Unrest paralyzes stock trade

By R.K.Regmee

The agitation mode of pressing authority for action got fully underway in the past week in the premises of Nepal Stock Exchange paralyzing trading for three days. If the officials concerned do not respond to it properly and to the satisfaction of protestors, the strike might continue this week as well.

NEPSE employees want full implementation of the agreement concluded between NEPSE and employees' union in the past. Unless this is done, they are in no mood to discontinue stoppage in the secondary market. They specifically demand that stock exchange allowance be augmented and the series of by-laws related to the regulatory body and its staff be updated through proper amendment.

Officials particularly Finance Ministry first ignored the grievances and later evaded the issue as "unfeasible." Employees, therefore, resorted to action from mid-January climaxing into past week's halt of trading.

Political protests in financially sensitive zone appear highly unpalatable to many investors. It also produces negative impact on investment climate through complicating instability. The government, observers emphasize,
should now take initiative to talk to protestors and tackle problems through dialogue without disrupting stock business in NEPSE floor.

Although considered as uncommon in investors' arena, the democratic form of protest featured prominently in NEPSE twice in 2010. Current picketing which could be termed the spill-over of the same trend follows week-long strike in stock market for a week around May 2010 due to Maoist nationwide stoppage. The General Investors' Association of Nepal had protested in February last year discontinuing trade for a week.

Nepal's share market, although not big in size, is crucial for feeling the pulse of investment and economic climate in the country. Some 1.5 million people participate in it in one way or the other engaging in sale or purchase of shares. They along with heavy investors are worried over the instability in NEPSE because of employees' agitation.

Analysts are in the meanwhile worried over the adverse impact of in-house protest on stock trade that has already been victimized by factors such as continued political instability and high bank rates.

Two-day trading

The first two trading days in the past week was not a disappointment for NEPSE which looked comfortable with a growth of 3.44 points. Sub-indices of four groups including hydropower, commercial banks and finance companies were instrumental in boosting the gain of the market during the period.

Recording a turnover of 40.82 million rupees through business of 159,743 shares in 2,501 deals, NEPSE closed in the past week at 410.34 points, some 0.84 % gain over previous week's index of 406.9. nepalnews.com Jan 30 2011.