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Beginner’s Guide: Basics to know before starting investment in Share Market?

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Basics to know before starting investment in Share Market

The stock market in Nepal has gained popularity over the past couple of years. There was a spike in the number of people involved in the stock market during Covid when people needed jobs but, could not leave the house.

NEPSE(Nepal Stock Exchange) looks over the transactions of the securities by allowing a trading platform for people. It is the only stock exchange platform in Nepal. The market capitalization of the companies listed on NEPSE has reached Rs. 330,765.9 crore as of January 2024. 

Here are the basics to know before starting investment in Share Market and how you can begin your trading journey:

1. Fulfill basic requirements for share trading

Fulfill basic requirements for share trading

You will have to fulfill the basic requirements of share trading. You need to have a bank account, a Demat account, and a Meroshare account, that will allow you to apply for an IPO (Initial Public Offerings) online. You should open a TMS/broker account to start trading in the secondary market.

2. Understand the types of Share Market

types of Share Market

The stock market in Nepal can be divided into two markets: 

  • The Primary Market: In simple terms, the primary market is where the stock units are issued to the general public. The primary market consists of very less risks. For example: Apply for IPOs (Initial Public Offerings).
  • The Secondary Market: The secondary market is where you can buy and sell the shares. You need to open a broker account to start trading. You can appoint a broker to buy or sell shares for a small fee. Any transaction is not possible without a broker.

3. Know about owing shares

Know about owing shares

Shares are the smallest unit of a company. So, buying a share means you are purchasing a portion of the company. There are many benefits of owning a share of a companyThis gives you the authority to take part in the company’s decision-making and you are also entitled to receive part of the profit the company earns in the form of bonus shares or cash dividends.

4. Know about your investment options

Know about your investment options

Entering the share market, you need to know what your investment options are. Nepal has several investment options for investors like:

  • IPO: IPO or Initial Public Offering is the first offering made by a private company to the general public and becomes a publicly traded company. IPOs are often used by companies to raise capital for expansion, growth, or other financial needs of the company.
  • FPO: The FPO stands for Follow On Public Offering. It is done when the company who already issued its IPOs needs additional funds. It is a public issue made after a successful Initial Public Offering.
  • Mutual Funds: A mutual fund is a fund gathered by investors to create a diversified portfolio. It money pooled is invested by professional investors in different companies in different sectors and the profit is shared. It lowers your risk and is a safe option for beginners.
  • Bonds: Unlike shares, the bond is just a loan taken by a company or the government. There are five different government bonds – Development Bonds, Citizen Saving Bonds, Foreign Bonds, Special Bonds, and National Saving Bonds. You receive interest annually on the bonds.

5. Know about the right share

Right shares are the shares that are offered to the existing shareholders. When the company listed in NEPSE issues shares again, it offers the existing shareholders the first right to purchase the share. It is issued when the company feels the need to raise capital again. 

6. Knowing about share auction

Share auction is the process of selling the shares to the highest bidder. During margin calls or regulatory requirements, the exchange announces auctions to sell the share.

It allows you to discover the price of the share and makes trading more efficient in the stock market.

The stock market may seem scary for beginners but, be patient and keep learning to understand it. Once you understand the ways of the stock market, you will become more familiar and the easier will it be to make your investment choices. The first step is being curious about the market, the rest will follow through with time.

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FAQs

How many people invest in the stock market in Nepal?

According to Nepal Rastra Bank’s Financial Inclusion Survey, 23.9% of the country’s population holds investments in the share market.

Is the bonus issue a primary or secondary market?

It is issued in the primary market.

How can I buy shares in Nepal?

You can buy shares in the primary market and the secondary market in Nepal.

What is the tax on shares in Nepal?

The tax on capital gains from shares is 5% for residents and 10% for non-residents.

What is the concept of right shares?

The right share is given to the company’s existing shareholders.

How do you buy shares at an auction?

At an auction, the buyer enters competitive bidding and the seller offers competitive offerings. The highest bid wins.

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Chhyangdi Hydropower Extends Deadline for Rights Share Application | Until 27th Ashad

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Chhyangdi Hydropower

The deadline for the ongoing rights share issue of Chhyangdi Hydropower Limited (CHL) has been officially extended until 27th Ashad, 2082. The issue had originally opened on 23rd Jestha, 2082, with an earlier closing date set for 12th Ashad, 2082.

Key Details of the Rights Share Issue

Details Information
Total Right Shares Issued 3,869,775 units (1:1 ratio)
Face Value per Share Rs. 100
Total Issue Amount Rs. 38.69 Crore
Current Paid-up Capital Rs. 38.69 Crore
Post-Issue Paid-up Capital Rs. 77.39 Crore

As per the Central Depository System and Clearing Limited (CDSC), 23,503 applicants have applied for 2,317,902 units (worth Rs. 23.17 Crore) as of yesterday.

Eligibility and Application Process

Only those shareholders who held shares before the book closure date of 2nd Jestha, 2082, are eligible for this right share offering.

Interested shareholders can apply through:

  • Global IME Capital Limited, Naxal, Kathmandu (Issue Manager)
  • Designated branches of Global IME Bank Limited across Lamjung, including Besisahar, Sundarbazar, Bhulbhule, Siundibar, Udipur, and Dordhi
  • Any C-ASBA-approved banks and financial institutions
  • Online via “MeroShare”.

Applicants are advised to complete the process before banking hours on 27th Ashad, 2082 (Friday).

Important Note:

Payments must be made through an account payee cheque drawn in the name “GICL-BOK-CHHYANGDI RIGHT SHARE”, as per the instructions from Global IME Capital Ltd.

Contact Information

Notice: Chhyangdi Hydropower Extends Deadline for Rights Share Application 

Notice of Chhyangdi Hydropower Extends Deadline for Rights Share Application

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Election Commission Preparing to Announce By-Election Date | Voter Registration Now Open

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The Election Commission of Nepal has begun preparations for by-elections to fill vacant positions at various levels of government. As part of this process, the Commission is urging all eligible Nepali citizens who have not yet registered their names in the voter list to do so immediately.

According to the Assistant Spokesperson of the Election Commission, Mr. Durga Prasad Chalise, individuals will not be allowed to register in the voter list once the election date is officially announced. Therefore, he emphasized the importance of early registration to avoid being left out.

The Election Commission recently held discussions with the Prime Minister, Mr. KP Sharma Oli, and the Acting Chief Election Commissioner, Mr. Ram Prasad Bhandari. They talked about setting a date for the by-elections. The main focus was on two key areas: Rupandehi Constituency No. 3 for the House of Representatives and Manang Province Assembly Constituency No. 1 (B). Elections in these regions are likely to be held in the second week of Kartik.

The position in Rupandehi became vacant after the passing of Rastriya Prajatantra Party MP Deepak Bohora. In Manang, the seat became empty after provincial assembly member Deepak Manange was sent to jail. In addition to these, more than a dozen ward chairman positions are also currently unoccupied in various local governments.

The Election Commission has issued a public notice dated 2082/03/11 (Nepali calendar) urging all citizens to register in the voter list immediately. The notice mentions that, according to Clause 4(2)(2) of the Voter List Act, 2073, voter registration will be stopped as soon as the election date is declared.

Hence, this is a final chance for anyone who missed earlier opportunities to register. The Commission has made a heartfelt appeal to all brothers and sisters across the country to take this opportunity seriously and get their names included in the voter list.

The Election Commission assures that the upcoming elections will be conducted fairly and freely, in line with its guiding principle:
“Free and Fair Election: Pride of the Nation.”

For more information or assistance, people can visit the official website of the Election Commission at www.election.gov.np or contact their office at Kantipath, Kathmandu.

Notice: Election Commission Preparing to Announce By-Election Date

Notice of Election Commission Preparing to Announce By-Election Date

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Birgunj Customs Office Collects Highest Revenue from Petroleum Imports

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Birgunj Customs Office Collects Highest Revenue from Petroleum Imports

The Birgunj Customs Office has collected the highest revenue from the import of petroleum products in the first 11 months of the current fiscal year 2081/82. According to the office, a total of NPR 73.18 billion was collected in revenue from petroleum imports alone.

During this period, Nepal spent about NPR 174.09 billion to import five different types of petroleum products. These petroleum imports contributed 46.43% of the total revenue collected from the top 20 imported items, making it the most important source of income for the customs office.

Major Revenue Contributors from Imports

Major Revenue Contributors from Imports

What Officials Say

Customs Chief Administrator Deepak Lamichhane stated that petroleum products and vehicle imports are the main sources of customs revenue at Birgunj. He highlighted that these two sectors consistently contribute the highest share of government income collected through imports.

Conclusion

The data from the Birgunj Customs Office shows that fuel and vehicles remain Nepal’s most heavily imported and taxed items. With more than 46% of the revenue coming from petroleum alone, any changes in fuel prices or import volumes can significantly affect national customs revenue.

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