Banking News – The Securities Board of Nepal (SEBON) has placed corporate bonds at the center of its newly unveiled Capital Market Development Roadmap 2083, aiming to build a deeper, more diversified, and investment-friendly capital market while offering investors a reliable alternative to the stock market.

According to the roadmap, corporate bonds will play a key role in helping the private sector raise long-term capital while expanding investment opportunities beyond traditional equity trading.

A corporate bond is a debt instrument issued by companies to raise funds from investors for purposes such as business expansion, new projects, and capital financing. SEBON believes strengthening the bond market will provide investors with a more stable investment option alongside shares.

Although Nepal’s capital market is currently dominated by equity trading, the regulator noted that the corporate bond market remains in its early stages. SEBON said expanding the institutional debt market is essential to reduce the economy’s heavy reliance on the banking sector for long-term financing.

Under the roadmap, SEBON has set a target of increasing the corporate bond market’s share to around 20 percent of Nepal’s total capital market by 2036.

The board also plans to gradually introduce additional financial instruments, including mutual funds, green bonds, and municipal bonds, to broaden the country’s investment landscape.

SEBON said Nepal’s capital market should evolve beyond being solely a platform for share trading and become an effective channel for mobilizing long-term investment into productive sectors. It believes a stronger corporate bond market will support financing for hydropower, infrastructure, manufacturing, information technology, and other long-term development projects.

The roadmap further outlines plans to boost secondary market trading of bonds, increase the participation of institutional investors, and introduce necessary regulatory reforms to facilitate the orderly expansion of the bond market.

According to the board, a well-developed corporate bond market will enable companies in industry, commerce, and infrastructure to access long-term funding through the capital market while reducing dependence on bank lending.

SEBON also noted that corporate bonds generally offer more stable returns than equities, making them a suitable investment option for investors seeking to reduce exposure to the volatility of the stock market.