Stock Market in Nepal

Introduction to stock market

The economic activities in Nepal were adversely affected by the global Covid-19 pandemic. Nepal Stock Exchange (NEPSE), the only stock market in Nepal was also hampered by its effect and had to close its transactions. In general, the unit of ownership of an organization is a ‘stock/share’ Where an individual buys or sells the partial ownership of the company. Mostly, public organizations issue shares for the public to increase their capital investment. Apart from that, other financial instruments such as debentures, bonds, and mutual funds are also trade in the stock market. With the overwhelming participation of investors in the primary market, 61 brokering offices have been actively participated in trading. Even though NEPSE was bearish for the past few years, it has now uplifted towards a bullish trend. There are many share market investment advisory in Nepal that help and support new investors.

How Stock market work in Nepal

Under the Securities Act, 2006, the Securities Board of Nepal (SEBON) regulates the stock market in Nepal. The SEBON which is the government body is responsible for the necessary security regulations and directives. Organizations that approve and register by SEBON can only list their shares in the primary and secondary markets. Individuals can trade their shares/stock accordingly in these two markets. The companies issue shares, debentures or bonds, and mutual funds directly in the primary market at a base price. It is an initial public offering or IPO where the organizations sell their shares for the first time.

Similarly, organizations that want to issue new shares. But shares/stock that are already list in the stock market, can release new shares on FPO or follow-on public offering. Likewise, organizations can also issue the right shares for the already existing shareholders at the base price. Individuals require a bank account and a Demat account to invest in the stock market. The account can be open with the assistance of commercial banks or from the stockbroker companies.

Stock Market Investment

It is always essential for Individuals to first understand how the market functions before starting on stock market. They can actively or passively engage themselves in the primary or secondary market and earn from the stock markets. A support or advice from share market investment advisory in Nepal is a good way to begin with. One can buy stocks from the secondary market. And can earn dividends, bonuses, and even sell them at a profitable market rate. However, like all other investments, investing in the stock market is subject to market risks. It is also important for individuals to read the necessary documents carefully. Analyzing the risks before investing in the stock market is extremely important.