Secondary Capital Market of Nepal: Assessing the Relationship Between Share Transaction and NEPSE Index

Under the Securities Act 2006, the Nepal Stock Exchange (NEPSE) has been responsible for operating the secondary market with the goals of enlisting publicly issued securities, providing liquidity to the overall capital market, encouraging securities trading of listed government and organized companies through brokers, intermediaries, and market makers, and supporting the overall development of the country by increasing securities' transactions and promoting a reliable environment in the capital market. NEPSE was established in 1994, and at the time, the trading system was based on an open outcry system, with 62 companies and 25 brokers. The establishment of a semi-automated system on August 24th, 2007, was a significant change in the Nepalese secondary market. Currently, NEPSE has expanded the number of brokerage houses to 50, and more than 222 companies are listed. Although the secondary capital market in Nepal is experiencing growth, there is still room for expansion and development to meet present needs.