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.
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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.
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.||Symbol||Bank Name||Listed Shares||Paid-up capital|
|1||NMB||NMB Bank Limited||163,259,616.00||16,325,961,600.00|
|2||SBL||Siddhartha Bank Limited||109,622,991.00||10,962,299,100.00|
|3||NCCB||Nepal Credit & Commerce Bank Limited||103,145,642.00||10,314,564,200.00|
|4||KBL||Kumari Bank Limited||138,784,752.00||13,878,475,200.00|
|5||LBL||Laxmi Bank Limited||106,956,900.00||10,695,690,000.00|
|6||MBL||Machhapuchchhre Bank Limited||90,531,086.00||9,053,108,600.00|
|7||EBL||Everest Bank Limited||88,937,168.00||8,893,716,800.00|
|8||NBB||Nepal Bangladesh Bank Limited||90,053,152.00||9,005,315,200.00|
|9||SBI||Nepal SBI Bank Limited||94,935,968.00||9,493,596,800.00|
|10||HBL||Himalayan Bank Limited||106,844,008.00||10,684,400,800.00|
|11||SCB||Standard Chartered Bank Nepal Limited||85,722,307.00||8,572,230,700.00|
|12||NIB||Nepal Investment Bank Limited||162,573,295.00||16,257,329,500.00|
|13||NABIL||Nabil Bank Limited||134,801,584.00||13,480,158,400.00|
|14||CZBIL||Citizens Bank International Limited||116,620,409.00||11,662,040,900.00|
|15||PCBL||Prime Commercial Bank Limited||160,830,369.00||16,083,036,900.00|
|16||SRBL||Sunrise Bank Limited||94,879,445.00||9,487,944,500.00|
|17||ADBL||Agricultural Development Bank Limited||109,899,299.00||10,989,929,900.00|
|18||SANIMA||Sanima Bank Limited||96,815,192.00||9,681,519,200.00|
|19||MEGA||Mega Bank Nepal Limited||146,549,649.00||14,654,964,900.00|
|20||CBL||Civil Bank Limited||86,436,608.00||8,643,660,800.00|
|21||CCBL||Century Commercial Bank Limited||88,572,840.00||8,857,284,000.00|
|22||NBL||Nepal Bank Limited||126,367,586.00||12,636,758,600.00|
|23||GBIME||Global IME Bank Limited||216,325,030.00||21,632,503,000.00|
|24||NICA||NIC Asia Bank Limited||115,640,054.00||11,564,005,400.00|
|25||PRVU||Prabhu Bank Limited||113,470,574.00||11,347,057,400.00|
|26||BOKL||Bank 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.
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.N||Symbol||Bank Name||Listed Shares||Paid-up-capital|
|1||MDB||Miteri Development Bank Limited||7,973,770.00||797,377,000.00|
Garima Bikas Bank Limited
Jyoti Bikash Bank Limited
|4||KRBL||Karnali Development Bank Limited||5,028,300.00||502,830,000.00|
|5||NABBC||Narayani Development Bank Limited||1,312,338.00||131,233,800.00|
|6||EDBL||Excel Development Bank Limited||8,111,213.00||811,121,300.00|
|7||SADBL||Shangrila Development Bank Limited||27,369,724.00||2,736,972,400.00|
|8||MNBBL||Muktinath Bikas Bank Limited||48,115,508.00||4,811,550,800.00|
|9||CORBL||Corporate Development Bank Limited||4,100,000.00||410,000,000.00|
|10||SINDU||Sindhu Bikas Bank Limited||5,574,560.00||557,456,000.00|
|11||SHBL||Sahara Bikas Bank Limited||1,633,670.00||163,367,000.00|
|12||SHINE||Shine Resunga Development Bank Limited||34,084,640.00||3,408,464,000.00|
|13||GRDBL||Green Development Bank Limited||5,190,000.00||519,000,000.00|
|14||MLBL||Mahalaxmi Bikas Bank Limited||33,424,028.00||3,342,402,800.00|
|15||KSBBL||Kamana Sewa Bikas Bank Limited|
|16||LBBL||Lumbini Bikas Bank Limited||29,064,536.00||2,906,453,600.00|
|17||SAPDBL||Saptakoshi 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.
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.N||Symbol||Bank Name||Listed Shares||Paid-up-capital|
|1||NFS||Nepal Finance Limited||3,055,512.00||305,551,200.00|
|2||BFC||Best Finance Company Limited||8,289,140.00||828,914,000.00|
|3||LFC||Lalitpur Finance Limited||2,368,747.00||236,874,700.00|
|4||GFCL||Goodwill Finance Company Limited||8,672,000.00||867,200,000.00|
|5||PFL||Pokhara Finance Limited||9,631,458.00||963,145,800.00|
|6||UFL||United Finance Limited||10,408,346.00||1,040,834,600.00|
|7||SIFC||Shree Investment Finance Company Limited||8,901,349.00||890,134,900.00|
|8||CFCL||Central Finance Limited||8,810,357.00||881,035,700.00|
|9||JFL||Janaki Finance Company Limited||6,004,111.00||600,411,100.00|
|10||SFCL||Samriddhi Finance Company Limited||5,459,409.00||545,940,900.00|
|11||CMB||Capital Merchant Banking & Finance Limited||9,351,695.00||935,169,500.00|
|12||SFFIL||Srijana Finance Limited||9,630,602.00||963,060,200.00|
|13||GMFIL||Guheswori Merchant Banking & Finance Limited||8,640,000.00||864,000,000.00|
|14||ICFC||ICFC Finance Limited||10,237,847.00||1,023,784,700.00|
|15||CFL||Crystal Finance Limited||700,000.00||70,000,000.00|
|16||MPFL||Multipurpose Finance Company Limited||4,000,000.00||400,000,000.00|
|17||PROFL||Progressive Finance Limited||8,001,000.00||800,100,000.00|
|18||MFIL||Manjushree Finance Limited||9,653,949.00||965,394,900.00|
|19||RLFL||Reliance Finance Limited||9,156,578.00||915,657,800.00|
|20||GUFL||Gurkhas 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.
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.