The Securities and Exchange Board of Nepal has issued a five-point instruction to Nepal Stock Exchange to protect investors and maintain transparency after recent Bhotekoshi floods damaged hydropower companies.
After huge floods in Bhotekoshi river, share prices of hydropower companies dropped heavily. Because of this, Nepal Securities and Exchange Board (SEBON) on Monday gave five-point direction to Nepal Stock Exchange (NEPSE) for special monitoring and strict information flow in the market.
SEBON sent this instruction to protect interest of investors and maintain market transparency during natural disasters. SEBON wants investors to get accurate information about the actual damage of the projects.
Details of Affected Companies to be Made Public
According to the instruction, SEBON has asked NEPSE to prepare a detailed list of listed companies that are directly or indirectly affected by natural disasters. SEBON directed to collect details from the affected companies about physical damage, production status, assets, and financial condition, and publish them through information system.
The details should include early physical damage in the project, shutdown of electricity production, and estimated impact on production capacity. It also must include loss of human resources and damages in transmission and distribution lines.
Furthermore, companies must share details about insurance status of assets, status of insurance claims, and initial financial impacts. They also need to publish estimated time for starting the project again, and how it affects bank loans and loan repayment capacity. SEBON also asked to publish details of immediate steps taken by company management after disaster.
Special Monitoring on Share Trading
SEBON has also directed NEPSE to keep special eye on stock trading of flood-affected companies. This includes continuous monitoring of unusual price changes, strange trading volumes, abnormal buy or sell orders, and unusual trading before major news becomes public. NEPSE has to watch anything that can affect fairness and transparency of market.
Additionally, SEBON asked NEPSE to prepare a proper procedure for information flow and suspending or resuming share trading during disasters, accidents, fire, earthquakes, and other unusual events. NEPSE must submit regular progress reports regarding these instructions and details of any unusual market activities to SEBON.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
