New Stock Exchange to exploit public, SEBON reform a priority: RPP’s Shahi

Rastriya Prajatantra Party (RPP) chief whip Gyanendra Shahi has expressed his opposition to the immediate opening of a new stock exchange in the private sector, claiming it to be a ploy to exploit the public further. During a recent session of the parliamentary Finance Committee, Shahi contended that rather than venturing into the establishment of a second stock exchange, the focus should be on enhancing the quality and efficiency of the existing Securities Board of Nepal (SEBON).

Shahi highlighted the persisting issues and distortions within the current capital market, asserting that without reinforcing the existing regulatory mechanisms and market structure, there is no valid reason for the introduction of a new exchange. He argued that such a move would primarily benefit a select few powerful groups while exposing ordinary investors to heightened risks.

Moreover, Shahi underscored the prevalent lack of transparency, market manipulation, and inadequate regulation within Nepal’s capital market, emphasizing that these concerns must be addressed before contemplating the creation of another stock exchange. Reflecting on past irregularities in the capital market, he stressed the imperative need to prioritize the enhancement of SEBON’s capabilities.

The debate surrounding the necessity of a second stock exchange in Nepal has been ongoing for an extended period, with both the government and private sectors displaying keen interest in its establishment. Supporters of a new exchange contend that it could potentially disrupt the monopoly held by NEPSE, foster competition, enhance transparency, and facilitate the adoption of contemporary technologies.

Despite these arguments, Shahi and other detractors maintain that introducing a second stock exchange at the present juncture, given the limited breadth and scale of Nepal’s capital market, could result in market fragmentation and diminish overall investment opportunities. The concerns raised by Shahi highlight the complex considerations and risks associated with pursuing the establishment of a new stock exchange in Nepal.