May 17: The Securities Board of Nepal (SEBON) is preparing to increase the trading hours in the secondary market by one hour to five hours a day. At present, the share transaction is done for 4 hours daily. 

The board has already given unofficial instructions to Nepal Stock Exchange Limited (Nepse) in this regard. Nevertheless, there has not been any official discussion on how to proceed ahead. Meanwhile, Nepse has also unofficially informed the securities brokers to extend the trading hours. 

According to Santosh Mainali, president of the Stock Brokers Association of Nepal, formal discussions are yet to take place regarding the extension of trading hours. "Even though the board has not formally discussed the issue with us, Nepse has informed us about the extension," said Mainali. 

Earlier, Bhishmaraj Dhungana, during his tenure as president of the board, had given verbal instructions to extend trading hours to five hours a day. Later, on March 13, 2020, he had officially instructed to operate the business for 5 hours daily from March 15, 2020. 

The share trading was closed after the nationwide lockdown was announced to curb the spread of Covid-19 infection. Although the secondary market was open in between the lockdowns, there was no full time trading due to the circuit breaker. 

Later, the trading hour was again reduced to four hours after the brokers complained that it was not practical. Stakeholders say that the new initiative failed after the decision was made baselessly without any study. 

Some have commented that the regulatory body has made such a decision without any study even now.

According to a source within the board, they are working on this issue following the demand for more trading hours by the investors and brokers. Mainali says that the increased trading hours will benefit the investors. 

As Nepalis living abroad can also trade as per their convenience, Mainali says that the transaction amount in the market will increase. "Increasing the time will increase the business volume and such an arrangement will be more beneficial in the long run than at present. Nepalis living abroad will also be able to do business and daily business will also increase," he said. 

However, Jyoti Dahal, a securities expert and advocate says that in the case of Nepal, trading hours are ideal at the moment. He said that in a small country like Nepal, one should not have unfavourable practice in the market under various pretexts.