The volume of transactions at Nepal stock exchange has been soaring in the last few years and has reached RS4.5bn during the last fiscal year, up from RS2.14bn a year earlier. Not yet much in US$ terms ( just US$ 640mio) but the growth rate is astonishing. Can you imagine where the turnover stood 10 years ago? At that time the turnover per year had reached RS100mio, which was again 5 times more then 4 years earlier. It shows that even in Nepal things can develop.

Now the discussion has started if it makes sense to privatize the stock market. This will take again sometime as the regulators are a bit slow, but that this discussion has started seriously is a hopeful sign.

Mind you Nepal stock exchange is the only Stockexchange in the whole of South Asia which is not yet automated. Even Bhutan where industrialization is just at the beginning has already one automated Stockexchange. Automation will allow the Nepal Stock exchange to grow to reach reasonable levels where institutional players can come in.
Now privatization has come in as a buzzword, but don’t expect too much. Yes there may be improvements , but the real topic is the introduction of corporate transparency. And again we may be on the right path..

Why?

It’s the VAT which could do wonders on that, as VAT successfully reformed means the accounts of bigger companies will come nearer to reality. Let’s hope for progress there as well.