Stock Exchange – Royal Securities Exchange of Bhutan
Infotech software system will allow transactions to be done online
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| An Infotech official briefing an employee at the stock exchange |
Stock Exchange 22 September, 2011 – Almost 17 years after it was set up, the Royal Securities Exchange of Bhutan ltd is poised for an extensive overhaul that will allow internet-based real time trading, and do away with the physical delivery of stock subscriptions.
This advanced and systematic trading of instruments will be possible using the Infotech’s software called Capizar.
Today, the exchange has a trading hall manned by few officials, where trading is done twice a week. An investor is required to first get in touch with a broker, and set the price for either buying or selling. The broker then visits the exchange twice a week to announce the price and find matching buyers and sellers.
This will all be history, as the new software system will consist of comprehensive broker accounting facilities, trading engine, clearing and settlement functions, central depository functions, market surveillance and an IPO engine.
Yesterday, officials from Infotech briefed Bhutanese brokers on the new software.
With the new software, a broker will not be required to visit the stock exchange and, at the same time, an investor will not be required to visit the brokers, since every detail will be available online. The stock exchange’s trading hall will be connected with the broker.
Infotech’s managing director, Suresh Agarwal, who was in the capital, said the move will make the market more visible, as the software will provide every detail of the stock market in the exchange’s website, ranging from prices of stocks, movement of stock trading, available traders willing to trade at a particular price, and new initial public offers among others.
“We’ll basically bring the stock market to every household,” he said. Investors will have the luxury of sitting behind their computer, look at the market details and decide on investments.
This will also improve liquidity in the market, as movement of cash becomes easy and vibrant, he added.
RSEB’s chief executive officer Dorji Phuntsho said the move would make the market more formal, systematic and increase outreach at the same time.
Stock subscription from other dzongkhags had to be manually carried in files and delivered to Thimphu. This will not be needed with the new software.
When the capital market is not visible, it is difficult to attract any capital, he said.
The move is also expected to increase minority shareholders in companies, since anyone in the country can invest easily in companies’ stocks.
“The lack of such a computerised system is one of the main reasons why the secondary market is so inactive in Bhutan,” Dorji Phuntsho said. “In most vibrant economies, big businesses go to the stock markets to raise money and in turn make money for the investors. In Bhutan, however, businesses go almost exclusively to the banks, leaving the capital market underdeveloped and poorly utilised.”
The software is being provided to the exchange through financing from the Royal Monetary Authority and the World Bank.
Source: kuenselonline