Nepal Stock Exchange goes fully online today

July 17, 2018

Rajesh Khanal, The Kathmandu Post, 17 July 2018

The Nepal Stock Exchange (Nepse) will go fully online on Tuesday. The country’s sole bourse said the Nepse Online Trading System (NOTS) and the existing Computerised Trading System would both become operational.

Stockbrokers who have installed the Trade Management System can allow their clients to use NOTS, said Nepse spokesperson Murahari Parajuli.

“Investors can obtain their user ID and password from their concerned brokers when updating their Know Your Customer,” Parajuli said. Currently, investors can only observe the status of their trading but not post sale and purchase orders.

Nepse said in a press release that it had selected an Indian company to conduct user acceptance testing (UAT) for third party approval of the newly developed software to implement the NOTS. “The UAT will assess the technical specifications and system requirements specifications as stated in the bid document. It will also provide ISO certification to the new system following the assessment.”

Nepse is launching a fully automated system when a bearish trend prevails in the stock market. During the period mid-July 2017 and mid-July 2018, investors lost Rs421.69 billion following a slump in demand for stocks. The share market entered a slump due to an increased supply of shares and a fall in demand triggered by uncertainty following the elections to the three tiers of government and the landslide victory of the leftist alliance.

According to Nepse, market capitalisation on the last day of the fiscal year 2016-17 stood at Rs1,856.82 billion. On Monday, the last day of fiscal 2017-18, the market value of listed shares had shrunk to Rs1,435.13 billion.

The Nepse index plunged 370.13 points to close at 1,212.36 points during the period. The index hit a high of 1,667.92 points on August 7 before going into free fall and reaching a 26-month low of 1,168.62 points on March 26.

The market did not stir despite Nepse’s announcement that a fully automated online trading system would be launched on the first day of the new fiscal year 2018-19.

“Nepse’s preparations to start online trading failed to attract investors as they feared the government would launch stringent policies to promote the share market,” said a stockbroker who asked not to be named.

“Investors were further disappointed by the government budget and the recently issued monetary policy which, according to investors, failed to address their concerns.”

During the review period, the commercial banks index that dominates the stock market plummeted 395.25 points to close at 1,023.56 points. Similarly, the insurance group that has the largest face value plunged 2,150.84 points to close at 6,199.45 points.