. As trading is incomplete without clearing and settlement, we cannot resume trading immediately,” Sitaram Thapaliya, general manager of Nepse, told Republica. “Stock market will resume once the CDSCL building is repaired and all other stakeholders of the market like brokerage firms, Registrar of Shares (RTs) and investors are prepared for the trading.”
The marked had last opened for trading on April 23. It had closed at 938.19 points then.
Meanwhile, Nepal Investors Forum (NIF) — a lobby group of investors — has also advised Nepse to suspend trading for at least a month until the situation becomes normal. “Investors are on a tragic mood. Since stock market is not an essential business, we have advised Nepse to halt trading for a month,” Raj Kumar Timilsina, president of NIF, told Republica. “This is the time to mourn and lend helping hands to those who are hit by the quake. Many investors are not in mood of trading.”
Similarly, stock brokers also say they lack manpower to reopen their brokerage firms. “Most of our staff members have returned to their respective villages following the earthquake. Also, CDSCL, RTs and bank and financial institutions, depository participants have not started their full-fledged service yet,” Priya Raj Regmi, president of Stock Brokers Association of Nepal (SBAN), said. “We can offer our services once all the mechanisms of trading are active.”
Following the tragedy, many analysts believe that the market may observe downfall once it is opened. “Profit and business of bank and financial institutions, insurance companies and all other companies will be hit hard due to the earthquake. The overall economy of the country is also going to be affected. The confidence of the investors will also be weak. These all will be reflected on Nepse,” a stock broker told Republica, requesting anonymity.