20 years journey of NEPSE

EVERYTHING YOU NEED TO KNOW ABOUT BROKER COMMISSION AND FEES

Every time you buy or sell shares via your broker or the online platform (TMS), a small monetary amount is deducted as broker commission and other fees.

Nepal Stock Exchange (NEPSE), Securities Board of Nepal (SEBON), and your stock broker all get their operating capital from the fees and commissions that you pay. That is how they are able to provide a platform to buy and sell shares.

Thus, I assume you do not grumble about paying something which is integral for the investing ecosystem. Furthermore, the broker commission was reduced recently, so you have to pay even less for every transaction.

Breakdown of all fees and commission you need to pay

1. Broker Commission (0.27% to 0.4% of the transaction amount)
2. SEBON Fee (0.015% of the transaction amount)
3. Demat Fee (Rs. 25 for each transaction)
4. Capital gain tax (5% of the total profit while selling)

1) Broker Commission

NEPSE favors trading of a large number of shares over a small quantity. This is why the broker commission rate is higher for small transaction amounts.

Transaction of shares worth:

A) upto Rs. 50,000: 0.4% broker commission

B) Rs. 50,000 to Rs. 5,00,000: 0.37% broker commission

C) Rs. 5,00,000 to Rs. 20,00,000: 0.34% broker commission

D) Rs. 20,00,000 to Rs. 1,00,00,000: 0.3% broker commission

E) Amount higher than Rs. 1,00,00,000: 0.27% broker commission

The broker commission is levied while buying as well as selling shares. The rates mentioned above was for shares of listed companies. The rates are lower for trading of mutual funds, bonds, and debentures.

2) SEBON Fee

The Securities Board of Nepal (SEBON) is the caretaker and the patrol police of the stock exchange. We can also call it NEPSE’s quality compliance officer. SEBON is responsible to ensure companies and investors play by the rules.

This entity obviously needs resources and funds to ensure a smooth operation of the Nepalese stock market. To fund its activities, it charges a 0.015% fee for every transaction that you make in NEPSE, both during purchase and sales of securities (shares).

3) Demat Fee

The institution from which you make your Demat account is called the Depository Participant.

Every time you buy and sell the shares, the Depository Participant should ensure that the shares that you buy come in your Demat account and the shares you sell go to someone else’s account.

Investors need to pay a flat Rs. 25 Demat fee in every purchase or sale of securities.

4) Capital Gain Tax

As a citizen of Nepal, you have to pay the government a certain amount of tax on every profit you make.

A capital gains tax (CGT) is a tax on the profit realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property.

In NEPSE, investors have to pay 5% of every profit they make in stocks. Note that CGT is deducted from your profit, not from your transaction amount.

Note:

1. The commission and fees are automatically deducted from your transaction amount. You do not have to get into the hassle of paying fees and commission individually to your broker, SEBON, and NEPSE.
2. Capital Gain Tax is not deducted if you sell your shares at a loss. Also, CGT is not deducted while you buy shares (which is logical).

Let’s finish with a real world example!

Case 1: You buy 10 shares of Company A at Rs. 500 per share

Total transaction amount = Rs. 500 * 10 = Rs. 5,000

a) Broker commission

= Total amount * commission rate for amount less than Rs. 50,000

= Rs. 5,000 * 0.4%

=Rs. 20

b) SEBON Fee

= Total amount * 0.015%

= Rs. 5,000 * 0.015%

= Rs. 0.75

c) Demat Fee

= Rs. 25

Total commission and fees

= Rs. 20 +Rs. 0.75 +Rs. 25

= Rs. 45.75

Total Amount You Need to Pay

= Price of 10 shares of Company A + Commission and Fees

= Rs. 5,000 + Rs. 45.75

= Rs. 5,045.75

Case 2: You then sell the 10 shares of Company A at Rs. 800 per share

Total transaction amount = Rs. 800 * 10 = Rs. 8,000

a) Broker commission

= Total amount * commission rate for amount less than Rs. 50,000

= Rs. 8,000 * 0.4%

=Rs. 32

b) SEBON Fee

= Total amount * 0.015%

= Rs. 8,000 * 0.015%

= Rs. 1.2

c) Demat Fee

= Rs. 25

Total commission and fees

= Rs. 32 +Rs. 1.2 +Rs. 25

= Rs. 58.2

d) Capital Gain Tax

Since you bought at Rs. 500 per share and sold at Rs. 800 per share, you are levied 5% CHT of the profit Rs. 300 on every share

CGT

= Rs. 300 * 5% * No. of shares

= Rs. 300 * 5% * 10

= Rs. 150

Final Amount You Will Get After Selling

= Price of 10 shares of Company A – Commission and Fees – Tax

= Rs. 8,000 – Rs. 58.2 – Rs. 150

= Rs. 7,791.8

Commission and Fees Eat Up Your Profits

Your Gross Profit

= (Rs. 800 – Rs. 500) * 10

= Rs. 3,000 (60% of initial investment)

Your Actual or Net Profit

= Gross Profit – Fees and commission while buying – Fees, commission, and tax while selling

= Rs. 3,000 – Rs. 45.75 – Rs. 208.2

= Rs. 2,746.05 (55% of initial investment)

Open Message to All New Investors:

Open Message to All New Investors: Don't Let The Bull Market Make You A Fool

Article by Sanjeev Sharma

Is the Stock Market a Zero Sum Game?

What is a Zero Sum Game?

A zero sum game is a situation where losses incurred by a player in a transaction result in an equal increase in gains of the opposing player. It is named this way because the net effect after gains and losses on both sides equals zero.

Is the Stock Market a Zero Sum Game?

Investors’ collective performance in the stock market relative to an index is a zero sum game. Since the value of an index includes all gains and losses, it is, by definition, zero sum.

For example, when considering outperforming the market, every outperformance implies an underperformance or loss elsewhere.

However, the entire stock market system should not be thought of as a zero sum game because it does not meet the criteria to be a game with contestants. Only an individual’s performance relative to the stock market index is a game.

What is a Non Zero Sum Game?

A non zero sum game is a situation where there is a net benefit or net loss to the system based on the game’s outcome.

An example of what should be considered a non zero sum game is a contest between a trade ship and a pirate ship, although it may look like one at first glance. Here, a victory for the pirates would mean gains of wealth, resources, and men (probably as prisoners), whereas a win for the trade ship would only mean a defeat of the challenge by the pirates. Here, the prize and losses being different for both the contesting parties do not qualify it as an example of a zero sum game.

Another example could be in financial markets, where competing firms collaborate to expand the overall size of their market. Creating an industry-wide organization would increase confidence in the industry and result in more profit for all competitors.

Non zero sum games don’t have to create a net positive result – it could also be negative as well.  In the pirate example above, there is a case where the pirates win, and it’s a net negative for the whole system.

Investing Vs.Trading

By Swikarya Aganja -
The ABCD of Investing Vs.Trading for a Stock Market Newbie:
Trading implies short-term buy and sale of stocks while investing means a long-term buy and sale of stocks. In general, trading requires technical analysis whereas investing requires a sound knowledge of fundamental analysis.
Fundamental analysis means analyzing a company's fundamental statements, its various ratios, and its future prospects.
Fundamental analysis can be done through various tools such as Price to Earnings (PE) ratio, Earning Per Share (EPS), Dividend Yield Ratio and Price to Book ratio, etc.
PE ratio indicates the number of times investors are ready to pay as compared to earnings. E.g. - If the PE ratio is 10, it means in order to earn 1 rupee, an investor is ready to pay 10 rupees for that share. If the PE ratio is greater than 18, the stock is considered overvalued and PE less than 18 is considered as undervalued. More PE ratio can also mean investors are optimistic that the company is going to progress a lot in the future.
Likewise, Earning Per Share (EPS) is another significantly important tool that indicates the portion of profit allocated to each share. For e.g. - If a company's EPS is Rs. 10, it means one share has earned Rs. 10. The more the EPS, the better the company is considered.
Similarly, the Dividend Yield Ratio refers to the ratio that provides information about how much a company is paying dividends every year relative to its share price. E.g. - if the Dividend Yield Ratio is 2%, it means the company is providing a dividend of 2% of the current price. Thus, fundamental analysis deals with finding out the intrinsic value of a share. It tells an investor which shares to buy. It tells us which companies would give great returns in the longer term.
On the other side of things, technical analysis implies forecasting future price movements based on examination of past price movements. It is all about studying charts, patterns, and trends that suggest what a stock will do in the near future.
Technical analysis involves keeping track of and analyzing indicators like Support/ Resistance, Candlesticks, Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), Fibonacci Retracement, etc. These indicators help in forecasting the trends of the market. E.g. - Different patterns like the cup and handle, head and shoulder, double top, flags, and pennant tell an investor when is the best time to buy and sell a stock. It simply gives information about when to buy, hold and sell stocks.
If you want to invest for the long-term and benefit from the bonus shares, dividends, and rights offering, it is necessary to do fundamental analysis and place your bet on blue-chip companies. Blue-chip companies are companies that provide huge dividend returns, have low volatility, higher growth prospect, stable performance, and good reputation. If you want capital gain (a short-term profit), technical analysis is an important requirement.
Both are good in their own way. It depends on the investor, their risk appetite, and the intensity with which they want to be involved in the investing game. A person having enough time to watch over the Nepse Index can probably do trading whereas a person having scant time can do investing to earn good returns in the longer term. Trading requires ample knowledge about technical analysis while investing requires a shrewd eye for company valuation and fundamental analysis. However, this doesn't mean that technical and fundamental analysis do not go hand in hand. There are investors who study company fundamentals to filter better-performing companies and simultaneously use technical analysis to time their entry and exit.
So, what type of investor do you want to be? Which strategy matches your personality and investment style? How do you feel about the strategies described? The comment section is for you.

Stock Trading Terms Every Trader Needs to Know

Why you should know about Stock Market terminology?

Knowing stock market terminologies can help you better understand markets and make prudent investment decisions. You can accurately gauge market movements and be in control of your investments. At the same time, it helps you analyse expert opinions, read between the lines, and make an informed choice.

Here is a list of some important terms that you should be aware of:

• Bull market

When the stock market as a whole is on the rise for a sustained period of time, it is called as a bull market. During such a rise, investors are typically more optimistic. The opposite of a bull market is a bear market. In such a period, the market witnesses a prolonged decline in value

• Bear market

Bear market reflects a prolonged fall in prices of stocks on a consistent basis. Typically, when stock prices fall by 20% or more from recent highs due to prevailing negative sentiments of investors, markets are said to be in a bearish phase.

Several internal and external factors such as changes in government’s policies, economic downturns, and recession, among others, could lead to a bear market.

• Face value

When a company issues shares, each share has a face value. This refers to the value of the stock at the time of issuance. The company that issues the stock decides the face value and it does not change over time. And in case you hear someone say par value instead of face value, don’t panic. Both terms mean the same thing.

• Bonus shares

As the word indicates, bonus shares are extra or additional shares that a company gives to its shareholders. And yes, they come at no additional cost. The number of bonus shares you get depends on the number of shares you originally own.

For example, imagine that you own a hundred shares of company X. Now, if the company announces a 2:1 bonus, you get two shares free for every share you own. That is, you would get 200 free shares and your total holding rises up to 300 shares.

• Trend

The general direction in which the stock market (or even an individual share) moves is known as trend.

For example, if the market has been rising up for the past one month, you say that the market is on an upward trend. And if it is going down, the market has a downward trend. There is no specific time limit for a trend. A trend can happen for a short term, the medium term, or even the long term.

• Dividend

Dividend is the amount of money a company pays to its shareholders out of its profits. They can be issued in the form of cash, stocks or any other form that the company chooses. A number of companies offer dividends to their shareholders. However, it is not compulsory for a company to give dividends even if it makes a profit. Many companies reinvest their profits back into the business itself for growth and expansion.

• Overvalued stock

When a stock is said to be overvalued, it means that the current price of the stock is considered to be higher than what it should be. You can find out whether a stock is overvalued through certain mathematical metrics such as the Price-to-Earnings ratio. If a stock is considered to be overvalued, the price of the stock is expected to drop down.

• Undervalued stock

An undervalued stock is the opposite of an overvalued stock. It means that a stock is being traded at a value that is lower than its intrinsic value. For example, imagine that the intrinsic value of a stock is Rs 100 but it is being traded at Rs 50/share. Investors try to acquire these stocks in order to get higher returns in the future at lower costs.

• Market breadth

Market breadth is a ratio used in technical analysis to compare the total number of stocks that are rising against the total number of stocks that are falling. The purpose of this technique is to analyse the overall direction in which the stock market is moving.

The formula is as follows:

Market breadth = total number of rising stocks/total number of falling stocks

If the ratio is greater than one, it indicates a positive sentiment or that the market is bullish. A value less than one means negative sentiment or a bearish market.

• Buy/Sell/Hold

This is perhaps the easiest jargon of the lot.

As the name suggests, ‘to buy’ in the stock market means to acquire shares in exchange for money. However, buy also means an analyst’s recommendation to purchase a particular stock.

Similarly, sell means an exchange of existing shares in your portfolio for currency. Or it could indicate an analyst’s recommendation to sell a specific stock in the market.

The concept of hold means that you neither buy nor sell the stock. So, if you already have the stock in your portfolio, then it is best that you continue to hold on to the stock. And if you don’t have the stock, it is best to wait until the volatility dies down and the recommendation changes to ‘buy’.

• Support/Resistance

When it comes to trading in the stock market, the concept of support and resistance are quite popular. The concept basically tells that when the price of a stock reaches a specific predetermined level, it tends to stop and move in the opposite direction. The upper level is known as the resistance and the lower level is known as support.

For instance, imagine that you have bought 200 shares in company Z at Rs 50 each. You are expecting the price to rise. But in the next few months, the stock fails to rise beyond the value of Rs 60. In other words, the stock has hit a resistance level. Similarly, if the stock price does not drop beyond a particular point, it has hit a support level.

In case the resistance level is breached at some point, the stock tends to rise in value until it hits another resistance level.

• Benchmark

How do you know whether a stock’s performance is good or not? You compare it with a benchmark. A benchmark is a standard against which any stock’s performance can be measured. There are different benchmarks available to help you get a good idea of any given stock’s performance. Market indices like BSE Sensex and NSE Nifty are a couple of well known benchmarks.

• Agent

Agent refers to a brokerage firm that acts on your behalf in buying or purchasing shares. Registered with market regulator SEBI, at no point during the transaction, the agent owns the shares.

Prominent agents have their team of researchers and analysts who track every market movement and give you insights on the same. While traditional agents charge a commission on every transaction, discount agents quote a flat fee, irrespective of the volume of transaction.

• Assets

Everything that a company owns on its name are assets. This includes cash, land, technology, etc. Assets reflect the wealth of a company and greater the assets, higher is its value in the market.

Companies build assets over time, and they can be tangible physical goods such as office equipment or intangible like intellectual property

• Blue-chip stocks

Stocks of fundamentally sound companies with robust financials are known as blue-chip stocks. These stocks are better structured to weather market volatility and thus prevent a dip in the corpus.

Returns from blue-chip stocks are stable in the long run, and they are the first to bounce back from a market downturn.

• Board lot

It refers to the standard number of shares defined by stock exchanges as a trading unit. More often than not, it refers to 100 shares.

Avoiding odd lots is the purpose of board lot, and it facilitates easy trading. Other than 100 shares, some of the popular board lots include 50, 500, and 1000 units.

• Bonds

Bonds are fixed-income instruments issued by governments or an organisation. They bear a fixed repayment which needs to be paid on maturity to the investor.

When governments or companies require funds for new projects or maintain ongoing business, they can issue bonds. Bonds are also available as mutual fund units and can help earn a secure and fixed income.

• Call option

It’s a derivative contract between two parties where the buyer gets the right to buy an underlying asset at a pre-defined price and time. However, it’s not an obligation.

Once the buyer exercises the call option, the seller has no other option but to sell the asset at a price initially agreed upon.

• Convertible securities

As the name suggests, convertible securities refer to those securities which can be converted into other securities. Convertible preferred stock is a common convertible security.

It can be converted into a common stock. A convertible security has a lower pay-out than a security that doesn’t have this feature.

• Close price

Close price refers to the final price at which a stock is traded on a given trading day. Stock exchanges have their fixed timings for closing trade for a day.

At the time the closing bell rings, the price at which a stock or security is traded becomes its close price. However, note that the price doesn’t mean the end of trading for a particular stock.

• Current ratio

This ratio indicates a firm’s liquidity position. A company with a high current ratio can better meet its short-term liabilities.

In other words, the company has enough back-up, and its day-to-day workings will not be affected due to the pressure of working capital. This ratio is arrived at by dividing current assets with current liabilities.

• Debenture

A debenture is a form of fixed-income instrument which isn’t backed by any collateral of the issuer. It is often used to issue loans by companies, and as a debenture holder, you become a creditor of the company.

A debenture has a fixed rate of interest, and the interest amount is payable half-yearly or yearly. Issuing it allows the company to get the required funds with ease, without diluting its equity holdings.

• Defensive stock

It is a type of stock that offers stable earning and consistent dividends irrespective of the nature of the stock market. A defensive stock is also known as a non-cyclical stock.

Defensive stocks have a beta less than 1. Having them in your portfolio protects the corpus from eroding in a recession. Though they don’t generate high returns, they provide regular dividends.

• Blue-chip stocks

Stocks of fundamentally sound companies with robust financials are known as blue-chip stocks. These stocks are better structured to weather market volatility and thus prevent a dip in the corpus.

Returns from blue-chip stocks are stable in the long run, and they are the first to bounce back from a market downturn.

• Board lot

It refers to the standard number of shares defined by stock exchanges as a trading unit. More often than not, it refers to 100 shares.

Avoiding odd lots is the purpose of board lot, and it facilitates easy trading. Other than 100 shares, some of the popular board lots include 50, 500, and 1000 units.

• Bonds

Bonds are fixed-income instruments issued by governments or an organisation. They bear a fixed repayment which needs to be paid on maturity to the investor.

When governments or companies require funds for new projects or maintain ongoing business, they can issue bonds. Bonds are also available as mutual fund units and can help earn a secure and fixed income.

• Call option

It’s a derivative contract between two parties where the buyer gets the right to buy an underlying asset at a pre-defined price and time. However, it’s not an obligation.

Once the buyer exercises the call option, the seller has no other option but to sell the asset at a price initially agreed upon.

• Convertible securities

As the name suggests, convertible securities refer to those securities which can be converted into other securities. Convertible preferred stock is a common convertible security.

It can be converted into a common stock. A convertible security has a lower pay-out than a security that doesn’t have this feature.

• Close price

Close price refers to the final price at which a stock is traded on a given trading day. Stock exchanges have their fixed timings for closing trade for a day.

At the time the closing bell rings, the price at which a stock or security is traded becomes its close price. However, note that the price doesn’t mean the end of trading for a particular stock.

• Current ratio

This ratio indicates a firm’s liquidity position. A company with a high current ratio can better meet its short-term liabilities.

In other words, the company has enough back-up, and its day-to-day workings will not be affected due to the pressure of working capital. This ratio is arrived at by dividing current assets with current liabilities.

• Debenture

A debenture is a form of fixed-income instrument which isn’t backed by any collateral of the issuer. It is often used to issue loans by companies, and as a debenture holder, you become a creditor of the company.

A debenture has a fixed rate of interest, and the interest amount is payable half-yearly or yearly. Issuing it allows the company to get the required funds with ease, without diluting its equity holdings.

• Defensive stock

It is a type of stock that offers stable earning and consistent dividends irrespective of the nature of the stock market. A defensive stock is also known as a non-cyclical stock.

Defensive stocks have a beta less than 1. Having them in your portfolio protects the corpus from eroding in a recession. Though they don’t generate high returns, they provide regular dividends.

• Internet Trading

It refers to a trading platform where Internet is the medium. Here, the execution takes place via an order routing system that redirects traders to the exchange trading system.

With the help of the Internet Trading system, investors can conduct trade from any part of the world. Market regulator SEBI approved this trading in 2000.

• Limit order

It refers to the order to buy or sell a security at a pre-defined price. The order is executed only at the specified limit price.

Though a limit order can control execution price, it can result in missed opportunities when the market is moving at an extremely fast pace. Also, it can be used in conjunction with stop order to prevent large losses.

• Market capitalisation

It’s the aggregate valuation of a firm based on the current share price multiplied by the total number of outstanding stocks. For example, if a company has 20 million outstanding shares with the current market price being Rs. 100 per share, the market capitalisation of the company is Rs. 200 crores.

Market capitalisation is one of the most important characteristics that help investors find out the quantum of risk and return in a share.

• Portfolio

Portfolio refers to the overall holding of an individual or enterprise. It includes various types of securities of multiple companies operating in different sectors.

A diverse portfolio helps to ride volatility better and absorb market shocks. As an investor, you must construct your portfolio according to your risk appetite and investment objective.

• Price-to-Earnings Ratio

It is the ratio for valuing a company that measures the current share price to its per-share earnings. This ratio is also known as price multiple or earning multiple.

A high P/E ratio means two things - either the company’s stock is overvalued, or investors expect high growth rate in the future. You can arrive at the PE ratio by dividing the current stock price by earnings per share.

• Stock split

Stock split refers to the increase in the number of outstanding shares by splitting the current ones. Companies do this to enhance the availability of their shares in the market.

The general split ratio is 2:1 or 3:1, which means that one share is split into two or three. A share’s price is also affected by a stock split. It reduces as the number of outstanding shares increases.

• Strike Price

Strike price refers to the price at which a derivative can be bought or sold. In a call option, the strike price is the one when the option holder purchases the security.

On the other hand, for put options, the strike price is one at which the security is sold. Strike price is also known as exercise price.

LEVERAGE= लाभ Usage : Nepal PM wants to deepen ties with China to get more leverage in dealings with India.

Capital Gain Tax Meaning

Capital gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price. Capital gains taxes are only triggered when an asset is realized, not while it is held by an investor. An investor can own shares that appreciate every year, but the investor does not incur a capital gains tax on the shares until they are sold. A capital gain is the difference between the purchase price (the basis) and the sale price of an asset.

What is share market?

In a share market, shares are bought and sold. The stock market is a share market, however besides shares of companies, other instruments like bonds, mutual funds and derivative contracts too are traded in the stock market.

There are two kinds of share markets:

• Primary share market
• Secondary share market

In the secondary market, investors trade already listed securities by buying and selling them. Secondary market transactions are transactions where one investor buys shares from another at the prevailing price. Normally, these transactions are conducted through a broker. Secondary market offers investors a chance to sell all its shares and exit the financial market.
A company enters the primary market to raise funds. It is in the primary market that a company gets registered to issue shares to the public and raise money. Companies generally get listed on the stock exchange through the primary market route. In case a company is selling shares for the first time, it is called an Initial Public Offering or IPO, after which the company becomes public. While going for an IPO, the company has to provide details about itself, its financials, it promoters, its businesses, stocks being issued, price band and so on.

In order to invest in the share market, we will tell you the step-by-step process after which you can be able to be an investor.
First, you will need a bank account, you can open an account as per your convenience but make sure that the company provides Applications Supported by Blocked Amount (ASBA) service.
The second thing you will need is a dematerialised account, simply known as a demat account. Most of the commercial banks in Nepal provide demat account services. Thus, if you have a bank account, you can apply for the demat account which will hold your shares. Besides that, other stockbroker companies also have demat account facilities. If you get dividends from the company you have invested upon, you will receive that in your demat account.
Obtain Meroshare login credentials from the DP holder. You will need to fill a different form for the credentials. Besides, you will also need your customer reference number (CRN), which will also be provided to you by the DP holder. Once you obtain it, you can log in to Meroshare platform from here.
Once you are able to log in to the Meroshare through the web portal, you are ready to invest in the primary market. For that, you will need to wait for any openings of IPOs, FPOs, mutual funds, debentures, or bonds. You can check for openings through various news portals, but make sure such portals update regularly.
Any company which manages your demat account is called depository participant (DP) holder. The DP holder will provide you, the beneficial owner (BO), your beneficial owner identification (BOID) number, which is a unique 16-digit identification number. Normally, a DP holder charges Rs 100 to 150 annually for the management of the demat account.

Investing in share market.

In order to invest in the share market, we will tell you the step-by-step process after which you can be able to be an investor.
First, you will need a bank account, you can open an account as per your convenience but make sure that the company provides Applications Supported by Blocked Amount (ASBA) service.
The second thing you will need is a dematerialised account, simply known as a demat account. Most of the commercial banks in Nepal provide demat account services. Thus, if you have a bank account, you can apply for the demat account which will hold your shares. Besides that, other stockbroker companies also have demat account facilities. If you get dividends from the company you have invested upon, you will receive that in your demat account.
Obtain Meroshare login credentials from the DP holder. You will need to fill a different form for the credentials. Besides, you will also need your customer reference number (CRN), which will also be provided to you by the DP holder. Once you obtain it, you can log in to Meroshare platform from here.
Once you are able to log in to the Meroshare through the web portal, you are ready to invest in the primary market. For that, you will need to wait for any openings of IPOs, FPOs, mutual funds, debentures, or bonds. You can check for openings through various news portals, but make sure such portals update regularly.
Any company which manages your demat account is called depository participant (DP) holder. The DP holder will provide you, the beneficial owner (BO), your beneficial owner identification (BOID) number, which is a unique 16-digit identification number. Normally, a DP holder charges Rs 100 to 150 annually for the management of the demat account.

All About Share market in Nepal

Of late, the public interest in the share market in Nepal is steadily on the rise. At least in Kathmandu, observe people discussing anything, there must be one or two or more persons interested in the share market. But, what is it anyway?
A share, basically, is a unit of the ownership of a company. So buying or selling shares means you are buying or selling the partial ownership of the company. Share market, or the stock market, is where you can buy or sell shares. Usually, public companies issue shares for the public in order to raise their capital, but, besides shares, other instruments like debentures or bonds, and mutual funds are traded in the stock market.
As a shareholder, you can earn a part of the profits earned by those companies through dividends. Although share trade is an exciting opportunity to earn actively or passively, it is risky at the same time as investors may have to bear the loss should the business fail to perform. Thus, as a beginner, it is important that you need to understand the market well before investing your money on shares.
So, here we have for you the basic ideas on the share market’s operation in Nepal.

How to operate Meroshare account?

First, you will need to enter your login credentials including your DP holder, your user ID, and your password.

Then, you enter your dashboard once you log in. Now, you are able to see the values of your shares, opening, and closing IPOs and FPOs, and other basic details.

In order to apply for any of the openings, you need to go to My ASBA on the menu bar where you can get detailed information on offered openings.
Go to the ‘Apply for Issue’ tab on the page, open the details of the IPOs/FPOs, and enter the number of shares you would like to buy, enter your CRN number and apply for the shares.
If the openings are undersubscribed, the company issuing the IPOs/FPOs may reopen or extend their closing date. But, if such openings are oversubscribed, i.e if the number of applications is higher than allocated, shares will be distributed through a lottery.

Nepal Stock Exchange

Nepal Stock Exchange, in short NEPSE, is established under the Companies Act- 2006, operating under Securities Act- 2007. 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 on13th January 1994.
Structure
The current paid-up capital of NEPSE is NRs.50,00,00,000. Government of Nepal, Nepal Rastra Bank,Employees Provident Fund,Rastriya Banijya Bank (former, Nepal Industrial Development Corporation),Laxmi Bank Ltd,Prabhu Bank Ltd  and other securities businessperson (brokers) are the shareholders of NEPSE. The following table shows the percentage of shareholdings by respective shareholders on the capital structure:

S. N.	Shareholders	Ownership (Percentage)	No. of Shares
1	Government of Nepal	58.66	2933122.5
2	Nepal Rastra Bank	14.60	729989.5
3	Employees Provident fund	10.00	500000
4	Rastriya Banijya Bank	6.14	306816
5	Laxmi Bank Ltd	5.00	250000
6	Prabhu Bank Ltd	5.00	250000
7	Others	0.60	30072

History
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
Members of NEPSE are permitted to act as intermediaries in buying and selling of government bonds and listed corporate securities. At present, there are 50 member brokers with 43 branches, who operate on the trading floor as per the Securities Act- 2007, rules and bye-laws. The broker house and its branches are expanded over 21 different cities of Nepal.