VIDEO: IDEAPERNUAR NEPAL
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.1,00,00,00,000. 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 58,66,000
2 Nepal Rastra Bank 9.5 9,50,000
3 Employees Provident fund 10.00 10,00,000
4 Rastriya Banijya Bank 11.23 11,23,000
5 Laxmi Bank Ltd 5.00 5,00,000
6 Prabhu Bank Ltd 5.00 5,00,000
7 Others 0.60 60,000
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.