History Of Share Market In Nepal

September 20, 2020 | Investopaper

The share market of Nepal has been in existence for a relatively short span. Since the formal trading of securities started after the establishment of Nepal Stock Exchange (NEPSE) in 2050, the stock market of Nepal is only 27 years old. However, the trading of shares started unofficially in Nepal after Biratnagar Jute Mills and Nepal Bank Limited issued shares to the public in 1995 BS. At that time, there were no issue manager and stock exchange. Both the companies had managed the issue and sale of shares themselves.

After Biratnagar Jute Mills and Nepal Bank, no other institution entered the capital market for many years. Meanwhile, for the first time since the Companies Act came implementation , government issued bonds in 2021 BS. However, a systematic mechanism and body for trading securities had not been established till then.

After the establishment of Securities Exchange Center in 2033 BS, the capital market of Nepal was organized. Significant development of the secondary market was expected in Nepal after the establishment of the center. But, the necessary legal and institutional infrastructure was not available for the center to function as planned. To make the role of the center effective, Securities Exchange Act was formulated in 2040 BS. The first amendment of the Act was made in 2043 BS.


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In 2050 BS,  Securities Exchange Center transformed into Nepal Stock Exchange (NEPSE) after the amendment of Securities Trading Act 2040. After that, regular trading has started from Poush 29, 2050 with the calculation of the Nepse index. Similarly, Securities Board of Nepal (SEBON) was also established as an autonomous body to regulate securities transactions. In the same year 2050, NCM Mutual Fund, Nepal’s first mutual fund, came into existence.

With the objective of improving capital market operations and making securities trading easier in the secondary market, the government implemented the “Securities Act 2063”. Similarly, the Securities Market Operation Regulation 2064 was also introduced to manage the capital market. At present, Nepal’s capital market and securities trading are guided by these laws and regulations.

For nearly 14 years since the establishment of Nepse, securities trading took place through open-out cry system. Only since Bhadra 2063, the trading through computerized automated system started.

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The major changes took place after the establishment of  central depository system (CDS) in 2067 BS. CDS and Clearing started the work of making the stock market more paperless in the field of technology. This dematerialized the company’s share certificates and made it possible to trade shares through a demat account. It also contributed greatly to making the primary market completely paperless. Since Magh 1, 2075 CDS & Clearing has started trading of demat shares only.

Similarly, Nepal Stock Exchange started online share trading from Karthik 20, 2075 which has brought the share market into the new era of computerized trading. With the recent introduction of Demat, C-Asba and Mero Share and online trading of shares, the trading has become relatively easy.

Currently, Nepal Stock Exchange is the only stock exchange in Nepal for securities trading. Along with this government-owned stock exchange, the private sector is also awaiting permission to operate the stock exchange.

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Important Events In Share Market Of Nepal

Before 2000 BS

Issue of shares of Biratnagar Jute Mills and Nepal Bank Limited [1995]

2000-2049 BS

Establishment of Securities Exchange center [2033]

Formulation of Securities Exchange Act [2040]

Commencement of trading of securities listed under the Securities Exchange Act [2041]

Issue of shares of Rastriya Beema Company [2042]

First Amendment to the Securities Exchange Act [2049]

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2050-2059 BS

Establishment of Nepal Stock Exchange Limited, Nepse [2050]

Establishment of Securities Board of Nepal, Sebon [2050] 

Launch of Nepal’s first mutual fund ‘NCM’ [2050 ]

2060-2069 BS

Government debentures start trading in Nepse [2063]

Issue Of Securities Act [2063]

Start Of computerized trading of securities [2064]

Adoption the policy of Circuit Breaker and Trading Halt [2064]

Live transmission of trading details through website [2064]

Trading time increased to three hours [2064]

Start of trading of promoter shares [2064]

Transformation of Nepal Stock Exchange into a for-profit organization [2065]

Establishment of OTC Market [2065]

Start of share trading from outside the valley through brokers [2066]

Establishment of Central Depository System CDSC [2067]

Establishment of ICRA Nepal, the first credit rating company in Nepal [2069]

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Start Of Trading Of Dematerialized securities [2071]

Full implementation of trading of demat securities [2072]

Development Of Nepse App [2073]

Trading time increased to four hours [2073]

Market Depth available for view to the general public [2073]

Asba system implemented in primary share offerings [2073]

Mandatory 10 shares allotment for application in Primary Share Issue [2074]

Development of C-Asba system [2074]

Establishment Of Second Credit Rating Company- Care Rating Nepal [2074] 

Implementation of Electronic DIS slip, EDIS [2075] 

Online Share Trading [2075]

Launch Of Mero Share Mobile App [2077]

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3 thoughts on “History Of Share Market In Nepal

  • June 2, 2021 at 10:35 am

    Date haru mistake xa yesma

    • September 19, 2021 at 2:55 pm

      please inform me about the real dates. i need for the research work

  • July 21, 2022 at 12:02 pm

    latest event haru ni update garnu paryo investopaper jiu


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