KATMANDU, September 5: Nepal Stock Exchange (Nepse) index shed 25.47 points, or 1.61 percent, to close at 1,554.56 points on Monday, as the capital market regulator's announcement to make personal account number (PAN) compulsory for investors from next year left investors panicked.
The benchmark index is losing value since the start of the week when the market opened for trading at 1,580.03 points.
Organizing a press meet last week, the Securities Board of Nepal (Sebon) announced that it was preparing to introduce a rule for investors, making PAN compulsory for share trading from Fiscal Year 2018/19. The announcement has drawn cold response from investors.
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“The rapid fall in the benchmark index since the first trading day of the week reflects stock market panic due to PAN requirement,” said Dipendra Agrawal, a stock investor. “Though PAN requirement is positive for shareholders, there is a psychological fear among investors that such rule would require them to maintain book keepings and accounts for tax purpose. Investors have understood in a way that the new requirement would make share trading a cumbersome process.”
According to Sebon officials, the new rule that requires investors to mandatorily have PAN card while investing in the secondary market will come into effect from Fiscal Year 2018/19.
The Sebon is preparing to introduce the new provision after its plan to issue identification card for investors failed to materialize. According to officials of the capital market regulator, the mandatory PAN requirement provision is aimed at maintaining database of investors. As the Sebon still does not have database of investors, it is believed the new requirement will help the capital market regulator to have a database of investors.
Meanwhile, all trading groups ended in the red zone on Monday, with Insurance group shedding the highest points. The Insurance sub-index plunged 136.773 points to close at 8,718.01 points.
A total of 1.57 million units of shares of 152 companies worth Rs 842.9 million were traded in the market on Monday through 9,241 transactions.
