Parliament Turns Heat on Stock Market Slump, SEBON Given 10-Day Deadline for Reform Plan

Nepal's prolonged stock market decline has become a major issue in Parliament, prompting both ruling and opposition lawmakers to question the government's handling of the capital market as investors continue to suffer heavy losses. Since the formation of the new ruling coalition on March 26, the market has moved in the opposite direction of investor expectations, wiping out more than Rs 550 billion in market capitalization. Responding to mounting concerns, the House of Representatives' Finance Committee has instructed the Securities Board of Nepal (SEBON) to submit a detailed capital market reform plan within 10 days. During parliamentary discussions, lawmakers blamed policy uncertainty, delays in regulatory decisions, and weak investor confidence for the market's prolonged decline. Rastriya Swatantra Party (RSP) lawmaker Sagar Dhakal argued that investors who had expected the market to improve following the change in government had instead witnessed massive losses, while daily trading volume has fallen sharply from around Rs 12 billion to just Rs 3–4 billion. Other lawmakers described the market downturn as an early warning sign for the broader economy and urged the government to introduce clear and stable policies. During the Finance Committee meeting, members also criticized delays in approving IPOs and rights issues, the slow implementation of financial instruments such as short selling, index funds, corporate bonds, REITs, and venture capital, and concerns over weak corporate governance and market infrastructure. Lawmakers further suggested that ongoing discussions about asset investigations and anti-money laundering enforcement have created uncertainty among large investors, contributing to reduced margin lending and increased selling pressure in the market. In response, SEBON officials informed the committee that they have prepared the Capital Market Development Roadmap 2083, which aims to increase market capitalization to 150 percent of GDP, expand the number of listed companies to more than 500, and raise average daily turnover to Rs 20 billion over the next decade. While lawmakers welcomed the roadmap, they stressed that investors are looking for concrete action rather than promises, making the upcoming 10-day deadline a crucial test for the regulator's commitment to restoring confidence in Nepal's capital market.