Nepal Stock Exchange (Nepse) has fixed the threshold price for transaction of promoters´ share of insurance companies.
Nepse on Monday notified all the listed life and non-life insurance companies about the decision, saying that it would control possible evasion of capital gains tax (CGT) while trading promoter´s shares.
According to the notice, minimum trading price shares of companies with positive net worth has been set at five times of book value, or 50 percent of the trading price of ordinary shares of weighted average price of the previous day, whichever is the lowest.
Likewise, for the companies with negative net worth, minimum price has been set at 50 percent of average market price of past 180 days, or 50 percent price of transaction of the same day, whichever is the lowest.
The new notice has come at a time when trading of promoters share has gained momentum in recent months, leading to rise in prices of ordinary shares of these companies.
Eight life insurance and 14 non-life insurance companies have been listed in Nepse.