Kathmandu: Nepal Chamber of Commerce President Kamalesh Kumar Agrawal has called for the country’s capital market to be developed beyond share and securities trading and transformed into a major source of long-term capital for production, infrastructure, employment and economic growth.
Addressing a program in Kathmandu, Agrawal said Nepal needs to gradually shift its economy from bank-based financing to market-based financing.
He emphasized that the capital market can play a meaningful role in Nepal’s economic transformation only when the private sector has easier access to long-term capital for expanding production and creating employment.
Agrawal also said the lack of forward-looking policies in the past had allowed speculative activities to gain prominence in Nepal’s share market. He particularly pointed to the double ISIN system for shares of banks and financial institutions, saying it created significant differences in the prices of identical shares.
“Although the shares are the same and provide the same returns, double pricing created differences of up to 50 percent in their market values,” Agrawal said. He noted that the system created confusion and distrust among investors while making it difficult to determine the actual market value of shares.
He said previous efforts by Nepal Rastra Bank to remove the double ISIN system could not be implemented because of concerns over its direct impact on ordinary investors.
Referring to former Prime Minister Dr. Baburam Bhattarai’s remarks that Nepal’s capital market should not be turned into a “gambling house,” Agrawal argued that a single share should not have different values due to policy interventions, separating genuine investment value from speculative pricing.
He welcomed the preparation by the Securities Board of Nepal (SEBON) to introduce a policy based on a single ISIN number, saying the move could help build a healthier, more transparent and fundamentally driven capital market.
