September 30, 2022 | Investopaper
Nepal Stock Exchange (NEPSE) is the only stock exchange of Nepal. It is located in Singha Durbar Plaza, Kathmandu, Nepal.
The government had set up a security buying and selling center in Nepal in 2033 BS. The same center transformed into Nepal Stock Exchange Limited (NEPSE) in 2050 BS.
Nepal Stock Exchange (NEPSE) opened its trading floor on 13 January 1994 (29 Poush, 2050). It is the only stock exchange of Nepal. The total market capitalization of the companies listed on NEPSE is approximately Rs 2.66 trillion [As of September 29, 2022].
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Objectives of Nepal Stock Exchange (NEPSE)
The main purpose of the stock exchange is to trade the listed securities. NEPSE has been working to register the publicly issued securities in the secondary market for easy trading. This action is called listing.
Nepal Stock Exchange Limited (NEPSE) is a specialized government-owned entity registered under the Companies Act. It operates in accordance with the Securities Act. Its main objective is to contribute to the economic development of the country through capital formation and mobilization and to promote the interest of investors by providing a secondary market for the trading of securities issued by the Government of Nepal and organizations.
In line with its objective of trading shares, bonds, mutual fund units and other securities through member brokers, Nepse has been playing the role of a leading regulatory body in terms of market operations, listed companies and securities dealers.
At present, Nepal Stock Exchange is providing facility of buying and selling the securities to general investors through 50 member brokers and 41 Remote Work Stations (RWS) in major cities inside and outside Kathmandu Valley . The broker house and its branches are expanded over 21 different cities of Nepal. Due to the size of the market, nature of business, financial instruments to be traded, rules and regulations, technology used for business, other physical infrastructure, manpower, etc., Nepal’s capital market is in the early stages of development.
Similarly, Nepse is a founding member of the South Asian Federation of Exchanges and is currently an Executive Board Member. It is also an Affiliate Member of World Federation of Exchanges and is taking initiative to take full membership soon.
Share Ownership In Nepal Stock Exchange
Nepal Stock Exchange (NEPSE) in promoted by Government of Nepal. The Nepal Government has 58.65 percent ownership in NEPSE.
The table below presents the major shareholders of Nepal Stock Exchange (NEPSE) . It also incudes in ownership in percentage.
|S.No||Shareholders||Share Ownership (%)|
|1||Government of Nepal||58.65|
|2||Nepal Rastra Bank||34.6|
|3||Rastriya Banijya Bank||6.12|
Board of Directors of Nepal Stock Exchange
The Board of Directors (BOD) of Nepal Stock Exchange (NEPSE), constitutes of members representing different sectors as per Securities Act 2006. At Present, the BOD constitutes 2 Members including a chairman from Nepal Government, 2 Members from Nepal Rastra Bank, 1 from Rastriya Banijya Bank. Moreover, one member will be nominated by BOD as an expert in capital market. General Manager of NEPSE will serve as a director on the BOD.
NEPSE index is the market value weighted index. This index shows the aggregate growth in capitalization of companies listed in Nepal Stock Exchange.
Nepse Index reached its all-time high of 3,198.60 on August 18, 2021.
Index calculated from the market capitalization of companies classified under group “A” is called sensitive index.
Sub Indices In Nepse
The sub-indices in Nepse include:
2. Development bank
5. Manufacturing And Processing
6. Hydro Power
7. Non Life Insurance
8. Life Insurance
9. Hotels and Tourism
10. Mutual Fund
Works Done By Nepal Stock Exchange (NEPSE)
Provides a market platform for buying and selling of secondary shares, debentures and bonds.
Develops and expands the secondary market in the capital market by supporting the policy and guidelines of the Government of Nepal.
Regulates listed companies, brokers and investors.
Spreads public awareness about capital markets.
Regulates and monitors the listed public limited companies.
Take membership with national and international capital market organizations.
List new companies to trade on the stock exchange, as well as OTC companies that are not listed or disbanded.
Development and expansion of the capital market by increase the number of institutions involved in the market.
Runs a clean, transparent, credible, fair market and works in the interest of investors.
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