Introduction of SEBON and NEPSE

Here, we provide detailed information about the SEBON and NEPSE and their role in the Nepalese stock market. Although SEBON and NEPSE both have their own responsibility, SEBON has to approve the company to trade in NEPSE.

Securities Board of Nepal (SEBON)

SEBON stands for Security Board of Nepal. It was established by the Government of Nepal on 7 June 1993. It regulates the Nepali market under the act securities act of 2006. There are Seven governing members of the management team in SEBON.

It is a committee from different departments like; one member from the ministry of finance, the ministry of law, parliament, and affairs, a representative from Nepal Rastra Bank, one member from chartered accountants institute Nepal, and 2 more from other departments. SEBON is functioning as a regulatory body for the share market, commodity market, forex market.

Registering securities of public limited companies,  provide a license to the public limited companies to trade in the stock market, approving different mutual funds, and monitor and regulate the activities of the stock exchange.

As well as conducting different awareness programs for investors, supervise and monitor the stock market, and suggest the government make the policies related to the market are the major function of the Securities Board of Nepal. Furthermore, the main purpose of SEBON is to protect the investment of investors by mobilizing the fund to develop the overall economy of the country.

Nepal Stock Exchange (NEPSE)

NEPSE stands for Nepal stock Exchange which was established under the Companies Act-2006, operating under securities Act-2007. Free marketability and liquidity to the government and corporate securities are the basic objectives of NEPSE.

The trading floor of NEPSE was opened on 13th January 1994. The history of the securities market began with the floatation of shares by Biratnagar Jute Mills Ltd. And Nepal Bank Ltd. in 1937 AD. The first issuance of Government Bond in 1964 and the establishment of Securities Exchange Center Ltd. in 1976 was another significant development relating to capital markets.

Government of Nepal, Nepal Rastra Bank, Employee provident Fund, Laxmi Bank Limited, Rastriya Banijya Bank Limited, Prabhu Bank Limited, others have 58.66%, 14.60%, 10.00%, 6.14%, 5.00%, 5.00%, and 0.60% respective shareholders of NEPSE capital structure.

The members of NEPSE can buy and sell the share and commodities of listed securities. In Nepal, brokers do transactions under the securities Act- 2007. There are 43 branches of stock Broker in Nepal which are expanded into 21 different cities of Nepal (NEPSE, 2021).

The different categories are registered in NEPSE: commercial bank, development bank, finance company, a microfinance company, corporate debentures, government bond, hotel and tourism, hydropower, investment, life insurance, and non-life insurance, manufacturing products, mutual funds, and others.

Commercial Banks:

Currently, there are 27 commercial banks in Nepal, and all of them are listed in NEPSE. The Commercial Bank category is the most traded shares in NEPSE as compare to another category. High outstanding shares and good fundamental statistics are the major reason for high investment in commercial banks.

S.N.SymbolBank NameListed SharesPaid-up capital
1NMBNMB Bank Limited  163,259,616.00  16,325,961,600.00  
2SBLSiddhartha Bank Limited  109,622,991.00  10,962,299,100.00  
3NCCBNepal Credit & Commerce Bank Limited  103,145,642.00  10,314,564,200.00  
4KBLKumari Bank Limited  138,784,752.00  13,878,475,200.00  
5LBLLaxmi Bank Limited  106,956,900.00  10,695,690,000.00  
6MBLMachhapuchchhre Bank Limited  90,531,086.00  9,053,108,600.00  
7EBLEverest Bank Limited  88,937,168.00  8,893,716,800.00  
8NBBNepal Bangladesh Bank Limited  90,053,152.00  9,005,315,200.00  
9SBINepal SBI Bank Limited  94,935,968.00  9,493,596,800.00  
10HBLHimalayan Bank Limited  106,844,008.00  10,684,400,800.00  
11SCBStandard Chartered Bank Nepal Limited  85,722,307.00  8,572,230,700.00  
12NIBNepal Investment Bank Limited  162,573,295.00  16,257,329,500.00  
13NABILNabil Bank Limited  134,801,584.00  13,480,158,400.00  
14CZBILCitizens Bank International Limited  116,620,409.00  11,662,040,900.00  
15PCBLPrime Commercial Bank Limited  160,830,369.00  16,083,036,900.00  
16SRBLSunrise Bank Limited  94,879,445.00  9,487,944,500.00  
17ADBLAgricultural Development Bank Limited  109,899,299.00  10,989,929,900.00  
18SANIMASanima Bank Limited  96,815,192.00  9,681,519,200.00  
19MEGAMega Bank Nepal Limited  146,549,649.00  14,654,964,900.00  
20CBLCivil Bank Limited  86,436,608.00  8,643,660,800.00  
21CCBLCentury Commercial Bank Limited  88,572,840.00  8,857,284,000.00  
22NBLNepal Bank Limited  126,367,586.00  12,636,758,600.00  
23GBIMEGlobal IME Bank Limited  216,325,030.00  21,632,503,000.00  
24NICANIC Asia Bank Limited  115,640,054.00  11,564,005,400.00  
25PRVUPrabhu Bank Limited  113,470,574.00  11,347,057,400.00  
26BOKLBank of Kathmandu Limited  96,581,764.00  9,658,176,400.00  

According to the report from Sharesansar, among the top 30 Nepalese companies, more than 75% are commercial banks. High-paid-up capital, good consistency in dividend and bonus share distribution, transparent banking system, accessibility are the major reasons for counting commercial banks as a blue-chip company.

Development Bank:  

There are altogether 17 “B” level banks in Nepal including regional and national level development banks. Before 2 years, There were more than 70 “B” level banks in Nepal but new regulation from Nepal Rastra Bank about minimum paid-up capital many banks were merged and acquisition by other financial institution.

S.NSymbolBank NameListed SharesPaid-up-capital
1MDBMiteri Development Bank Limited  7,973,770.00  797,377,000.00  
Garima Bikas Bank Limited  
36,759,128.00  3,675,912,800.00  
Jyoti Bikash Bank Limited  
38,448,228.00  3,844,822,800.00  
4KRBLKarnali Development Bank Limited  5,028,300.00  502,830,000.00  
5NABBCNarayani Development Bank Limited  1,312,338.00  131,233,800.00  
6EDBLExcel Development Bank Limited  8,111,213.00  811,121,300.00  
7SADBLShangrila Development Bank Limited  27,369,724.00  2,736,972,400.00  
8MNBBLMuktinath Bikas Bank Limited  48,115,508.00  4,811,550,800.00  
9CORBLCorporate Development Bank Limited  4,100,000.00  410,000,000.00  
10SINDUSindhu Bikas Bank Limited  5,574,560.00  557,456,000.00  
11SHBLSahara Bikas Bank Limited  1,633,670.00  163,367,000.00  
12SHINEShine Resunga Development Bank Limited  34,084,640.00  3,408,464,000.00  
13GRDBLGreen Development Bank Limited  5,190,000.00  519,000,000.00  
14MLBLMahalaxmi Bikas Bank Limited  33,424,028.00  3,342,402,800.00  
15KSBBLKamana Sewa Bikas Bank Limited  
16LBBLLumbini Bikas Bank Limited  29,064,536.00  2,906,453,600.00  
17SAPDBLSaptakoshi Development Bank Limited  8,343,384.00  834,338,400.00  

Some of the development like GBBL, EDBL, Muktinath Bikas Bank Limited is the blue-chip stock for investor in this category.

Finance Company: 

It is licensed by Nepal Rastra Bank under the “C” category. This kind of institution collects money from small depositors and invests them as a loan to promote agriculture and productivity.

S.NSymbolBank NameListed SharesPaid-up-capital
1NFSNepal Finance Limited  3,055,512.00  305,551,200.00  
2BFCBest Finance Company Limited    8,289,140.00  828,914,000.00  
3LFCLalitpur Finance Limited  2,368,747.00  236,874,700.00  
4GFCLGoodwill Finance Company Limited  8,672,000.00  867,200,000.00  
5PFLPokhara Finance Limited  9,631,458.00  963,145,800.00  
6UFLUnited Finance Limited  10,408,346.00  1,040,834,600.00  
7SIFCShree Investment Finance Company Limited  8,901,349.00  890,134,900.00  
8CFCLCentral Finance Limited  8,810,357.00  881,035,700.00  
9JFLJanaki Finance Company Limited  6,004,111.00  600,411,100.00  
10SFCLSamriddhi Finance Company Limited  5,459,409.00  545,940,900.00  
11CMBCapital Merchant Banking & Finance Limited  9,351,695.00  935,169,500.00  
12SFFILSrijana Finance Limited  9,630,602.00  963,060,200.00  
13GMFILGuheswori Merchant Banking & Finance Limited  8,640,000.00  864,000,000.00  
14ICFCICFC Finance Limited  10,237,847.00  1,023,784,700.00  
15CFLCrystal Finance Limited  700,000.00  70,000,000.00  
16MPFLMultipurpose Finance Company Limited  4,000,000.00  400,000,000.00  
17PROFLProgressive Finance Limited  8,001,000.00  800,100,000.00  
18MFILManjushree Finance Limited  9,653,949.00  965,394,900.00  
19RLFLReliance Finance Limited9,156,578.00  915,657,800.00  
20GUFLGurkhas Finance Limited  8,679,937.00  867,993,700.00  

ICFC, GUFL, MFIL are the blue-chip shares in finance category stock. Good financial companies have good financial statistics, a good management team, and good return history for their shareholders.

Microfinance Company:

The micro-finance company listed in NEPSE under the ‘D’ category of the bank.  There are 49 microfinance are listed in NEPSE with their own symbol. Also, this category of financial institution’s share market is expensive as compared to another banking category. So, limited outstanding shares and high chances of bonus and dividend distribution is the major reason of being price high.

Almost all microfinance are in the profit range however, Nirdhan Utthan Laghubitta Bittiya Sanstha Limited(NUBL), Chhimek Laghubitta Bittiya Sanstha Limited(CBBL), Swabalamban Laghubitta Bittiya Sanstha Limited(SWBBL) are the dominant and blue-chip company in the microfinance sector of Nepal.

In conclusion, SEBON and NEPSE are the main body, who regulate the stock market of Nepal. Both SEBON and NEPSE are playing significant role to develop the overall Nepalese market.

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