NEPSE share

NEPSE: Things to Know About Share and Stock?

  • blog
  • 04th Jun, 2021
NEPSE share

What is Share or Stock?

In a simple explanation, Stocks are a method of growing wealth. You possess a share of the firm that issued the stock when you invest in it. Ordinary people can invest in some of the world's most successful companies through stocks. You possess a share of the firm that issued the stock when you invest in it. Stocks are a tool for businesses to raise money from the public to fund expansion, new goods, and other projects.

Stocks are the more general phrase used to name a share of a company's ownership. In general terms, Share has a special meaning: it frequently refers to the portion of a specific corporation. As a result, if someone states she owns shares, some individuals may answer, Shares in what Company?

What is NEPSE?

The Nepal Stock Exchange (NEPSE) was founded in 2006 under the Companies Act and works under the Securities Acts of 2007. The primary goal of NEPSE is to provide Government and Corporate assets for free attractiveness and liquidity on its trading floor. NEPSE members, marketing services agencies are the main trading floor. On January 13, 1994, NEPSE started its trading floor.

How is NEPSE structured?

NEPSE's current paid-up capital is NRs. 50,000,000. NEPSE is owned by the Government of Nepal, Nepal Rastra Bank, Employees Provident Fund, Rashtriya Banijya Bank, Laxmi Bank Ltd, Prabhu Bank Ltd, and other securities agents. The percentage of shareholdings by several sharers on the capital structure is shown in the table below:

S.N.ShareholderOwnershipNo. of Share
1.Government of Nepal58.662933122.5
2.Nepal Rastra Bank 14.60729989.5
3.Employees Provident Fund10.00500000
4.Rastriya Banijya Bank 6.14306816
5.Laxmi Bank Ltd 5.00250000
6.Prabhu Bank Ltd.5.00250000
7.Others 0.6030072

History of NEPSE

The flotation of shares by Biratnagar Jute Mills Ltd. and Nepal Bank Ltd. in 1937 marked the start of the securities market. Other notable developments in capital markets include the introduction of the Company Act in 1964. The first issuing of Government Bonds in 1964, and the formation of Securities Exchange Center Ltd. in 1976.

The Securities Exchange Center was the only capital markets institution doing stock exchange work. In 1993, the Nepal Government changed the Securities Exchange Center into Nepal Stock Exchange.

Who are the members of NEPSE?

NEPSE members are allowed to operate as brokers in the purchase and sale of government bonds and publicly traded corporate securities. Currently, 50 member brokers with 43 branches operate on the trading floor following the Securities Act of 2007, its rules, and bye-laws. The broker house and its branches have spread across Nepal's 21 cities.

Current situation of NEPSE

Economic activity in Nepal has been halted for the past month and a half because of COVID-19. The NEPSE also is in disarray: On March 22, all online and physical operations. For a certain time, the market was closed for some time but, it has opened now. The last transaction before lockdown had a total volume of about Rs. 19.4 Crore and the index has risen to over 1250 points. On 4 June 2021, NEPSE has touched its all-time highest point (2856.67) with a transaction of more than Nrs. 16.9 Arba.

However, when the pandemic began to strangle the Chinese Economy. The stock market began to fall until the lockdown was declared. The situation has now deteriorated to the point where investors are unsure which way the market will trend once it re-opens for business. Thinkings of disaster are circulating as the world's main stock markets struggle. Every area of the economy is in pain, and it's difficult to estimate the economic assumptions of the struggle. No one knows when the pandemic will stop. As a result, it's become critical to examine the potential effects of the outbreak. To provide for expected market attacks from both managers and retail participants.

Some Reports From NEPSE

According to NEPSE's annual report, banks and financial institutions are the most important members. More than 65% of the total market capitalization, supported by insurance companies (15%), hydropower (5%), manufacturing (3%), hotels (1.7%), and trading (1.7%).

Last week, NEPSE had its best week ever in terms of closing. Over 1.5 million people applied for Nepal Infrastructure Bank Limited (NIFRA IPO )'s (initial public offering), which was Nepal's largest IPO ever. Not only that, but almost 1.1 million people applied for the 100,000 shares in Chandragiri Hills Limited's initial public offering. These recent examples demonstrate that the Nepalese stock market attracts a large number of people. While many expected stock prices to fall as a result of Covid-19, they have risen from 1,200 to 2,300 after the market reopened on May 12, 2020.

After going with this blog, you might have an interest, to begin with. We have a blog on "Tips for beginner to get into NEPSE".