Stocks rose on Tuesday after the Nepal Stock Exchange (NEPSE) eased the circuit breaker threshold and shortened the trade settlement period. The NEPSE index made a double-digit jump of 13.72 points to close at 1,163.47 points.

The circuit breaker is a condition in which the Nepal Stock Exchange halts share transactions if the price of shares of any listed company or the overall market increases beyond a prescribed limit. Previously, the bourse used to suspend transactions for 15 minutes when the NEPSE index fluctuated by 3 percent. If the index rises or falls by 4 percent, trading is suspended for 30 minutes. Share transactions are halted for the day if the index fluctuates

by 5 percent.

As per the new rule issued by the Nepal Stock Exchange which came into effect from Tuesday, share transactions are suspended for 20 minutes if the index crosses the 20 percent limit for the first time in a day during trading hours. In case of a 5 percent rise or fall in share prices, trading is halted for 40 minutes. Trading is halted for the rest of the day if the index fluctuates by 6 percent.

Nepal Stock Exchange spokesperson Murahari Parajuli said the new system would provide flexibility to investors to post purchase or sales orders in large amounts at once.

The Nepal Stock Exchange said in a press release that most of the problems seen in its automated online trading system had been resolved. The bourse claimed that it had solved the problems regarding data display, generating a unique client code, DNA login, GTC order modification, integration with CDS and Clearing and clearing banks, network connectivity and floor sheet display.  

The Securities Board of Nepal has asked the Nepal Stock Exchange to shorten the time needed to settle stock trades. In a bid to streamline the entire stock trading cycle, the regulator has planned to cut down the length of the transaction settlement period from the existing T 3 days to T 1 day from the next fiscal year.

Stockbrokers said the new initiatives from the two regulators could have helped the market to grow. “At a time when investors are under pressure to settle interest payments on bank loans, and these factors have helped build the investors’ confident,” said a stockbroker.