Nepal market trembles as Maoists edge towards majority

April 16th, 2008 - 1:34 pm ICT by admin  

By Sudeshna Sarkar
Kathmandu, April 16 (IANS) With Nepal’s former Maoist guerrillas edging towards majority after last week’s election and uncertainty over the fate of Girija Prasad Koirala’s coalition government, Nepal’s share market began suffering jitters triggering a dip in stock prices. On Wednesday morning, as counting of votes continued for the seventh day, the Maoists, fighting an election after 17 years, had won 118 of the 220 seats declared so far, needing only two more for a simple majority in the first phase of the crucial constituent assembly election.

With the country poised for a new leadership, the Nepal Stock Exchange (Nepse), that opened trading Tuesday after a nine-day holiday due to the polls, dipped nearly 27 points, forcing a halt in trading for an hour.

The Standard Chartered Bank took the biggest hit with the price of shares going down by Nepali Rs.300 per share.

Of the 40 companies whose shares were traded Tuesday, 36 saw a fall in prices, causing massive losses.

There was a fear of escalated flight of capital with the business community apprehending anti-investor laws and tougher ceilings on land ownership.

However, the former guerrillas were trying to ally the fears.

In their election manifesto, the Maoists emphasised liberal trade policies with priority to the development of the hydropower sector and tourism.

In his victory speech, after he was declared elected from a prestigious constituency in the capital, Maoist chief Prachanda emphasised that his party would work in cooperation with the other parties, develop good relations with the international community and focus on fast-paced economic development.

Of the 240 seats that will choose representatives to the 601-member constituent assembly on the basis of direct fights, the traditional ruling parties have failed to cross even the half-century mark.

While Koirala’s Nepali Congress (NC), the biggest party in parliament before the election, managed to win 33 seats, the Communist Party of Nepal-Unified Marxist Leninist (UML), that had in the past kept a stranglehold on Kathmandu valley, was floundering a poor third with only 28 seats, having been routed in the capital.

The Maoists, who ended a 10-year armed revolt to fight through the ballot instead, were also far ahead in the second phase of the election, in which 335 seats would be decided on the basis of proportional representation (PR).

They had garnered nearly 38 percent of the votes cast so far, while the UML had bettered its performance in the second race with almost 28 percent and the NC fell to third position with 27 percent.

Based on the vote count under the PR system, the Maoists have so far won an additional 125 seats with the NC accounting for 90 more and the UML 93.

While the mortified UML announced it was quitting the seven-party government out of deference to the public verdict, which had gone against them, the NC said it was holding consultations among its top leaders to decide if it would remain in a Maoist-led government.

The UML is recalling their seven ministers from the ruling coalition.

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