What is a Share / Stock

• A share represents ownership in a company and gives you a claim on its assets and earnings.
• In Nepal, the par value of a share is typically NPR 100, though there are shares with par value of NPR 10.

Markets: Primary vs Secondary

• Primary Market: Where companies issue shares to the public for the first time (IPOs).
• Secondary Market: Where already issued shares are traded between investors.

Key Players & Institutions

• The Nepal Stock Exchange Ltd. (NEPSE) is the marketplace for shares in Nepal.
• It’s governed by the Securities Board of Nepal (SEBON).
• To trade, you’ll need:

1. A bank account
2. A Demat account (for holding shares electronically)
3. A broker account

How Stock Prices are Determined

• The usual supply-and-demand model applies: price goes up if demand > supply, and vice versa.
• Investor perceptions (what people believe will happen), hype, and expectations also play big roles in price movement.

Types of Analysis

• Fundamental Analysis: Examining a company’s financials (balance sheet, dividends, earnings per share, PE ratios, etc.), its management, and its long-term prospects.
• Technical Analysis: Analyzing past price patterns, chart formations, indicators like moving averages, etc., to forecast future price movements. Fundaments are less important here.

Current Situation & Trends in Nepal

• There are over 3.5 million (35 lakh) Demat accounts. Around 60% of those are involved in the primary market.
• About 600,000 (6 lakh) investors are active in the secondary market.
• Nepal’s share market is in a growth phase. Even during crises (e.g. the pandemic), the share market’s index and volume have shown resilience.
• In earlier times, political statements had a big effect on market behavior; more recently, the market has become less sensitive to politics, though political influence still exists.
• Some improvements in infrastructure: e.g. introduction of online systems (TMS), T+2 settlement (trade plus two days settlement) are happening.

Roles & Responsibilities

• Distinction between investors (long-term) and traders (short-term). Both are present in Nepal; currently, traders may be more dominant.
• Risks increase if people act based on hype or social media rather than their own analysis.
• Governing bodies (NEPSE, SEBON) need to be more proactive, providing oversight and ensuring transparency.

Wise Approach & Mindset

• The market doesn’t move in one direction forever: cycles of bull (rising) and bear (falling) markets alternate.
• It’s important to make investment decisions based on your own knowledge, research, and risk tolerance, rather than following others blindly.

Key Takeaways / Advice for Beginners

• Educate yourself: Learn both fundamental and technical analysis so you can choose investment approach(s) that suit you.
• Have the proper accounts: Bank, Demat, and Broker — these are basic requirements.
• Don’t get swayed by hype: Personal research is critical. Social media may exaggerate.
• Think long-term vs short-term: Decide whether you are an investor or a trader (or both) and plan accordingly.
• Be ready for volatility: Market ups and downs are normal; don’t panic.
• Watch governance and regulation: Keep track of what SEBON & NEPSE are doing; better regulation tends to make markets safer.
• Use modern systems & tools: Online trading, T+2 settlement, etc., make things smoother; learn to use them.

- Basics of share market Nepal
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