KATHMANDU: The Nepal Stock Exchange (NEPSE) is set to implement a new method to determine the final price of listed companies, calculating the average price based on transactions made in the last 15 minutes of trading.
NEPSE spokesperson Murahari Parajuli stated that the new method was introduced to address the issue of excessive price fluctuations often seen at the end of the trading period.
“This method has been introduced keeping in mind the extreme price fluctuations that occur at the end,” Parajuli said, adding that it will be implemented once the NEPSE board of directors approves it.
According to a NEPSE source, the new system may come into effect from March 23.
“A meeting of the NEPSE board of directors is being prepared to be held around March 17 or 18. There is a preparation to implement it from March 23,” the source told Khabarhub.
The system was initially tested after the NEPSE board of directors proposed a trial, which proved successful.
“The IT team was given the opportunity to make it a trial, and it has been successful in terms of implementation,” the source added.
NEPSE sought approval from the Securities Board of Nepal on February 17 to introduce the average price calculation, which was granted the following day. However, the final decision will be made by the NEPSE board of directors after a presentation from the employees.
The average closing price will be calculated by dividing the total transaction amount of the last 15 minutes by the number of shares traded during that period.
Each second’s transaction is considered separately and accumulated to determine the total amount and number of shares.
This calculated price will be the opening price for the next trading day.
Investors have welcomed the decision, expressing optimism about its positive impact on the market. Stock analyst Chhotelal Rauniyar lauded the move, saying that it addressed long-standing demands from investors.
“This is a very good thing. The demand we have been making for a long time has been addressed. Finally, the market was being manipulated by excessive increases and decreases, and that has stopped,” said Rauniyar.
He said the new system aligns with global practices and would ultimately stabilize the Nepali stock market.
“Averaging is a thing in the stock market all over the world. Introducing such good practices in Nepal will benefit the market,” he added.
Similarly, stock analyst Mukti Aryal also expressed confidence in the new system.
“This is good. It will do the market good. It was a necessary issue for Nepal. Now it’s good,” Aryal said.
Comment