KATHMANDU, May 10: Though most of the business and trading houses of have resumed normal business after the earthquake, Nepal Stock Exchange (Nepse) -- the only stock exchange in the country -- is resuming trading from coming Sunday only.
Nepse officials say they have decided to open the bourse for trading from May 17 as the tragic-stricken country is slowly heading toward normalcy.
The market, which had remained closed on April 23 -- the last trading day of third week of April, could not open on April 26 next week due to the earthquake of April 25 that shook the entire nation. Following the earthquake, Nepse had suspended trading until further notice.
The Nepse decision means the stock market will remain closed for three weeks in total due to the quake.
"We have decided to resume trading from next Sunday to help normalize the economic and business activities of the country following the devastating quake. The stock market's duty is to provide liquidity to investors who earn money by selling off their shares," Sitaram Thapaliya, general manager of Nepse, told Republica.
Though almost all other businesses had resumed operation less than a week after the earthquake, the stock market, which is considered the mirror of national economy, had suspended trading for an indefinite period, citing physical damage in the building of Central Depository System and Clearing Ltd (CDSCL) and some brokerage firms.
CDSCL is the fully-owned subsidiary of Nepse which is responsible for clearance and settlement of share transactions.
Sources say Nepse was compelled to halt trading due to pressure from some big investors who feared their share values will fall significantly in the post-quake trading.
Many investors warn closure of stock market for such a long period of time during such crisis could erode the credibility of stock market in the long run. "Are they (Nepse and brokerage firms) the judges to determine the right time or wrong time of market? Why only the brokers? Why didn't banks, insurance companies, courts, and media outlets halt operation after the earthquake?" an investor wondered in a Facebook page of investors.
Meanwhile, CDSCL resumed clearing and settlement of transactions from Sunday.
Source: Republica
