New stock exchange company in pipeline

KATHMANDU, March 24: Two private companies that had sought permission from the Securities Exchange Board of Nepal (SEBON) for registering new stock exchanges have in principle agreed to merge after SEBON hinted it would grant permission to one company only. [break]



Promoters associated with financial institutions including Kist Banking and Finance Company and Global Bank had applied at SEBON for establishing the Kathmandu Stock Exchange. Likewise, another group led by Ram Babu Panta and Num Nath Paudel - former senior bankers - had sought permission for another private stock exchange, the National Stock Exchange.



As per the existing rules, a firm seeking to register at the company registrar’s office as a stock exchange company has to get the nod from SEBON - the capital market regulator of the country.



Nepal Stock Exchange (NEPSE) is now the sole stock market in the country.



“We (two aspirant companies) have in principle agreed to form a single company under the name of Kathmandu Stock Exchange,” Kamal Gyawali, chief executive officer of Kist Banking and Finance Company, told my republica.com.



Gyawali said about 20 financial institutions including Kist Banking and Finance, International Money Exchange, Global Bank, ICFC Finance Company, Prudential Insurance, Surya Life Insurance, Bank of Asia and Standard Chartered Bank have become associated with the company.



“We will raise the number of institutions to at least 25 as we have opened the doors for new companies as well to invest in our company,” added Gyawali.



The company’s paid up capital has been fixed at Rs 200 million. He also claimed that the new company will provide modern technologies including online trading and a Central Depository System (CDS) to upgrade the standard of stock trading in the country.



“We are going to invest Rs 50 million on software to facilitate an advanced trading system,” he said.



A source at SEBON said the stock regulator was not going to give permission to more than one new stock exchange company, given the small capital market in the country.



“We will give an operating license to the company after assessing its capital, manpower and qualifications, among other things, once it gets registered at the company registrar’s office", said the source.

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