During a meeting of the Finance Committee of the House of Representatives on Wednesday, lawmakers raised serious concerns regarding the delays in IPO and right share approvals and the weak trust of investors.
During the meeting, MPs discussed about the lack of good governance in the capital market and the falling confidence of investors due to delayed approvals of securities.
UML MP Urges for Quick Action
Lawmaker from CPN (UML), Dr. Pushpa Raj Kadel, pointed out that hundreds of files for IPO and right share approvals are currently stuck in the pipeline at the Securities Board of Nepal (SEBON). He requested the authority to make the approval process much faster.
Kadel said that because the leadership of board changes frequently and there is hesitation to make decisions, many proposals have been stopped for a long time. This situation has directly affected the growth of the capital market.
Concerns on Corporate Governance and Investment
Kadel also mentioned that the capital market of Nepal is still not able to collect enough investment for productive sectors. Because of weak trust on company promoters and corporate governance, long-term investment is not attracting well. He noted that currently, investments are mostly focused on areas that give short-term returns.
Except for the hydropower sector, capital flow in manufacturing and other productive areas is extremely low. He added that even capable companies are avoiding the capital market, so it is necessary to improve corporate governance to rebuild investor trust.
Congress MP Points Out Declining Investor Morale
Similarly, Nepali Congress lawmaker Narendra Kerung said that the trust of private sector and investors on the government is getting weak. He mentioned that the continuous fall in the share market has increased disappointment among investors.
Kerung demanded a clear plan from the government and regulatory bodies to boost investor morale and restore trust in the market. He said that even though there is an environment for investment, the private sector is not fully confident on the government. He suggested that the government must find the main reasons behind this and take effective steps for improvement.
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.
