stock market in nepal

8/7/2019 STOCK MARKET IN NEPAL

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y Stock market is organized open market for buyingand selling of financial commodities.

y Securities like stock ,debentures, bonds, options and

futures are traded.y Brokers and investors comprises the stock market.

y Only listed companies in stock exchange can trade instock market.



y Located in Singhdarbar Plaza, Kathmandu ,NEPSEopened trading floor on January 13 1994.

y NEPSE is a non profit organization operating under

security exchange act,1983.y Only organized securities trading market of Nepal.

y Only listed companies can trade under NEPSE .

y NEPSE has the licensed dealer for primary and

secondary market.



y Security market began with the flotation of shares of Biratnagar Jute Mills and Nepal Bank Ltd. in 1937.

y Company act was introduced in 1964.

y First government bond was issued in 1964.y Security Exchange Center Ltd. was established in 1976.

y Securities exchange was converted into NEPSE in 1993to reform capital markets.



y It operates on the NEPSE Automated TradingSystem(NATS).

y NATS adopts the principal of an order drivenmarket.

y NEPSE has its own market timings for security trading.

y Settlement is done through T+3 settlementsystem on the basis of paper verses payment.

y NEPSE applies the index circuit breaker system.y It also has price range system that is applicable

only on individual securities.



y Different factors like peace restoration, boost ininvestors confidence etc. affect the growth of NEPSE.

y Total turnover was Rs. 22.82 billion.y First contributor was commercial banks, second

was Hydropower.

y Total capital market capitalization was Rs. 366.24billion .

y NEPSE index increased by 40.9%(lowest 677.9 onjuly18 ,2007to highest 1064.09 on dec 17,2008)



y First adopted on 24 august 2007 at the cost of $300,000.

y ATS helped to eliminate all possible human errors.

y Different features are available through this system, they

are as:

y Better client management.

y Oder entry system for order placement.

y Price of the securities.

y

Execute at facilities.y Conditions for order executions.

y MarketDepth provision.

y Settlement feature.

y Blank transfer mechanism.



y Less liquidity of the stock market or shares.

y Though NEPSE index has increased ,trading of shareshas decreased.

y No investment has yet flowed to share market becauseof the new banking policy.

y Only primary market is f lourishing.

y Government is silent towards the secondary market.

y No trading outside the Kathmandu valley.



y NEPSE is planning to reach to the investors outside theKathmandu valley through brokers.

y It is also planning to introduce the online transaction

for the outside investors.y It is seeking to extend the timeframe of transactions.

stock market in nepal

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