Nepal Stock Exchange LTD is shortened as NEPSE. Nepse was founded in 2006 under the Companies Act and operates under the Securities Act of 2007. On January 13, 1994, NEPSE launched its trading floor. NEPSE is a government-owned substance that is registered under the Companies Act.
NEPSE is the stock trade market in Nepal where you can buy and sell shares in the secondary market.
The primary goal of NEPSE is to provide government and corporate assets with free marketability and liquidity by enabling transactions on its trading floor through members, market intermediaries, such as brokers and market makers.
What is Sebon?
The Nepal Government established the Securities Board of Nepal (SEBON) as an apex regulator of securities markets on June 7, 1993. Under the Securities Act of 2006, it has been in charge of the market. SEBON's functions include enforcing important securities regulations and directives, registering public company securities, and adjusting and systematizing the issue, transfer, sale, and alternate of registered shares, among other things. Only SEBON-registered groups are allowed to offer their shares on the primary and secondary markets. It has influence over Nepal's Nepse and Broker.
The stock exchange's primary function is to facilitate the trading of listed securities. Nepse has been working to register publicly traded securities on the secondary market so that it can be traded easily.
NEPSE is a specialized government-owned company that is established under the Companies Act. It complied with the Securities Act of 1933. Its major goal is to assist the country's economic growth by facilitating capital generation and mobilization, as well as to protect investors' interests by creating a secondary market for the trading of securities issued by the Nepalese government and organizations.
Nepse has been a leading regulatory body in terms of market operations, listed companies, and securities dealers, in order to achieve its goal of trading shares, bonds, mutual fund units, and other securities through member brokers.
The Nepal Stock Exchange currently offers regular investors the ability to buy and sell securities through 50 member brokers and 41 Remote Work Stations (RWS) located around the Kathmandu Valley and outside of Kathmandu valley. Nepal's capital market is in its early phases of growth due to its size, kind of company, financial instruments to be exchanged, laws and regulations, technology utilized for business, other physical infrastructure, workforce, and so on.
Nepse, on the other hand, is a founding member of the South Asian Federation of Exchanged and now serves on its Executive Board. It is also an Affiliate Member of the World Federation of Exchanges, with plans to become a full member in the near future.
NEPSE's current paid-up capital is NRs.50,000,000. The shareholders of NEPSE include the Government of Nepal, Nepal Rastra Bank, Employees Provident Fund, Rastriya Banijya Bank (formerly Nepal Industrial Development Corporation), Laxmi Bank Ltd, Prabhu Bank Ltd, and various securities businesspersons (brokers). The percentage of shareholdings by various shareholders on the capital structure is shown in the table below:
|S. N.||Shareholders||Ownership (Percentage)||No. of Shares|
|1||Government of Nepal||58.66||2933122.5|
|2||Nepal Rastra Bank||14.60||729989.5|
|3||Employees Provident fund||10.00||500000|
|4||Rastriya Banijya Bank||6.14||306816|
|5||Laxmi Bank Ltd||5.00||250000|
|6||Prabhu Bank Ltd||5.00||250000|
How does NEPSE Works?
NEPSE is calculated or work using many indices such as:
Let’s describe about this Topic
The market value weighted index is known as the Nepse index. This index shows the increase or decrease of total market capitalization of companies' transactions that are recorded in Nepal Stock Exchange.
It's an index based on the market capitalization of companies in the "A" category.
The Float Index measures the number of shares that are actively traded. It displays the current supply of any share on the market. Because the NEPSE has yet to identify a system for determining the float in public shares, the float index uses the ordinary shares of all listed companies to calculate its index price.
Float sensitive index
The public/ordinary shares of companies that are eligible for the sensitive index are included in the float sensitive index. Only ordinary shares of high-performing stocks are included in the float sensitive index, which helps investors understand where the larger businesses are headed.
Sub-indices of Nepse
The sub-indices provide the information regarding each sector that is identified by NEPSE.
Functions of Nepse
1. Continuous and ready market for securities
For the buying and sale of securities, the Nepal stock exchange provides a ready and continuous market. It provides a convenient means of purchasing and selling stocks. NEPSE also serves as a sales outlet/counter for listed securities.
2. Facilitates evaluation of securities
Nepse is helpful in determining the value of industrial securities. This allows investors to determine the real value of their assets at any moment. Comparison of companies in the same industry is possible through NEPSE quotations (i.e price list).
3. Encourages capital formation
Nepse accelerates the process of capital formation. It inculcates in the investing class the habits of saving, investing, and taking risks, as well as converting their money into profitable investments. It serves as a tool for capital formation. It also acts as a channel for proper (safe and profitable) investment.
4. Provides safety and security in dealings
NEPSE provides safety, security and equity (justice) in dealings as transactions are conducted as per well-defined rules and regulations. The managing body of the exchange keeps control on the members. Fraudulent practices are also checked effectively. Due to various rules and regulations, stock exchange functions as the custodian of funds of genuine investors.