Nepali Stock market my way....

So the finance ministry yesterday introduced few measures to reinvigorate the anemic stock market ( lowest level in six years ) .

One of the move was - The Government has decided to increase the public awareness about benefits of investing in capital markets in semi urban and other areas in the country, with the hope that investments from non- Kathmaduites will increase liquidity in the market and help the NEPSE to reverse its perpetual trend ..... Looking from a distance, it looks like a very encouraging initiative taken by the government. After all each and every citizen of the country ( rich or poor) should get an opportunity to investment his savings in the stock market ,with a hope that the invested money will generate higher returns in the future..... In the Democratic republic of Nepal an individual should also be free to gauge his own risk appetite and make his own investments decision .....................One can also argue this measure as a "inclusion " policy introduced by the government. Inclusion as in, an attempt to bring in " non-kathmandu" population to participate in the equity market ......................

Having said all this,in my opinion, If the " business as usual" continues in the NEPSE, saving and investments of thousand of many more will be at risk........ I don't know if it makes much sense but in my opnion government need to do few things to revive the stock market and increase confidence .............

1. Diversity : NEPSE is too " sector" specific , majority of the companies listed are financial institutions .......... Beta of the NEPSE and the financial sector is highly correlated.....there is little or no ground for diversification ... I always wonder why big industrial houses are not interested in IPOs? ..............If it was my way - if a company market value is more then a "certain" amount, then they should be forced to float there shares....... This will not only help " common" Nepali to enjoy the financial gain , but will also increase transparency and accountability of the companies........ it can possible means " less" tax evasion by these big industrial houses .....
2. Par Value : According to my knowledge ( you might have to double check) , when a company decides to float its shares, the Initial public offering price per unit of the share is always Rs 100.... In my opinion, instead of having a uniform par value for all the companies, the par value should be decided according to the valuation of the firm and its reputation ...... It does not make sense to me when the "par" value/ initial price of a "blue chip" stock is also Rs 100 and the price of a "not so healthy" company is also the same......
3. Increase and Improve Governance in the Board rooms ---- Less of "seth jee" attitude when running the board meeting and demand for accountability from the directors voted by shareholders ?? ...... As of now, these directors are suffering from "neta" virus ,they only remember the shareholders when they need " proxy" vote for next board election ... If I had my way, I would have banned the practice of paying board members for attending board meetings.......... may be there incentives should be pegged to stock performance .........
4. Introducing private equity and venture capital culture :Concern authorities should encourage structuring of venture fund - which will translate into spurring of entrepreneurial ventures and possibility in the long term increase in the number of diverse companies in the stock exchange ...