The Bhutanese stock market, considered among the smallest stock markets in the world, has been seeing significant growth since the last five years. Going by its records, the volume of trading of shares has been increasing alongside the market’s value.
From Nu 22.5bn in 2014, today, the value of the stock market has increased to almost Nu 50bn.
This booming secondary market is attributed to the technological advancements in the country which has made access to the market easier and, the introduction of share splitting where the face value of a share is brought down for the low-income group to participate.
According to the Royal Securities Exchange of Bhutan Limited (RSEBL), another major factor is the people’s increased financial literacy. Since 2017, the RSEBL has been conducting a Financial Literacy Program on the fundamentals of the stock exchange.
“We started a literacy program every Friday and we also travel to the regions and conduct this program. We are also gearing up for a roadshow by next year or end of this year in all the regions. We have trained more than 2,500 investors. Every Friday we do a dedicated course for them on the basic stock exchange and the talk about technology, interestingly we have always seen at least 8 or 9 people attending. We use social media as our marketing tool,” Promod Chhetri, the General Manager of RSEBL, said.
However, for now, despite the increased financial literacy rate, it is still challenging for the RSEBL to have companies listed in the stock market. Most private businesses prefer not to do so due to the limitations of government policies regarding e-commerce and lack of incentives for the listed companies.
Listing a company requires many paper works and is financially expensive as well. In addition, entering the stock market means being obliged to disclose information to the public. Today, there are 21 companies listed with the Authority.
The RSEBL was established in August 1993 as a non-profit making organization under the aegis of the Royal Monetary Authority.
Yeshi Dorji
