Broker association submits 6-point reform agenda to Finance Minister as NEPSE slides, Urges confidence-building measures

KATHMANDU: Amid a sharp downturn in Nepal’s stock market, the Stock Broker Association of Nepal has submitted a six-point recommendation package to Finance Minister Swarnim Wagle, seeking urgent policy intervention to stabilize investor sentiment and revive market momentum.

The move comes as the benchmark Nepal Stock Exchange index has fallen steeply from around 2,960 points before the formation of the new government to nearly 2,700 levels, reflecting weakened investor confidence. However, early trading on Monday showed signs of a modest rebound.

Key Reform Proposals to Revive Market

During the meeting held on Monday morning, the association emphasized the need for structural and regulatory reforms to deepen Nepal’s capital market. The six-point suggestions include:

Easing entry and exit provisions for banks and financial institutions in the secondary market, including revisiting the current rule that restricts share sales within six months of purchase.

Allowing non-resident Nepalis (NRNs) to participate more freely in secondary market trading.
Declaring the existing capital gains tax as final through the upcoming national budget to ensure policy clarity.
Facilitating investment of funds held by government institutions and various public funds into the secondary market.

Expediting the implementation of the Settlement Guarantee Fund mechanism, which has remained inactive despite regulatory frameworks introduced in 2018 (2075 BS) and operational guidelines in 2022 (2079 BS).

Implementing recommendations put forward by the capital market reform task force.

Government Response: Reform Commitment, No Tolerance for Financial Crime

Responding to concerns, Finance Minister Wagle reiterated the government’s commitment to governance, transparency, and private sector engagement. He stressed that while Nepal is working to exit international financial monitoring frameworks such as the grey list, enforcement actions against financial irregularities will continue.

“Those involved in financial crimes will not be spared, but there will be no selective targeting or vendetta,” Wagle said, adding that the government remains private sector-friendly and focused on long-term economic transformation.

He also signaled that the upcoming budget could be one of the most transformative in Nepal’s recent economic history, aimed at repositioning the economy for sustained growth.

Rumors and Panic Undermining Market Stability

Broker representatives, including former president Priyaraj Regmi, highlighted that misinformation and rumors are playing a major role in destabilizing the market.

They argued that some investors exiting the market or attempting to accumulate shares at lower prices are deliberately spreading negative narratives, which has disproportionately impacted small and retail investors.

“There is a need to counter false narratives in the market. Institutional investors also require a more conducive environment to participate actively,” brokers said.

They also raised concerns that ongoing investigations into the private sector, while justified, should have been handled with greater confidentiality to avoid unnecessary panic.

Call for Confidence and Policy Clarity

The association stressed that improving investor confidence is as critical as enforcing financial discipline. It urged the government and regulators to communicate clearly, implement pending reforms, and ensure that policy measures do not unintentionally trigger market instability.

As Nepal’s stock market navigates one of its most volatile phases in recent months, stakeholders say a coordinated response—balancing regulation, reform, and reassurance—will be crucial to restoring stability and long-term investor trust.