“Conversion of 19 percent promoter shares will double the supply of stock. It would force the market to lose another 200 points. This must be avoided,” said Tanka Paneru, Nepse chairman.
Briefing lawmakers at the Parliamentary Finance and Labor Relations Committee, Paneru argued that a tight marginal lending policy, the inflation-shrunk savings of small investors, other market dynamics and liquidity crunch have already forced the market to correct.
“The market has already corrected to 540 points from some 1,200 points of two years ago. We need not implement another correction measure that we worked out during the overheated era,” Paneru stated.
Lawmakers at the committee were divided over the issue. Dr Ram Sharan Mahat, a lawmaker, stood in favor of NRB´s directives, saying these will free the promoters´ locked-up money and foster entrepreneurship.
Dr Tilak Rawal, another lawmaker, opposed it, saying that it will squeeze the market further, spark distress selling and crash Nepse, sending an adverse wave throughout the economy.
Because of differences among lawmakers, the committee failed to give its decision over the case.
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