Only 20 companies traded through OTC Market in a year

  1 min 29 sec to read
Only 20 companies traded through OTC Market in a year

December 21: Only 20 companies have traded their shares in the over the counter (OTC) market which was started nearly 1 year ago. The OTC market allows trading of shares belonging to de-listed companies and others failing to meet listing requirements. "In the total of 41 companies listed in OTC, only 20 have undertaken the transactions," said Murahari Parajuli, Spokesperson of Nepal Stock Exchange (NEPSE).

The OTC market is normally dormant, futile and irregular compare to the secondary market. The market provides a passage for investors to change the ownership and recover their investment. "Nepal being short of Public Ltd Companies and most of them listed in NEPSE, the OTC market of the country is more of inactive," Parajuli opined.

"In developed countries, most of the share trading takes place at OTC market. However, in Nepal, the OTC market is seen as the platform for weak companies. Thus, the companies avoid OTC market," said Niranjan Phuyal, Senior Manager of NEPSE. "The Upper Tamakoshi Hydro Project has issued shares to nearly 200,000 employees and not to the public. If only it had registered with OTC, the employees could have trade their shares," he added. "OTC market is a good platform to provide liquidity to such shareholders."

Previously, as per the decision of board of directors, share ownership changing activities of the companies not listed in securities market were undertaken in Company Registrar's Office. However, the Company Registrar Office issuing a circular has directed the related bodies to carry out such activities along with trading of shares from the OTC market. After which, it is expected that the OTC market may take a pace. 

No comments yet. Be the first one to comment.