Nepal Stock Exchange

The history of securities market began with the flotation of shares by Biratnagar Jute Mills Ltd. and Nepal Bank Ltd. in 1937. Introduction of the Company Act in 1964, the first issuance of Government Bond in 1964 and the establishment of Securities Exchange Center Ltd. in 1976 were other significant development relating to capital markets.

Securities Exchange Center was established with an objective of facilitating and promoting the growth of capital markets. Before conversion into stock exchange it was the only capital markets institution undertaking the job of brokering, underwriting, managing public issue, market making for government bonds and other financial services. Nepal Government, under a program initiated to reform capital markets, converted Securities Exchange Center into Nepal Stock Exchange in 1993.

Currently, Total Market Capitalization is रू295,500 crore (US$25.22 billion) (2021).

The current paid-up capital of NEPSE is NPR 500,000,000 (approximately US$4.2 million in October 2020). The following table shows the percentage of shareholdings by the respective shareholders on the capital structure:[6]

Members are permitted to act as intermediaries in buying and selling of government bonds and listed corporate securities. At present, there are 50 member brokers who operate on the trading floor as per the Securities Act, 2063 (2007), Securities Regulation, and by-law.

Subindex/indces of Nepse are categorised as follows:[1]

1. Banking
2. Development Bank
3. Finance
4. Microfinance
5. Manufacturing and Processing
6. Hydropower
7. Non Life Insurance
8. Life Insurance
9. Hotels
10. Mutual Fund
11. Trading
12. Other

Nepse started trading at the secondary market from 100 points on January 1994. The highest point of indices is 1915.39 & Lowest point is 293.

1. Shares
   1. Equity Shares
   2. Preference Shares
2. Debentures
3. Government Bonds
4. Mutual Funds

NEPSE operates on the ‘NEPSE Automated Trading System ‘(NATS), a fully screen based automated trading system, which adopts the principle of an order driven market. Purchase & Sell of Physical as well as dematerialized securities is done through NATS.

Trading on equities takes place on all days of week (except Saturdays and holidays declared by exchange in advance). On Friday only odd lot trading is done.

The market timings of the equities are:- Market Open: - 11:00 AM Market Close: - 15:00 PM

Odd Lot Trading is done on Fridays. For Odd Lot Trading Market Timings are Market Open: - 11:00 AM Market Close: - 15:00 PM

Friday and Saturday Market remain Closed.

Note:- The exchange may however close the market on days other than schedule holidays or may open the market on days originally declared as holidays. The exchange may also extend, advance or reduce trading hours when it deems fit necessary.

The index-based circuit breaker system applies at 3 stages of the NEPSE index movement of 4%, 5% and 6%.These circuit breakers when triggered bring about a trading halt in all securities.

In case of 4% movement either way, there would be a market halt for 20 minutes if the movement takes place during first hour of trading i.e. 12:00 PM. In case this movement takes after 12:00 PM there will be no trading halt at this level and market shall continue trading.

In case of 5% movement either way, there would be a market halt for 40 minutes if the movement takes place before 13:00 PM. In case this movement takes after 13:00 PM there will be no trading halt at this level and market shall continue trading.

In case of 6% movement in either way, trading shall be halted for the remainder of the day. No trading shall be done for the day after 6% of movement in NEPSE.

There are two credit rating agencies i.e. ICRA Nepal and Care Ratings Nepal that do ratings of the companies. There are 32 merchant banker companies operating in Nepal

• Official website