How To Invest In Nepal Share Market

How To Invest In Nepal Share Market – The number of investors in Nepal’s stock market has increased significantly. In the space of one year, the number of IPO applicants has almost tripled in number.

However, most of the new investors seem to be active only in Nepal’s main market. That means they only know how to apply for an IPO (Initial Public Offering). Most of them have no idea how to invest in the secondary market in Nepal. I have received many questions from friends and others about how they can invest in the secondary market. I want to help them with this article.

How To Invest In Nepal Share Market

How To Invest In Nepal Share Market

Before I begin, you should know the basics of the stock market. I have written some articles in the past on this topic. If you haven’t checked them out, you probably should. It will give you the idea of ​​the following:

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I briefly talked about the secondary stock market and the steps to invest in this market in the previous articles (#2). In this article I will talk about it in more detail.

How To Invest In Nepal Share Market

First, what is the secondary market? It is the market where investors can trade shares in companies listed on the Nepal Stock Exchange (NEPSE). When you first buy shares in the main market through an IPO, the shares are not listed on NEPSE. Only after the allocation process are the shares listed.

When the share is listed and the first trade takes place, a new price is set for the relevant share.

How To Invest In Nepal Share Market

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So when a buyer agrees to buy the stock at a certain price requested by the seller, that price becomes the LTP (Last Traded Price) of the stock (

). Now, if you want to buy that stock, you have to set a price close to the LTP. The LTP at the end of market hours will be the closing price of the stock for that day.

How To Invest In Nepal Share Market

Although this has already been discussed in my previous post, I will share it again for you

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If you have invested in IPOs, you probably have a Demat account in your name. A demat account is an account to store your shares, just like a bank account is an account to store your money. It is mandatory to have a Demat account to invest in the stock market. To open a Demat account, you can go to one of the companies licensed by SEBON as a Depository Participant (DP). Generally, banks, commercial banks and stock brokers are allowed to open a Demat account for their customers. These companies will charge a certain fee for opening your Demat account. The DP will provide you with your Demat Account Number (also known as BOID) and MeroShare credentials.

How To Invest In Nepal Share Market

A MeroShare account is an account that gives you access to your shares electronically. This account allows you to view the details of your stock holdings and the current value of your portfolio. In addition, it also provides access to your transaction history and purchase sources. Application of IPOs, FPOs, rights shares etc. can also be done through your MeroShare account. Your MeroShare account is usually opened along with your Demat account if you specify it clearly while filling your Demat account form. To access your MeroShare account, go to and log in with your DP credentials.

If you are going to buy/sell shares in the secondary market, you need a stock broker account. A stockbroker buys and sells stocks on behalf of clients. Currently there are around 50 traders in Nepal. You can find the right stockbroker and open an account with them. Some traders are also licensed as DP, which means you can open your Demat account, MeroShare account and trader account at the same place.

How To Invest In Nepal Share Market

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A trading account gives you access to an online system, known as a Trade Management System (TMS), where you can enter your buy/sell orders yourself. You do not need to call your broker to place the order. You can open your trading account at the brokerage office itself. Your trader will provide you with the process and other details required for the trading account. Brokers usually ask for collateral when you open a trading account with them. Collateral is essentially an amount of collateral (either cash or check) that allows you to buy shares worth four times the amount you gave as collateral to the broker. For example, if you want to buy shares worth Rs. 1, 00, 000 through the trading account, you have to enter an additional amount of Rs. NOK 25,000 to broker.

(It is better to call the stockbroker and ask them about the process of opening a stockbroker and trading accounts. Different brokers have different ways of doing this. Some allow you to open a trading account online while others ask you to visit their office and submit the documents. Usually the required documents are KYC Form, Citizenship Copy, DP Confirmation Letter, TMS Agreement Form and Security Check.The documents will also be available on the broker’s website.)

How To Invest In Nepal Share Market

It is quite obvious that you need money to buy shares. The bank account will be linked to your Demat account, MeroShare account and stock broker account. If you buy an IPO, the amount will be automatically deducted from your bank account which you have linked with your Demat/MeroShare account. However, in the secondary market, you can pay your broker from any of your bank accounts. A bank account is also required when receiving cash dividends. The dividend amount will automatically be credited to your respective bank account.

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The first thing you need to do is choose a stock you are interested in buying or selling. Next, you need to find out the current trading price for that stock. You can do this in the market depth section of the NESPE website or that of TMS. You can also see the number of stock orders (quantity) that buyers and sellers place for the stock in question.

How To Invest In Nepal Share Market

Once you have chosen your stock, you must also decide how much of the stock you want to buy and at what price. Before you order, you must be aware of the price and quantity. This is for buying and selling. In case of selling, you obviously need the shares in your Demat account before selling it. Otherwise, it will not be a valid order.

There are two different ways you can invest in the secondary market – online and offline. The offline method is where you call your stockbroker to place your orders to execute the transaction.

How To Invest In Nepal Share Market

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Once you have selected the desired share and decided on the price/amount, you should call your stockbroker and ask them to place the order for you. Make sure you set the price by looking at the LTP and the bid/ask prices in the market depth. By doing this, you will have a high chance of making the transaction happen. If the transaction does not go through during the day, your order will be canceled and you will have to place a new order again the next business day.

Your broker will notify you via text/phone call/email at the end of the business day if the transaction goes through. You can also check this with TMS if you shop online.

How To Invest In Nepal Share Market

The online method is where you enter the buy/sell order yourself through TMS. Make sure you have opened a TMS account and that it is activated. To buy shares, you must have sent the margin amount to your broker. You do not need collateral to sell shares.

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To enter buy/sell orders through TMS, you need to know how to use the system. You can learn it in this video in detail.

How To Invest In Nepal Share Market

EDIS stands for Electronic Deposit Instruction Slip. This is used to transfer the shares in your Demat account to the broker’s account. EDIS is only required when you sell your shares. You do not need to use EDIS when you buy shares.

Sharing a transfer through EDIS is done through your MeroShare account. You must follow certain steps in your MeroShare account to complete the exchange transfer process. Watch this video to understand the entire process in detail.

How To Invest In Nepal Share Market

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BUY: If you have bought shares, you must pay your broker within a few days. You can do this either by sending a check or via an online medium such as ConnectIPS. The broker will credit the shares to your Demat account within 5-7 days of the transaction

SELL: If you have sold shares, first transfer the shares from your Demat account to the broker’s account through EDIS. You can collect your check from the broker within 5-7 days of the transaction. You can also ask them to pay you through ConnectIPS.

How To Invest In Nepal Share Market

I hope this article has been helpful for those who are in doubt about the process of investing in the secondary market in Nepal. Make sure you have

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