The Nepal Stock Exchange (NEPSE) has a relatively short history, having been established in 1993 as a semi-governmental organization. However, the development of the Nepalese capital market can be traced back to the early 1980s when the government of Nepal first allowed the private sector to issue shares and debentures.
In the early years, NEPSE operated as a manual trading floor, with stockbrokers and dealers meeting in a designated location to execute trades. However, with the growing number of listed companies and investors, NEPSE recognized the need for a more efficient and transparent trading platform.
In 2007, NEPSE introduced a fully automated trading system called the ‘Computerized Trading System (CTS).' This system allowed investors to place buy and sell orders for securities electronically, reducing the time and cost involved in executing trades. The CTS also enabled NEPSE to provide real-time market data to investors, improving transparency in the securities market.
NEPSE has undergone several changes and upgrades since its establishment, including the introduction of online trading platforms and mobile apps, and the implementation of stricter regulations and compliance requirements. In 2017, NEPSE introduced a new market surveillance system to monitor trading activities and detect potential market manipulation.
Despite facing challenges such as limited investor education and a lack of quality information about listed companies, NEPSE has shown steady growth over the years. The number of listed companies and investors has increased, and the market capitalization of NEPSE has grown significantly. In 2021, NEPSE achieved record highs in the NEPSE index, indicating growing investor confidence in the Nepalese stock market.
Overall, the Nepal Stock Exchange has played a crucial role in the development of the Nepalese capital market, providing a platform for companies to raise capital and for investors to invest in securities. As the Nepalese economy continues to grow, NEPSE is expected to play an even more critical role in promoting capital formation and wealth creation in the country.
