Nepal Stock Exchange (NEPSE) is Nepal’s sole stock exchange. NEPSE is located in Kathmandu’s Singha Durbar Plaza. It was formed under the Company Act of 2006 and is governed by the Securities Act of 2007. The Nepalese government created a Securities Exchange Centre as a buying and trading facility in 2033 B.S. The Securities Exchange Center’s principal goal was to encourage the expansion of capital markets. The center handled all activities connected to brokering, underwriting, addressing difficulties, and providing financial services. Later, in 2050 B.S., the same location was changed into the Nepal Stock Exchange with the goal of growing the capital market.
Biratnagar Jute Mills Pvt. Ltd. launched Nepal’s securities market in 1937 by floating its share. This sparked the growth of Nepal’s secondary market. In 1964, the first government bond was issued.
|S. No.||Shareholders||Ownership (Percentage)||No. of Shares|
|1.||Government of Nepal||58.66||2,933,122.5|
|2.||Nepal Rastra Bank||14.60||729,989.5|
|3.||Employees Provident Fund||10.00||500,000|
|4.||Rastriya Banijya Bank||6.14||306,816|
|5.||Laxmi Bank Limited||5.00||250,000|
|6.||Prabhu Bank Limited||5.00||250,000|
The NEPSE’s primary goal is to manage the trading of listed securities. NEPSE is in charge of company listing. The term “listing” refers to the process of registering all publicly traded securities on the secondary market. The NEPSE’s ultimate purpose is to contribute to the country’s economic growth. NEPSE focuses on capital generation and stimulates secondary market investors to accomplish economic growth. NEPSE is a government-owned organization that operates under the Security Act. It serves as the Nepalese economy’s economic mirror. NEPSE assists listed or listing firms in raising funding. The NEPSE provides the necessary information on the investment and profit. NEPSE seeks to safeguard both the buyer and seller in order to ensure fair trading of financial products.
NEPSE’s principal mission is to control the trading of stocks, bonds, mutual funds, and other securities. The trading of securities is done through brokers. NEPSE serves as a regulatory authority, supervising market operations, listed firms, and securities dealers. To reduce fraud activities, rules and regulations are in place. NEPSE has 50 member brokers and 43 remote workstations for buying and selling stocks. NEPSE hopes to transfer public savings through these members towards beneficial investments.
Roles of NEPSE
Any stock exchange can play a variety of economic purposes. The NEPSE’s duties are centered on the secondary market trading of securities.
NEPSE serves an important function as a ready market for the trading of used securities. NEPSE controls and promotes the liquidity of securities investment and trading in the secondary market. It is Nepal’s sole regulating agency for the trading of securities.
In Nepal, the NEPSE is the most secure way to trade securities. NEPSE oversees the main and secondary markets and serves as a control or regulatory agency. All listed firms must adhere to certain standards, making it impossible for corporations and brokers to meddle with the standards. As a result, NEPSE is risk-free for investors, businesses, and traders alike.
NEPSE controls the securities of several publicly traded corporations. NEPSE, Nepal’s sole stock exchange, determines the price of various securities based on the interaction of demand and supply. NEPSE investigates any anomalies in market functioning. NEPSE is in charge of price adjustments under any circumstances.
Capital Formation Agency
NEPSE is Nepal’s capital formation agency. It entices people’s funds to be invested in various ventures. NEPSE unites investors, firms, and traders and is a key player in market liquidity. NEPSE is a haven for enterprises seeking to raise funds from the general public. NEPSE also encourages consumers to save more and invest in securities.
Industrial and Commercial Development
NEPSE is an important player in the growth of Nepal’s industry and trade. People use NEPSE to move investment from ineffective to efficient enterprises. Companies can seek public funding for expansion initiatives, with NEPSE serving as a key player.
Reflector of the Company
NESPE represents the country’s political, economic, and social situation. The price of securities is affected by the environment. The purchase and sell process in the stock market represents all of the behavioral intents of market participants, i.e. the participants’ assessment of trading businesses. NEPSE oversees the business environment for evaluation.
Maintain Business Data
Companies listed on the NEPSE are required to submit NEPSE with financial statements, annual reports, and other related information. The information provided by such firms can be valuable to the general public, investors, and the government in making investment and economic strategies, as well as other informed decisions.
Nepal Stock Exchange Participants
At the moment, NEPSE is the sole intermediary in charge of overseeing the buying and selling of securities. NEPSE has 50 member brokers with a total of 43 branches. Brokers have offices in 21 Nepalese cities. In NEPSE, there are numerous classifications of securities, i.e. sub-indices. Commercial banks, development banks, microfinance, hydropower, investment, life and nonlife insurance, bonds, mutual funds, and others are among the several types. There are now 223 businesses listed on the Nepal Stock Exchange (NEPSE). The following are the primary NEPSE participants:
Stockbrokers are individuals who are authorised to purchase and sell stocks. They serve as a conduit between the stock market and investors.
Underwriters are primary market intermediaries that take on the obligation of subscribing to public offerings that are not purchased by investors.
Issue and Sales Managers:
The issue and sales manager is in charge of issuing and underwriting public securities. Issue managers are in charge of advising the firm on capital structuring, capital gearing, and financial planning.
Security traders (Investment Bankers):
They are primarily responsible for managing individuals’ portfolios. They are in charge of purchasing and selling stocks and other trading commodities on a stock market.
The government owns 58.66% of the NEPSE, with the rest shareholders being Nepal Rastra Bank, commercial banks, and others. They are all stakeholders in NEPSE and hence actively participate in its operation and decision-making.