Nepal Stock Exchange
|Nepal Stock Exchange|
|Currency||Nepali rupee (NPR)|
|No. of listings||370 (Scrips)|
|Market cap||US$ 10.78 Billion (8/18/2014)|
The Nepal Stock Exchange Limited (abbreviated as NEPSE) is the only Stock Exchange of Nepal. It is located in Singha Durbar Plaza, Kathmandu Nepal. On March 23, 2014 the equity market capitalization of the companies listed on NEPSE was approximately US$ 7896 million.
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 on April 4, 2013, the number of listed companies are 334, which includes Commercial Banks, Hydro Power Companies, Insurance Companies and Finance Companies among others. The Exchange has 59 registered brokers as of April 2013. The NEPSE Index is primary all equity market index of NEPSE.
It is regulated by the Securities Board of Nepal.
The history of securities market began with the floatation 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.
Members of NEPSE are permitted to act as intermediaries in buying and selling of government bonds and listed corporate securities. At present, there are 23 member brokers and 2 market makers, who operate on the trading floor as per the Securities Exchange Act, 1983, rules and bye-laws.
Besides this, NEPSE has also granted membership to issue and sales manager securities trader (Dealer). Issue and sales manager works as manager to the issue and underwriter for public issue of securities whereas securities trader (Dealer) works as individual portfolio manager.
Securities Available For Trading
A. Shares • Equity Shares • Preference Shares B. Debentures C. Government Bonds
NEPSE operates on the ‘NEPSE Automated Trading System ‘(NATS), a fully screen based automated trading system, which adopts the principle of an order driven market. Purchase & Sell of Physical Share certificates is done through NATS.
Trading on equities takes place on all days of week (except Saturdays and holidays declared by exchange in advance). On Friday only odd lot trading is done.
The market timings of the equities are:- Market Open: - 12:00 Hours Market Close: - 15:00 Hours
Odd Lot Trading is done on Fridays. For Odd Lot Trading Market Timings are Market Open: - 12:00 Hours Market Close: - 13:00 Hours
Note:- The exchange may however close the market on days other than schedule 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 3%, 4% and 5%.These circuit breakers when triggered bring about a trading halt in all equity.
In case of 3% movement either way, there would be a market halt for 15 minutes if the movement takes place during first hour of trading i.e. 13:00 hours. In case this movement takes after 13:00 hours there will be no trading halt at this level and market shall continue trading.
In case of 4% movement either way, there would be a market halt for half an hour if the movement takes place before 14:00 hours. In case this movement takes after 14:00 hours there will be no trading halt at this level and market shall continue trading.
In case of 5% movement in either way, trading shall be halted for the remainder of the day.