Share Market is a never ending market for every country. Currently, it is booming in context of Nepal as well. More and more people have started creating their primary and secondary shares trading account after this lockdown. This is due to the fact that market is currently in its BULLISH(increasing) state after the pandemic. So, if you are interested in buying and selling shares of various companies, consider going through the end of this article for detailed information.
Requirements to involve in share market in Nepal:
- Bank Account: The first and foremost step towards entering in share market is opening a Bank account. You could open an A/C in any banks that you wish for. Better choose a bank that is nearby you as you will need to visit it time and again after you have involved in share market.
- Demat account: After a successful opening of your bank account, you will have to apply for a demat account for the same. A demat account is an account that holds your shares, equities an other financial securities in an electronic form. For this, you will have to visit the bank and ask for a demat form and fill your details on it. It could take anywhere from 3 days to a week depending on the bank and workflow of that particular bank. After the bank finalizes and creates the account, they will email your demat credentials or contact you personally.
- Mero Share account: Mero Share is a software developed by CDSC which provides its user the ability to buy Primary Shares. Primary Shares are those shares which are proposed by a company for all users to buy it through IPO(Initial Public Offering). Companies propose their IPO via Meroshare and all the users can apply for it depending on the numbers proposed. If the number of applied proposals exceeds the IPO count supplied by the company, there is a provision for lottery system that decides who gets the remaining shares. You can apply for Meroshare form along with the Demat form in the bank for free. Sadly, the banks take longer time to create demat and meroshare account. For the same, you can apply it via any licensed broker company nearby you. They charge Rs200 for the accounts creation and provide you the account details faster than bank does. Currently, there are 50 brokers who operate on the trading floor as per the Securities Act, 2063 (2007), Securities Regulation, and by-law.
- CRN Number: After obtaining Mero Share login credentials, you still wouldn’t be able to apply for primary share. The last step for the process is to register and get you CRN Number(C-ASBA Registration Number) from the respective bank. It would take around a day for CRN number to be activated and receive it. This would be the last step for you to begin buying IPOs. Now, you can start applying for the IPOs whenever any company proposes it in Meroshare. This gives you the power to buy only IPOs but not shares from other persons or trader. For buying shares from other persons and selling your shares to others, you will need to create TMS(Trade Management System) account from your nearby broker.
- TMS: A TMS account is an account provide by your respective broker for buying and selling secondary shares from the share market. Every broker have their own TMS and all are associated with NEPSE(Nepal Stock Exchange). To be eligible for using it, you will need to have completed all the steps mentioned above and then fill a TMS from. You can get it from the broker that you are associated with or are willing to get associated in the future. You will have your own private login dashboard where all of your holdings will be shown. You can observe the market price from the live NEPSE chart in your TMS account itself. You will have the complete authority to sell any amount of your share and buy any amounts of share that fits in your collateral value. Collateral value is the funds that your broker provide to you based on what amount of cheque value you have provided to them. The collateral value will be 4 times the amount in the cheque. Suppose, you have submitted a cheque of Rs25000 then you will have a collateral value of Rs1 Lakh. That means, you can buy the shares worth Rs1Lakh from your TMS account. Once the shares are bought from your account, you will have 2 days to pay the amount to your broker. If not, you will be charged 20% of the total shares that you applied and you will not receive that share. After you clear up the payment, your collateral fund will be refreshed to its original value and you can continue trading. It will take upto 1 Week for the shares from TMS to your Meroshare after you complete your payment.
- Mobile Banking or E-wallet: Mobile banking or wallet is a must if you are involved in secondary trading. You will have to buy and sell shares for which you will have to pay and receive money. For the same, cheque or bank deposit becomes very hectic if done on a regular basis. The best way would be using Mobile banking or e-wallet and conducting the transactions. Most banks and e-wallets provide direct payment to the broker via the app itself.
Some tips that will help you in the beginning of entering in share market:
- Don’t run for easy money in the early stage. Maintain a habit of researching before you buy any shares. There are various applications and websites that will help you get each and every information on the share market and companies involved.
- Trading is a kind of legal gambling. Make sure you know it so that you save yourself from risking all your money in short period of time.
- Don’t invest all your money in a single company.
- People are often provoked in buying shares by seeing their collateral money, make sure you don’t buy shares if you can’t afford to pay it within 2 days.
- Make a habit of calling your broker after each payment that you make. This will make sure your broker won’t forget registrating your payment to NEPSE and you wont have to pay any fines for untimely payment.
Here are some websites and applications that might be of some use for you on gathering information: