Principles of the Trading System

The WTO agreements are lengthy and complex because they are legal text covering a wide range of activities. They deal with: agriculture, textile and clothing, banking, telecommunication, government purchase, industrial and much more. But a number of simple, fundamental principles run throughout all of these documents these principles are the foundation of the multilateral trading system.

·         Trade without discrimination

o   Most favored nation(MFN): trading other people equally

o   National treatment: treating foreigners and local equally

·         Freer trade: gradually, through negotiation

Lowering trade barriers is considered as most obvious means of encouraging trade. The barriers concerned include customs duties and measure such as import bans or quotas that restrict quantities selectively, from time to time other issues such as red tape and exchange rate policies have also been discussed.

·         Predictability: through binding and transparency

Sometimes, promising not to raise a trade barrier can be as important as lowering one, because the promise gives businesses a clearer view of their future opportunities.

·         Promoting fair competition

The WTO is sometimes described as a ‘free trade’ institution, but that is not entirely accurate. The system does allow tariffs and, in limited circumstance, other forms of protection. More accurately, it is a system of rules dedicated to open, fair and undistorted competition.

·         Encouraging development and economic reform

As we know that WTO system contributes to development. On the other hand, developing countries need flexibility in the time they take to implement the system’s agreements. And the agreements themselves inherit the earlier provision of GATT that allow for special assistance and trade concessions for developing counties.

·         The case for open trade

Under this, Nepal can be in the position of profit through the liberal trade policies- policies that allow the unrestricted flow of goods and service–sharpen competition, motivate innovation and breed success.

·         Comparative advantage

Normally, suppose country Nepal is better than India for raw material and India is better than Nepal to make effective product. Through the collaborative way, both can be in benefit position.

Kathmandu Durbar Square

Kathmandu Durbar Square in the heart of old Kathmandu city in Basantapur never fails to impress first time visitors with its intricate wood carvings and rich history. Surrounded by concrete buildings, the complex is an oasis in a fast developing, chaotic modern city. Once the residence of Nepal's Royal family, all coronation ceremonies were held here. The palace is an amalgamation of eastern and western architecture with additions by Rana and Shah rulers over the centuries. An unbelievable 50 temples lie within the vicinity including the temple of the titular deity, Taleju Bhawani. The Durbar is divided into two courtyards, the outer Kasthamandap, Kumari Ghar, and Shiva-Parvati Temple, and the inner section consisting of Hanuman Dhoka and the main palace. Some floors have been converted to museums dedicated to three generations of Shah kings. Most parts of the palace premises are open to tourists throughout the week.

Some important monuments to see in this area are:
The Taleju Temple is the tallest of all structures, built by King Mahendra Malla in 1549 AD. This temple is open to the public for one day each year during the Dashain festival.

The Jagannath Temple, built in the 16th century is known for the fascinating erotic figures carved on the wooden struts.

The Kal Bhairav, one of the largest 17th century stone statues in Kathmandu, representing the terrifying aspect of Lord Shiva.

Swet-Bhairav - the temple is open to the public once in year during Indra Jatra Festival. The 17th century Kumari Temple (the temple of Living Goddess) is an example of highly developed Nepali craftmanship.

Kaandasthamp, from which Kathmandu derives its name, is said to have been built from the timber of a single tree.

Nautalle Durbar (the nine storyed palace)

Central Depositary System

In the context of global, central depositary system is not new to stock market. But in the case of Nepal, it is regarded as the innovation in the stock market. The CDS provides its services within an online computer system with Participants having direct online access to the system. Trades are settled within a rolling T+3 settlement cycle on a strict Delivery versus Payment (DvP) basis.  Final and irrevocable transfer of funds occurs through the central bank with same-day funds on settlement date. The CDS has established a Guarantee Fund to guarantee the settlement of transactions in the event of a default by a Participant.  The Fund is managed by a Business Conduct Committee that monitors operations relating to risk management.

Central Depositary System in Nepal

            Several activities have already taken place in order to substitute the present paper versus payment settlement system by an independent electronic computerized central depositary system. The formation of a three member committee by the government under the chairmanship of the Securities Board of Nepal is regarded as key in the process of adapting the CDS.

The story of Central Depositary System and clearing turned true after the formal inauguration of the Central depositary on 31, March, 2011 by Yuvraj Khatiwada. At the same time the software was handed over by Ambassador Rakesh Shud from Embassy of India which was prepared by Tata Consultancy. Operation of CDS system will open the new era in capital market of Nepal as it will wipe out inconsistency and manipulation in stock trading as every transaction and executer can be easily traced out. The safety, security of physical holding to electronic medium will eliminate thefts, interceptions and subsequent.

The capital market regulator has expressed hope that the operation of central depository company will change the face of the secondary market. Since the operation of Central Depository System (CDS) will displace manual share transfer with automated system allowing the hassle free participation of investors outside the valley in trading due to easier settlement, moreover CDS is supposed to promote securities market in the cities outside the capital where despite the presence of brokerage services the difficulty of share transfer and settlement has discouraged the transaction.
            As per the website of the Security Board of Nepal, Earlier, the board had refused to approve the CDSC bylaw and directed it to revise the fee structure as the transaction would have been expensive affair for the investors. The current fee structure is determined at minimum threshold so that company will be at break-even point.

History of Stock Market in the Nepal

•      Stock market began with the issue of shares by Biratnagar Jute Mills Ltd in 1937.

•      Security Marketing Centre (SMC) was established in April 1977 under Industrial Policy, 1974 with the objective of facilitating the transaction of government development bonds and corporate securities.

•      SMC started secondary trading of securities in November 1981 which restricted to government bonds.

•      Security Exchange Act, 1983 was enacted in 1983.

•      The then SMC was converted into Securities Exchange Centre (SEC) in 1984. SEC opened its floor for corporate share trading in November 1984.

•      The first amendment in Securities Exchange Act, 1983 in 1993 paved the way for the restructuring of stock market in Nepal, which led to establish Securities Board of Nepal (SEBON) in 1993 with a mandate to regulate and develop the stock market.

•      The first amendment in the Act also led to convert the then SEC into NEPSE, a full-fledged open-out-cry trading system with the induction of stock brokers in January 13, 1994.

History of Stock Market in the world

·         Amsterdam Stock Exchange in 1602 in the city of Amsterdam, Netherlands. Paris Bourse in 1724 in Paris, France.

·         Philadelphia Stock Exchange in 1790 in Philadelphia, USA.

·         London Stock Exchange in 1801 in London, England.

o   However, a market had existed previously (with records beginning in 1698: agro-commodity) at Jonathan’s Coffee House, also in London.

·         Milan Stock Exchange in 1808 in Milan, Italy.

·         New York Stock Exchange in 1817 in New York, USA. This exchange was preceded by the Buttonwood Agreement of 1792.

·         Frankfurt Stock Exchange in 1820 in Frankfurt, Germany. 1820 denotes the first records of shares being traded. There was, however, a market for bonds (debt instruments) since the late 18th century.

·         Bolsa de Madrid in 1831 in Madrid, Spain.

·         Toronto Stock Exchange in 1861 in Toronto, Canada.

·         Australian Stock Exchange in 1872 in Sydney, Australia.

Introduction of Stock Market

Introduction of Stock

Normally, the stock of any organization constitutes the equity stake of its owners. It represents the residual assets of the company that would be due to stockholders after discharge of all senior claims such as secured and unsecured debt. Stockholder’s equity can not be withdrawn from the company in a way that is intended to be unfavorable to the company’s creditors.

Stock Exchange

            A stock exchange is a form of exchange which provides services for stock brokers and traders to by or sells stocks, bonds on other securities. Stock Exchange also provides facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends.

 

Nuwakot Darbar

The historical palace area of Nuwakot located at 76 km far west-north of Kathmandu has been regarded as an important place since ancient time. Before 1744 AD, nepal was devided into numerous tiny States. In order to build a single strong nation, Kind Prithvi Narayan Shah of Gorkha led the unification campaign from this region. During that time, Nuwakot as a colony of Kantipur (Kathmandu) was regarded as the western main gate to enter the valley. This place was also popular as the main route for trade with Tibet.


Making the Nuwakot hill as the main fort including other eight forts- Belkot, Bhairabkot, Kalikot, Malakot, Dhuwankot, Pyaskot, Simalkot and Salyankot in its sourrounding area, collectively was named as ‘Nawakotta’ (nine forts). So it is believed that ‘Nuwakot’ was derived from Nawakotta. Due to the influence of Kantipur, different places, rest houses, dabalis, temples and stupas of archeological significance were built and various cultural customs were practised in Nuwakot during Malla and Shah periods which still have been observed with pride.


Most popular Saat Tale Darbar (Seven storey palace) was built by Prithvi Narayan Shah by evicting labourers from Lalitpur in 1762 and still it is regarded as a model of architecture. This used to be tropical place and it is notable that the King Rana Bahadur Shah met the British representative Mr. William Kirkpatric at this place in 1793 just after the war between Nepal and China. Just east-southern side of Saat Tale Darbar, here is a west facing palace made of oily bricks, called Rangamahal. It was built as a recreational spot for the three Malla Kings of Kantipur Valley. There are may dabalis and Resthouses which were built with religious and social purposes.
Cultural practices of Malla period continues to be the main attraction for tourists in this area. Some of the cultural festivals observed even today are Bhairabi Jatra or Sindure Jatra, Narayan Jatra, Gai Jatra, Shipai Jatra, Devi Jatra, Lakhe dance, Fulpati and Krishna Janmastami etc.