If all goes as planned, the government will open the door for the Non-resident Nepalis (NRN) to directly invest in the stock market within a month or two.
The Ministry of Industry has already forwarded the draft of the foreign investment policy -2071 to the cabinet. The policy envisages direct investment of NRNs in the stock market as well as other areas of investment.
“We have already forwarded the draft policy to the cabinet,”Narayan Acharya, ministry official who was in the team that prepared the draft, told ShareSansar today. “However, the draft has to be deliberated by the draft committee of parliament before the cabinet formally endorses it.” He added that the policy is expected to be endorsed once the summer session of the Legislature Parliament begins later this month, though House does not need to pass the policy.
Clause 9.16 of the draft, copy of which was provided by the ministry to ShareSansar, clearly states that NRNs can operate industry and businesses in Nepal like any other the Nepali citizen. The proposed policy also states that the secondary market will be opened to foreign institutional investors (FII).
Sub-clause 1.5 of Clause 10 of the proposed policy states that the investment made by FIIs through the secondary market in the listed Nepali securities (shares) will be treated as a form of foreign investment.
This is the first time the government has proposed a policy that enables direct investment of NRNs in the stock market on the basis of their NRN card issued by the government.
“If the clause in the proposed policy is anything to go by, it enables NRNs to make direct investment in shares listed at NEPSE,” said SEBON Spokesperson Niraj Giri. He, however, was quick to add that though it was good news for the share market, the government
should also clearly address the related issues such as ways to funnel such investment into the stock market and the issue of repatriation.
So far, NRNs are allowed to invest only in the mutual fund, according to the SEBON official. The key stakeholders in the market, including the Investors’ Forum and the Brokers' Association have also welcomed the move.
President of Nepal Investors’ Forum Raj Kumar Timilsina said that once endorsed the investment policy will help take the only share market of the country to a new high.
It may be noted that the stock market of some of the neighboring countries, especially India, started to rise drastically after the government there allowed direct investment of NRIs and FIIS in the stock
market.
President of the Brokers’ Association Narendra Sijapati, too, welcomed the move. “So far only those NRNs who have not forfeited their Nepali citizenship have been investing in the stock market. Once all NRNs can directly invest in the market, you can expect another zero behind the benchmark index. Remember that the NRNs are eager to invest in the market,” Sijapati said.
But he, too, urged the government to make clear and easy provisions for the NRNs to invest in the stock market and repatriate the return.
But sources privy of the development maintain that since the pro-market government itself has come up with the proposed policy with an aim to boost the economy, including the capital market, the
government will ensure conducive environment for the NRNs to whole heartedly invest in the stock
market.
Source:- ShareSansar
The Ministry of Industry has already forwarded the draft of the foreign investment policy -2071 to the cabinet. The policy envisages direct investment of NRNs in the stock market as well as other areas of investment.
“We have already forwarded the draft policy to the cabinet,”Narayan Acharya, ministry official who was in the team that prepared the draft, told ShareSansar today. “However, the draft has to be deliberated by the draft committee of parliament before the cabinet formally endorses it.” He added that the policy is expected to be endorsed once the summer session of the Legislature Parliament begins later this month, though House does not need to pass the policy.
Clause 9.16 of the draft, copy of which was provided by the ministry to ShareSansar, clearly states that NRNs can operate industry and businesses in Nepal like any other the Nepali citizen. The proposed policy also states that the secondary market will be opened to foreign institutional investors (FII).
Sub-clause 1.5 of Clause 10 of the proposed policy states that the investment made by FIIs through the secondary market in the listed Nepali securities (shares) will be treated as a form of foreign investment.
This is the first time the government has proposed a policy that enables direct investment of NRNs in the stock market on the basis of their NRN card issued by the government.
“If the clause in the proposed policy is anything to go by, it enables NRNs to make direct investment in shares listed at NEPSE,” said SEBON Spokesperson Niraj Giri. He, however, was quick to add that though it was good news for the share market, the government
should also clearly address the related issues such as ways to funnel such investment into the stock market and the issue of repatriation.
So far, NRNs are allowed to invest only in the mutual fund, according to the SEBON official. The key stakeholders in the market, including the Investors’ Forum and the Brokers' Association have also welcomed the move.
President of Nepal Investors’ Forum Raj Kumar Timilsina said that once endorsed the investment policy will help take the only share market of the country to a new high.
It may be noted that the stock market of some of the neighboring countries, especially India, started to rise drastically after the government there allowed direct investment of NRIs and FIIS in the stock
market.
President of the Brokers’ Association Narendra Sijapati, too, welcomed the move. “So far only those NRNs who have not forfeited their Nepali citizenship have been investing in the stock market. Once all NRNs can directly invest in the market, you can expect another zero behind the benchmark index. Remember that the NRNs are eager to invest in the market,” Sijapati said.
But he, too, urged the government to make clear and easy provisions for the NRNs to invest in the stock market and repatriate the return.
But sources privy of the development maintain that since the pro-market government itself has come up with the proposed policy with an aim to boost the economy, including the capital market, the
government will ensure conducive environment for the NRNs to whole heartedly invest in the stock
market.
Source:- ShareSansar
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