Investors Submit Memo to NEPSE: Complaint on Non-Transparent 15-Minute Turnover Calculation

A group of investors has submitted a memorandum to the Nepal Stock Exchange (NEPSE) requesting capital market reforms. The investors have drawn attention to the deteriorating state of the capital market and have made several demands for improvements. They have raised concerns about NEPSE's method of calculating the average turnover of the last 15 minutes, calling it non-transparent and requesting an immediate review to disable it. The investors have mentioned that the method has been problematic and that they no longer trust it.

Furthermore, the investors have demanded that the ratio of shares between founders and the general public be equalized for listed companies. They also suggested that, in the case of banks and financial institutions, the shareholding ratio of founders in hydropower and other sectors should be standardized. Additionally, they have called for the implementation of a rule that would prevent founders from selling their shares during the payback period declared by companies. Moreover, they have requested an immediate halt to the issuance of rights shares and that rights shares should only be issued based on a company's dividend capacity and growth.

The investors also highlighted that merchant banks and capital firms are raising unauthorized funds under the name of pre-IPO premiums, demanding an immediate stop to this practice. They have emphasized the need for strict measures to prevent illegal share trading. Furthermore, they called for a greater focus on institutional governance of listed companies and requested that companies publish audit reports and other management information on their websites. There is also a demand for monitoring the effectiveness and transparency of credit rating agencies. The investors have warned that they will resort to street protests if these reforms are not implemented.