How to start Investment in the Share Market in Nepal?

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How to Invest in the Share Market in Nepal: A Beginner’s Guide



Investing in the share market has become increasingly popular in Nepal as more people look for ways to grow their savings and build long-term wealth. With the growth of the Nepal Stock Exchange (NEPSE), even beginners can start investing with proper knowledge and planning. This article explains, step by step, how you can start investing in the share market in Nepal.

1. Understand the Share Market in Nepal

The share market in Nepal is regulated by the Securities Board of Nepal (SEBON), and all trading takes place through the Nepal Stock Exchange (NEPSE). Companies listed on NEPSE issue shares that the public can buy and sell. When you buy shares, you become a part-owner of that company.

Shares in Nepal are mainly categorized as:

  • Banking and Financial Institutions

  • Hydropower Companies

  • Insurance Companies

  • Hotels, Manufacturing, Trading, and Others

Understanding these sectors helps you choose companies based on risk and return.

2. Get a Demat Account

A Demat (Dematerialized) Account is mandatory to invest in the Nepali share market. It holds your shares in electronic form.

Steps to open a Demat account:

  1. Visit a bank or capital company (DP – Depository Participant).

  2. Fill out the Demat account opening form.

  3. Submit required documents:

    • Citizenship certificate

    • Passport-size photos

  4. Pay the nominal account opening fee.

Once approved, you will receive a Demat account number, which is essential for trading shares.

3. Open a Trading Account

A Trading Account allows you to buy and sell shares through the NEPSE online system (TMS – Trading Management System).

To open a trading account:

  • Choose a licensed stock broker in Nepal.

  • Submit KYC documents along with your Demat details.

  • Get your TMS login credentials.

After this, you can trade shares online from your computer or mobile.

4. Open a Bank Account (with C-ASBA Facility)

You need a bank account that supports C-ASBA (Applications Supported by Blocked Amount) to apply for IPOs and FPOs.

This bank account is linked with:

  • Demat account

  • MeroShare account

Make sure your bank details are updated correctly to avoid transaction issues.

5. Create a MeroShare Account

MeroShare is an online platform provided by CDS & Clearing Ltd. It is used to:

  • Apply for IPOs, FPOs, and right shares

  • View share holdings

  • Check application status

You can create a MeroShare account through your Demat service provider.

6. Learn Basic Share Market Concepts

Before investing, understand some basic terms:

  • IPO (Initial Public Offering): First sale of shares to the public

  • Secondary Market: Buying and selling shares through NEPSE

  • Bonus Share: Free shares given from company profit

  • Dividend: Cash or share reward given to shareholders

  • Bull Market: Market going up

  • Bear Market: Market going down

Learning these concepts reduces risk and improves decision-making.

7. Start with IPO Investment

For beginners in Nepal, IPOs are considered relatively safe because:

  • Shares are usually offered at face value (Rs. 100)

  • Risk is lower compared to secondary market trading

Apply IPOs through MeroShare, and once allotted, shares will be credited to your Demat account.

8. Invest in the Secondary Market

After gaining confidence, you can start trading in the secondary market.

Tips for secondary market investment:

  • Study company financial reports

  • Analyze past performance and future potential

  • Avoid rumors and social media hype

  • Invest for the long term instead of daily trading

Long-term investors often benefit more from dividends and price appreciation.

9. Manage Risk Wisely

Share market investment always involves risk. To reduce risk:

  • Do not invest all money in one company

  • Diversify across different sectors

  • Invest only surplus money

  • Be patient and avoid emotional decisions

Never invest money meant for emergencies or daily expenses.

10. Tax and Charges in Nepal

Investors should also be aware of taxes and charges:

  • Capital Gain Tax (CGT):

    • 5% for long-term investors

    • 7.5% for short-term investors

  • Broker commission and DP charges apply during transactions

Understanding costs helps you calculate real profit.

Conclusion

Investing in the share market in Nepal is not difficult if you follow the right steps and stay informed. Start by opening a Demat and trading account, learn the basics, and invest with a long-term vision. With discipline, patience, and continuous learning, the share market can become a powerful tool for wealth creation in Nepal.

Disclaimer: This article is for educational purposes only and not financial advice. Always do your own research before investing.

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