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Nepal Stock Exchange
नेपाल स्टक एक्स्चेन्ज लि
Nepal Stock Exchange logo.png
TypeStock Exchange
LocationKathmandu, Nepal
Founded1993
OwnerNepal Government (58.66%)
Nepal Rastra Bank (14.60%)
Employees Provident Fund (10%)
Other shareholders (16.74%)
Key peopleKrishna Bahadur Karki (CEO)
CurrencyNepalese rupee (NRS)
No. of listings193[1]
Market capरू408,600 crore (US$34 billion) (as of 2 February 2022)[2]
IndicesNEPSE Index
Websitewww.nepalstock.com.np Edit this at Wikidata

The Nepal Stock Exchange (NEPSE) is the only stock exchange of Nepal. It is located in Singha Durbar Plaza, Kathmandu, Nepal. As of 8 February 2021, the equity market capitalization of the companies listed on NEPSE was approximately US$30 billion. It is regulated by the Securities Board of Nepal.[citation needed]

The basic objective of NEPSE is to impart free marketability and liquidity to the government and corporate securities by facilitating transactions in its trading floor through member, market intermediaries, such as broker, market makers etc. NEPSE opened its trading floor on 13 January 1994. As of 16 March 2021, the number of listed companies is 285, which includes Commercial Banks, Hydro Power Companies, Insurance Companies and Finance Companies among others.[3] The Exchange has 97 registered brokers as of April 2021.[4]

History

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.

Structure

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:[5]

S.No Owners Ownership (%)
1 Government of Nepal 58.66
2 Nepal Rastra Bank 14.60
3 Employees Provident Fund[6] 10.00
4 Rastriya Banijya Bank 6.14
5 Laxmi Bank 5.00
6 Prabhu Bank 5.00
7 Others 0.60

Indices

The NEPSE Index is the primary all-equity-market index of the Nepal Stock Exchange.[citation needed]

Market Timings

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

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

Pre-Market: - 10:30 AM - 10:45 AM

Market Close: - 15:00 PM

Odd Lot Trading is done daily basis. 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 scheduled 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.

Index-based Circuit Breakers

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.

References

  1. ^ "Listed Securities". NepalStock.com.np. Retrieved 2022-02-02.
  2. ^ "Nepal Stock Exchange". NepalStock.com.np. Retrieved 2022-02-02.
  3. ^ "Nepal Stock Exchange Ltd". www.nepalstock.com. Retrieved 2020-10-27.
  4. ^ "Nepal Stock Exchange Ltd". www.nepalstock.com. Retrieved 2020-10-27.
  5. ^ "Introduction | About Us". NepalStock.com. Retrieved 2020-10-27.
  6. ^ "EPF Proposes to Buy All NEPSE Shares to NRB". Eng.Merolagani.com. Retrieved 2020-10-27.