At present, Nepal's stock market looks like a guardian. Bodies that need to control market distortions and inconsistencies are silent. Due to this, indiscipline has increased in the market. At present, the Nepse index has reached its highest point. The transaction amount has also increased. Millions of new enthusiastic investors entering the market have added enthusiasm to the market.
With the advent of the new wave, the main responsibility of the regulatory body is to maintain discipline in the market for the long-term development of the market. But who will protect the investor's investment when the regulatory body itself becomes the target of distortions and anomalies in the market? Who will take the guardianship of investors?
Due to the recent activities, investors are not able to invest in stocks with confidence. The general investors are beginning to feel that the market has fallen into the clutches of a limited number of people. Only those who have access to information can make money. Which is a matter of concern for market development in the long run.
Last Monday, the demand for shares of Ajod Insurance Company suddenly increased in the market. Since then, there has been a continuous circuit break in prices. In order for the demand and price of a company's shares to rise so suddenly, there must be some positive news about the company in general. No news or information about the company was released that day.
But on Tuesday, information about the issue of 50 percent of the company's shares was taken out through the media. The significant increase in the demand and price of the company's shares on Monday and the company's proposal to issue 50 percent of its shares on Tuesday is not a coincidence like the tiger's cry and the loss of a goat.
The fact that there is a possibility of insider trading in the company's shares cannot be ruled out as the price of the company rose on Monday along with the demand for the company's shares and the news of the company's rightful eviction came out on Tuesday. Another thing is that out of the shares of the company that were traded on Monday, 25 percent of the shares were traded by only one broker company. The average investor's eyes do not seem ready to see this as a coincidence.
Various groups of investors and investors have already filed a petition with the Securities and Exchange Board of Nepal (SEB) alleging insider trading in the shares of Ajod Insurance. However, to date, the board does not appear to have carried out any study or research process.
This is not the first case of insider trading in Nepal's stock market. Complaints of insider trading have been seen coming out at different times in the past as well. Investors are of the view that insider trading is on the rise as the concerned bodies remain silent and fail to take action against the perpetrators of such crimes.
Similarly, Kisan Microfinance Company had published a notice in the media on April 22 stating that it would take the proposal of 100 percent rightful eviction to the general assembly. But on Monday the company published an amended notice removing the rightful offer.
The company's share price rose 9.97 percent, or Rs 157, to Rs 1,731 per share on Sunday after the company called a general meeting with a rightful eviction proposal. As soon as the company withdrew its rights offer, investors who bought shares at high prices in the hope of acquiring rights were hit.
At the same time, Nepse had asked the company for clarification. In response to the explanation sought by Nepse, the company said that the general meeting should be convened 21 days before the general meeting. The company had mentioned that the information published for the second time would be official.
After the company's clarification, Nepse has canceled the company's share trading, warning not to repeat such acts in the coming days. What action has been taken against the company here? Does the loss to the company or to the investor occur when the company's secondary market is blocked? Mistakes made by the company, and the punishment to be borne by the investor? What kind of justice system is this?
Investors also buy shares at a high price in the hope of getting the right shares of the company. And investors also suffer from the stabilization of capital when share trading is halted. Who is responsible for the losses incurred by the investors due to the negligence of the company? Company, Nepse or Securities Board?
Now, if regulators are to truly work for the benefit of investors, the system of punishing investors for their mistakes must end. If for some reason the management of the company causes loss to the investor, such compensation will not be repeated by the management of the company only if the management of the company can make legal arrangements to bear such compensation. Otherwise, Nepse will ask for an explanation to stop the transaction and after the company gives an explanation, the process of dissolving the transaction will continue for a long time. The above incidents are only representative of the distortions seen in Nepal's stock market.
It is as clear as the sun that the concerned bodies have not been able to control and regulate the distortions in Nepal's stock market. Therefore, for the development of the stock market, it is necessary for the regulatory body to wake up. Nepal's stock market is just a growing plant. In this case, if all parties, companies, brokers, investors and regulatory bodies can take good care and protection of this plant, then tomorrow everyone will be able to get its fruits and cool shade. But now if we start pruning while the branches are spreading a little, the plant will die. Because of which everyone is going to lose.
