The number of investors in the stock market has crossed 7.5 million. According to the Central Depository and Clearing System (CDSC), 7.5 million 7,860 demat (share holding accounts converted into an electronic system) accounts have been opened as of Friday.

In this way, it can be analyzed that more than 75 lakh people have invested in shares in the stock market through the primary and secondary markets. 

Currently, a demat account is mandatory to apply for an initial public offering (IPO) and to buy and sell shares in the secondary market. Therefore, the analysis has been made based on the number of demat accounts opened so far as the number of investors in the stock market is concerned. However, experts say that there may be about 5 percent duplication in the aforementioned data. Even if five percent of demat accounts are duplicated, it can be estimated that more than 7 million Nepalis have expanded their investment in shares so far. 

As of Friday, there are 65 lakh 83 thousand 634 users of the Mero Share app. Out of them, 47 lakh 29 thousand 770 are active users, according to the CDSC. Thus, out of 16 billion 72 crore 64 lakh 372 shares listed in the secondary market, 16 billion 28 crore 28 lakh 97 thousand 442 shares have been demat (converted from physical shares to electronic shares), according to the CDSC. 

As of December 2082, 284 companies are listed on NEPSE. Among the listed companies, 132 are banks and financial institutions and insurance companies. 97 are hydropower companies, 26 are production and processing industries, 8 are hotels, 7 are investment companies, 4 are trading companies, and 10 are other group companies. As of December 2081, the number of listed companies was 267.

Among the listed companies, the share of banks and financial institutions and insurance companies in the stock market capitalization is 52.3 percent. Accordingly, according to NEPSE data, the share of hydropower companies is 15.2 percent, investment companies 7.3 percent, production and processing industries 6.9 percent, trading institutions 4.8 percent, hotels 3.1 percent, and other group companies 10.4 percent.

Compared to the last two decades ago (financial year 2060/61), there has been a significant improvement in the secondary market indicators in Ashar of the fiscal year 2081/82. During this period, the essential infrastructure of the stock market has not been developed, and the investor protection fund has not been established. The development and expansion of instruments other than equity (shares) in the secondary market has not been possible. However, in the last two decades, there has been an increase in indicators such as the NEPSE index, trading volume, and market capitalization. 

Accordingly, in the fiscal year 2060/61, the overall NEPSE index was at 222 points. By Asad in the fiscal year 2081/82, it has reached 2,794. 79 points. The data shows that there has been a significant improvement in indicators such as total market capitalization, total market capitalization to GDP, trading volume, and the ratio of trading volume to GDP.

In the fiscal year 2060/61, when the total annual trading volume of NEPSE was 2.14 billion, the government received 3.1 million rupees as capital gains tax. 21 years later, in the fiscal year 2081/82, when the trading volume of NEPSE exceeded 2.1 trillion, the Nepalese government received more than 18 billion rupees as tax from the market. 

The secondary market, which had a daily turnover of less than Rs 10 million till about two decades ago, saw a daily turnover of about Rs 30 billion in Bhadra 2081. The size of the country's capital market has increased significantly in the past decade. The number of investors, which was a few thousand, has increased to more than 7 million. The market capitalization is about 45 trillion, the number of listed companies is 286, and about 87 companies are awaiting approval from the Nepal Securities Board to issue primary shares.

Niranjan Phuyal, Chief Executive Officer of NRN Infrastructure and Development Limited, said that the mentioned numbers are better than those of countries with emerging economies and higher per capita incomes than ours. Till a decade ago, only banks, financial institutions and insurance companies, which were forced by law, were conducting primary issuances. He said that the secondary market was mainly centralized in banks and financial institutions, but now hydropower, manufacturing companies, hospitality companies and other companies are also entering the market. 

‘The history of the capital market in Nepal is not very long. The history of companies issuing shares in Nepal began with Biratnagar Jute Mills in 1993 BS. The capital of this company, formed in partnership between the then Prime Minister Juddha Shumsher Rana and Indian businessman Radhakishan Chamaria, was 160,000 rupees. Of this, 75 percent was Indian and 8 percent was government capital, while 25 percent was Nepali capital,’ said Phuyal. ‘As mentioned in Sardar Bhim Bahadur Pandey’s book ‘Tyas Bakhatko Nepal’, many companies were established in Kathmandu at that time because this company was able to achieve good success in a short time. But due to political and business reasons, most of them could not continue.’

Nepal’s organized securities market began with the establishment of the Securities Buying and Selling Center in 2033 BS to trade government bonds. Later, with the promulgation of the Securities Trading Act in 2040 BS, secondary market trading of shares also started through this center in 2041 BS. The capital market is considered to have been trading regularly since 2050 with the formal establishment of the Stock Exchange and the Nepal Securities Board. 

From 2050 to 2064, shares were traded through open out channels. In 2064, the electronic trading system was launched, which helped securities trading formally move outside the confines of Kathmandu. In 2072, full demat (dematerialized) share trading began. In 2075, full online trading began.