The current bull market seems to have caught the fancy of investors outside the Capital, as trading outside Kathmandu accounted for one-tenth of the total trading undertaken in the past six months.
Among 52 brokers, remote workstations of eight brokerage firms stationed outside the capital have undertaken transactions worth Rs 3.15 billion since the beginning of the fiscal year, according to Nepal Stock Exchange (Nepse) data. In the period, from mid-July, 2013 to mid-January, the stock exchange had seen total trading of Rs 20.27 billion.
At present, there are eight brokers that are offering trading services from Dharan, Narayanghat, Pokhara, Biratnagar, Birgunj and Butwal.
“Earlier, we were running remote workstations outside the Valley at a loss, but lately the trading volume has surged following the market rally,” pointed out managing director of Thrive Brokerage Anjan Raj Paudyal. The brokerage firm is also working from it remote workstation in Pokhara. “Now the remote workstation is at breakeven,” added Poudyal.
Since November, the stock index has surged by more than 45 per cent since the beginning of the fiscal year, and the transaction volume at the stock exchange has also more than tripled during the period. The average daily turnover of the stock exchange stands at Rs 215 million. Last year, the market witnessed daily transaction of Rs 45 million during this period.
Each remote workstation has direct access to Nepse’s trading system through their own window. They do not need to get through the main office of the brokers to place and execute orders on behalf of their clients.
Although participation of the traders outside the Capital in the stock transaction is growing, the clearing and settlement of the transaction undertaken by the remote workstation is still a bit difficult.
“The clearing and settlement of any transaction can only be completed after verifying the signature of the shareholder that is in the share certificate, and the verification is carried out by the share registrars who are located in Valley,” said Poudyal.
The firms have to courier the original share certificates to their main offices that get the signatures verified by the share registrars before settlement and clearance of the traded shares can be completed.
“Sometimes couriers misplace or lose the certificates en route and it takes almost a month for settlement,” said Poudyal.
However, the troubles regarding the transfer of physical share certificates for settlement and clearance will be over once CDS and Clearing Ltd (CDSC) starts its fully automated system.
“If CDSC starts its fully automated clearing and settlement of dematerialised shares, we can expect larger participation from traders outside the Valley,” pointed out general manager and CEO of Nepse Sitaram Thapaliya.
CDSC — the only central depository in existence in the country — is undertaking manual clearing and settlement of the shares traded. However, once it begins full operation, the share settlement can be carried out in a few minutes. The shares in the sellers’ demat account will be transferred to the buyers’ account in a matter of seconds, once the cash transaction is undertaken, without requiring any movement of share certificates.
source: the himalayan times,22 jan 2014
LINK
Among 52 brokers, remote workstations of eight brokerage firms stationed outside the capital have undertaken transactions worth Rs 3.15 billion since the beginning of the fiscal year, according to Nepal Stock Exchange (Nepse) data. In the period, from mid-July, 2013 to mid-January, the stock exchange had seen total trading of Rs 20.27 billion.
At present, there are eight brokers that are offering trading services from Dharan, Narayanghat, Pokhara, Biratnagar, Birgunj and Butwal.
“Earlier, we were running remote workstations outside the Valley at a loss, but lately the trading volume has surged following the market rally,” pointed out managing director of Thrive Brokerage Anjan Raj Paudyal. The brokerage firm is also working from it remote workstation in Pokhara. “Now the remote workstation is at breakeven,” added Poudyal.
Since November, the stock index has surged by more than 45 per cent since the beginning of the fiscal year, and the transaction volume at the stock exchange has also more than tripled during the period. The average daily turnover of the stock exchange stands at Rs 215 million. Last year, the market witnessed daily transaction of Rs 45 million during this period.
Each remote workstation has direct access to Nepse’s trading system through their own window. They do not need to get through the main office of the brokers to place and execute orders on behalf of their clients.
Although participation of the traders outside the Capital in the stock transaction is growing, the clearing and settlement of the transaction undertaken by the remote workstation is still a bit difficult.
“The clearing and settlement of any transaction can only be completed after verifying the signature of the shareholder that is in the share certificate, and the verification is carried out by the share registrars who are located in Valley,” said Poudyal.
The firms have to courier the original share certificates to their main offices that get the signatures verified by the share registrars before settlement and clearance of the traded shares can be completed.
“Sometimes couriers misplace or lose the certificates en route and it takes almost a month for settlement,” said Poudyal.
However, the troubles regarding the transfer of physical share certificates for settlement and clearance will be over once CDS and Clearing Ltd (CDSC) starts its fully automated system.
“If CDSC starts its fully automated clearing and settlement of dematerialised shares, we can expect larger participation from traders outside the Valley,” pointed out general manager and CEO of Nepse Sitaram Thapaliya.
CDSC — the only central depository in existence in the country — is undertaking manual clearing and settlement of the shares traded. However, once it begins full operation, the share settlement can be carried out in a few minutes. The shares in the sellers’ demat account will be transferred to the buyers’ account in a matter of seconds, once the cash transaction is undertaken, without requiring any movement of share certificates.
source: the himalayan times,22 jan 2014
LINK
Comments
Post a Comment