To know how to invest in share market in Nepal firstly you need to understand what is share and how it works.
In simple terms, a share is a unit or portion of ownership that is issued by a company to the public or individual. Those who own or hold the share of any company are called shareholders of that company. Shareholders are investors of the same company.
As you can guess share market is the marketplace where the exchange of shares takes place. You can buy or sell shares on the share market. The share market is less risky if you are aware of how things work here before you invest in share market in Nepal.
There are certain things to keep in mind before investing in share market in Nepal. Investors should be aware of how things work under share market.
What are the benefits of investing on the Share market in Nepal?
1. Passive income ( Earn without investing more time )
2. Share can be used as collateral to take a loan.
3. Tax saving ( Share income: 5% tax.
4. Safe to invest.
Investing on share in Nepali market has a lot of benefits which much lesser risk. It is recommended to invest in share market as early as possible.
Things required to invest in share market in Nepal
- Bank Account
- DEMAT Account ( DEMATerialization Account )
- CRN Number through C-ASBA ( Centralised Application Supported by Blocked Amount )
- Mero Share
All you need to enter the primary share market in Nepal is Bank Account, DEMAT Account, CRN number, and Mero share account. If you already have your account on any eligible banks on which most of the bank already provide then you can apply for DEMAT account by visiting the bank.
However, few banks have already made DEMAT registration available at their online sites. Still those services are down most of the time so it’s better to visit bank and give few hours of a day.
After you’ve successfully opened a DEMAT account which usually take 4-7 working days you can apply for CRN Number. To register CRN number you can visit bank or respective bank’s website.
Mero Share account can also be applied at the same time you apply for CRN number. It takes around Rs.250 to complete listed task above which is charged by the bank annually.
Firstly there are two types of share market in Nepal.
- Primary Share Market
Primary market is the place where new company issues their first share to public on their base price which is known as IPO.
Fresh investors are highly recommended to go through the primary market during their starting phase. You can only buy shares on the primary market as it only deals with initially issued shares.
Share can be applied online through Mero Share on the primary market. It is recommended to enter the primary market for a period of time before you get into the secondary market. You need to enter the primary market to invest in share market in Nepal.
There are 3 types of trades done on primary market.
- IPO ( Initial Public Offer )
- IPO is the firstly issued share by the company to the public.
- No to very low risk of loss.
- Suitable for investors who are new to the share market.
- The profit generated is low compared to the secondary market.
- FPO ( Follow Up Public Offer )
- FPO is issued when a company which has already issued IPO wants to issue new share from the public.
- Right Share
- Right share is a share issued to the investor who is already holding the share of the company.
What is required to enter the primary share market?
1. Bank Account
2. DEMAT Account
As compared to secondary share market primary share market is safe and easy to invest.
2. Secondary Share Market
The secondary market is the market place where you sell your IPO or buy shares from other people. It is commonly known as NEPSE (Nepal Stock Exchange ).
On the secondary market, it is best to have more knowledge about the share market. As mentioned earlier this market tends to have more risk compared to the primary share market. Be smart to invest in
What are the things required to invest in the secondary share market?
1. Broker/ Trading Account
2. Nepal Stock Exchange Trade Management System (TSM)
3. Connect IPS / Global Bank / Prabhu Bank
You need a trading account to buy or sell share in secondary market. Trading account will connect you to the broker and they will charge commission on every transaction you make (buy or sell share).
To open Trading Account you can personally visit the nearest broker office or register online via NEPSETMS. Also, you can create a DEMAT account from the Broker’s office as well.
Connect IPS is used to hold your money collateral while bidding for a share. You can easily open a Connect IPS account by registering from their official website ConnectIPS.
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Myths about Share Market in Nepal ( Not True )
- Share Market is for expert only.
- Investing in the Share market is gambling.
- Share market will give a higher profit.
- Invest a lot of money to make more money.
These are all myths about share market that are not true. These rumors are spread around by people who are not investing and have no hint about the sheer power of share market in Nepal.
Facts about share market in Nepal ( True )
- Share market is safe to invest as long as you have basic understanding of it.
- You can invest on share with very low amount of money.
- Investing on share is not gambling.
- You don’t need to invest fortune on share market.
The more people invest on share market the more it will flourish which will directly or indirectly benefit the nation. It is highly recommended to invest as you get your citizenship card. The early bird gets the worm.
How to apply IPO through Mero Share Website or App
You are here because you’ve already opened DEMAT account, registered CRN number and registered on Mero Share. After you’ve completed these steps you are ready to enter primary share market and start investing.
Now you are ready to invest in share market in Nepal.
You will receive mail with your Mero Share username and password which is to be changed at your first login. Click on the link and change your password and login into your account.
Download Mero Share App if you are on android and if you are on iOS ( iPhone ) then use Safari or Chrome. Android users can also use any browser to login on Mero Share.
Open any browser and type meroshare.com on it and it will take you to the Mero share login page. Here select your Bank and enter your username and password which will take you to your dashboard.
If you are on your phone’s browser then swipe right for menu. Now go to MY ASBA and all available IPO will show up that are still open to bid.
Then click on Apply For IPO and click on Apply button of which IPO you want to bid.
Select your Bank and Bank number field will automatically be filled.
Then enter how many Kitta you want to apply for. ( Look for minimum Kitta available to be applied above )
Amount will be automatically be filled.
Then enter your CRN that you’ve received from Bank and agree on terms and click on Proceed.
- Always make sure you have a sufficient balance on your account.
- Apply only for 10 Kitta.
- Your money will be refunded if you do not get allotted for any share.
- Your money will not be refunded if you’ve applied for 20 kitta and you get 10 kitta only.
- Some of the IPO are debenture which is not profitable in the long term.
After entering primary market for few months you will have little knowledge about share market. Till now you’ll have plenty of idea to invest in share market in Nepal.