Stock market investors can now place buy and sell orders online and watch trading live through the new online facility developed by the Royal Securities Exchange of Bhutan (RSEB).
The new trading facility was launched yesterday to mark RSEB’s silver jubilee in Thimphu attended by the chief advisor to the interim government, Chief Justice Tshering Wangchuk, senior government officials and representatives of listed companies, corporate and private sector.
The online facility, developed in-house, is a part of RSEB’s Capital Market Solution (CaMS), a new technology platform for the Bhutanese capital market and represents automation of the entire securities exchange system.
Automation is expected to create more confidence in the capital market, make it easier to invest and further enable the government and private sector to access long-term financial resources for investment.
Chairperson of the RSEB board, Kipchu Tshering, said the foundation for the securities market was laid 43 years ago when His Majesty the fourth Druk Gyalpo issued the Royal Charter on 7 January 1975 to establish Royal Insurance Corporation of Bhutan (RICB) as a public company with its shares offered to private individuals and civil servants. This was followed by divestment in other public undertaking companies such as BCCL, PCAL, BTCL and BBPL.
In the absence of a centralised market at that time, he said the shares were traded informally, and change in share ownership was found very cumbersome. The Royal Monetary Authority, with the assistance of Asian Development Bank established RSEB to provide a formal trading platform and encourage broad-based ownership of companies, mobilise savings to productive sectors, raise cheaper source of capital and liquidity to shareholders.
Today, the number of listed companies has grown from four to 21, shareholder accounts from 1,828 to 62,845 and total paid up capital of the companies has increased from Nu 413.39 million to Nu 7.5 billion. The collective market value of these companies is Nu 33 billion.
In terms of profit sharing, Nu15.32 billion was disbursed as dividends to shareholders. Various companies including the government also raised Nu 15 billion through issue of bonds.
Chief Justice Tshering Wangchuk highlighted the importance of the securities market in building a strong economic foundation and promoting private sector growth while strengthening corporate governance, management and internal control systems.
Drawing attention to the country’s macro economic scenario, he said the growth of Bhutan’s securities exchange in particular and the capital market has been constrained by inadequate institutional framework, poor market infrastructure, an under-developed private sector, limited institutional investors and low level of financial literacy.
“The automation of the Securities Market is indeed a major milestone and today’s launch assumes added significance because it is a departure from a donor based third party software to an ownership based as it is developed entirely in-house engaging our own expertise,” he said.
The RSEB CEO, Dorji Phuntsho, said strong institutional and policy support from the government, together with private sector engagement, is essential to realise the virtues of capital market.
“Capital market is the locomotive for private sector growth and our private sector, must take advantage of the market when conditions are right,” he said. “Companies world over have attained their true value only when they are listed.”
The silver jubilee celebrations also saw the launch of a publication that provides a glimpse of RSEB’s journey in the past 25 years and profiles the existing 21 listed companies.
Rinzin Wangchuk