Tag: Companies

Boosting Your ROI in Stock Market Investing

Everyone wants a high return on their investment in stock market trading. First let’s consider the basics and the ways to earn the most on your investments.

Return on Investment

Usually referred to as ROI, the Return on Investment in stock market investing is the profit earned from selling a security or other asset divided by the amount of the original investment. With stocks, your ROI is expressed as an APR (annual percentage rate).

Your ROI is all the income you make on the stock, which also includes profit earned from selling the stock. When the sales price plus any other income is higher than the price you purchased the stock for, your ROI is positive.

When the sale price plus any other income is lower than the price you bought the stock for, you have a negative ROI (which is obviously what you want to avoid). In fact, as a trader in the stock market, your goal is a high ROI, not just a positive one. To achieve a substantial ROI, consider the following methods to boost your current stock investing efforts.

Know What You Are Purchasing

To ensure a high ROI in stock market investing, garner as much information as you can about the company you want to invest your money in. A bit of basic analysis to find out if the stock is worth the asking price can go a long way. Rather than gambling, you can also ask other people to do this research for you if you don’t have the time to do it yourself. Reliable research resources include the websites of major brokerage firms, mutual fund companies and finance publications. There are also paid newsletter that offer this information.

A Bull Market Is Not The Same As Smart Investing

When you earn a high ROI in stock market investing, there are many reasons for it. One of the possible reasons is your wise investment strategy. Another reason can simply be the good fortune to be in the right place at the right time so you wind up making money with minimal effort. We may feel smarter when the market is soaring so we get tempted to take on riskier positions and trade more frequently, which may not be the wisest decision.

Deactivate Active Trading

You may feel tempted to trade frequently when you are gaining. With online stock trading, investment is a mouse click away which can make you even more impulsive. Remember that it is difficult to make money by beating the stock market consistently. In stock market trading, it is better to have a buy and hold strategy to ensure a high ROI.

Take Note of The Tax Man

Pay attention to tax ramifications when trading stocks. Frequent trading can become extremely costly, especially when major income taxes are triggered by profits. By buying and holding for a period of at least one year, you would qualify for a lower capital gains rate. Your financial advisor should be able to consult with you on this.

January 3, 2023
Stock Trading in Nepal – An Introduction

A share is essentially a fraction of a company’s ownership. Purchasing or selling shares entails acquiring or disposing of a portion of the company’s ownership. The stock market, also known as the share market, is a place where you can buy and sell stocks. In order to raise money, public corporations usually sell shares to the public, but the stock market often trades other instruments such as debentures, bonds, and mutual funds.

Dividends are a way for you to get a piece of those companies’ earnings as a shareholder. While share trading is an exciting way to earn money both actively and passively, it is also risky since investors can have to bear the loss if the company fails. As a result, as a novice, it is important that you gain a thorough understanding of the market before investing your money in stocks.

Here is a brief introduction of how you can participate in the game of stock trading.

1. GET STARTED: OPEN A DEMAT ACCOUNT

Opening a dematerialized (DEMAT) account at one of the Depositary Participant (DP) licensed by the Central Depository System and Clearing Limited (CDSC) is a prerequisite to participate in both primary and secondary market. Most commercial banks, merchant bankers and stockbrokers provide such services. If you already own some stocks in your name, then you can give your DP to dematerialize your physical share certificates into dematerialized shares. The DEMAT account is similar to a bank account which debits and credits the shares you sell or purchase. Most DP’s also provide clients with facilities to check their DEMAT account status online as well.

2. KNOW THE MARKET

To get started in the stock market, it is essential to first understand how the market functions. Securities Board of Nepal (www.sebon.gov.np); the sole regulator of the capital market is a useful source for primary information. Its website provides information on various securities laws, investor education, and upcoming public issues amongst others. Similarly, the Nepal Stock Exchange (www.nepalstock.com) the sole secondary market; and its mobile-based application is a great source to get hands-on information. There are many other popular websites that provide constant updates about the capital market such as; Share Sansar and Mero Lagani. Furthermore daily national newspapers, websites of merchant bankers and credit rating agency – icranepal.com – also provide good information.

3. PARTICIPATE IN THE PRIMARY MARKET – APPLY IN PRIMARY OFFERINGS

One of the best opportunities to participate in the capital market is to apply for primary offers in the primary market such as; Initial Public Offering (IPO) or Further Public Offering (FPO). Most companies offer primary issues to the general public at face value of NPR 100 per stock, or at a premium based on their valuations. The risk is lower when you purchase in the primary market as you get an opportunity to buy shares at a lower cost as compared to purchasing those shares in the secondary market once they are listed. Also, look out for opportunities to participate in the primary offering of mutual fund schemes which can be a beginning point.

News about primary issues generally comes out in national newspapers and are widely announced on other media platforms. Once you know the primary issues are out, you can read their prospectus to see their detail information such as; past and projected performance, & management amongst others. You can also look at their credit rating provided by a licensed credit rating agency before making the decision to invest.

4. PARTICIPATE IN THE SECONDARY MARKET– OPEN A TRADING ACCOUNT AT A STOCKBROKER OFFICE

All the stocks offered via the primary market are listed in the secondary market i.e. Nepal Stock Exchange (NEPSE); currently, there are 231 companies listed in the stock exchange. The secondary market provides the platform to sell the shares you hold or purchase new shares from the market. The share price of these listed companies and the value of NEPSE Index changes every day based on total demand and supply of shares in the market.

If you wish to get involved in the secondary market, you will need to open a transaction account at a stock broker’s office. There are currently 50 stockbrokers licensed by NEPSE while there are a few stock broker offices outside Kathmandu. Once you open an account with a stockbroker, they will provide you with a unique ID code via which all the transactions in your name will be executed.

To make a purchase or sale order you will simply have to call your stock brokers or visit their office to place an order, make sure you have the shares in your DMAT account before you place a sell order to your stockbroker. The stockbroker charges some commission as a brokerage fee for each transaction while you have also have to pay a capital gain tax of 5% if applicable while making sales.

5. STILL CONFUSED- SEEK PROFESSIONAL HELP

If you are still confused and less confident about entering the market or you do not have time, energy and resources, do not worry as there are a number of professional licensed Portfolio Management Companies providing you with a full range of products and services under Portfolio Management Services (PMS). Based on your investment goals and expectations, these portfolio managers develop portfolios matching your risk appetite and invests in the capital markets on your behalf. The portfolio manager charges minimal annual and performance fees while these services offer you the opportunity to grasp the benefits of the capital markets. Moreover, you can also handover your existing portfolio to these portfolio managers for restructuring and further management.

All in all, as the stock market is constantly evolving and getting technical, retail investors are highly advised to seek professional advice and avoid making investments on herd mentality – invest wisely!

January 3, 2023
Nepal Stock Exchange (NEPSE) – A Short Introduction

Nepal Stock Exchange (NEPSE) is the country’s sole stock exchange. It is located in Kathmandu, Nepal, at Singha Durbar Plaza.

In 2033 BS, the government established a security purchasing and trading center in Nepal. In 2050 BS, the same location became the Nepal Stock Exchange Limited (NEPSE).

On January 13, 1994, the Nepal Stock Exchange (NEPSE) inaugurated its trading floor (29 Poush, 2050). It is Nepal’s sole stock exchange. As of May 13, 2020, the total market capitalisation of the companies listed on NEPSE is around Rs 1.54 trillion.

Objectives of Nepal Stock Exchange (NEPSE)

The primary function of the stock exchange is to facilitate the trading of listed securities. NEPSE has been trying to register publicly issued securities in the secondary market so that they can be traded easily. This is referred to as listing.

The Nepal Stock Exchange Limited (NEPSE) is a specialized government-owned entity governed by the Companies Act. It does business in compliance with the Securities Act. Its principal goal is to assist to the country’s economic development through capital formation and mobilization, as well as to stimulate investor interest by establishing a secondary market for the trading of securities issued by the Government of Nepal and organizations.

Nepse has been a prominent regulatory organization in terms of market operations, listed firms, and securities dealers, in keeping with its goal of trading shares, bonds, mutual fund units, and other securities through member brokers.

At the moment, the Nepal Stock Exchange offers general investors the ability to purchase and sell securities through 50 member brokers and 41 Remote Work Stations (RWS) in key cities both inside and outside the Kathmandu Valley.

The brokerage firm and its branches are spread across 21 different cities in Nepal.

Nepal’s capital market is in its early phases of development due to the size of the market, kind of company, financial instruments to be exchanged, laws and regulations, technology utilized for business, other physical infrastructure, manpower, and so on.

Similarly, Nepse is a founder member and current Executive Board Member of the South Asian Federation of Exchanges. It is also an Affiliate Member of the World Federation of Exchanges, with plans to become a full member soon.

Share Ownership In Nepal Stock Exchange

The Government of Nepal promotes the Nepal Stock Exchange (NEPSE). The Nepalese government owns 58.65 percent of NEPSE.

The significant shareholders of the Nepal Stock Exchange (NEPSE) are shown in the table below. It also includes a proportion of ownership.

S.No Shareholders Share Ownership (%)

1 Government of Nepal 58.65

2 Nepal Rastra Bank 34.6

3 Rastriya Banijya Bank 6.12

4 Members(Brokers) 0.62

Board of Directors of Nepal Stock Exchange

According to the Securities Act of 2006, the Board of Directors (BOD) of the Nepal Stock Exchange (NEPSE) is made up of members from various sectors. The BOD now consists of two members from the Nepal Government, one from Nepal Rastra Bank, and one from Rastriya Banijya Bank. Furthermore, the BOD will propose one member as a capital market expert. NEPSE’s General Manager will serve as a director on the BOD.

Nepse Index

NEPSE index is the market value weighted index. This index shows the aggregate growth in capitalization of companies listed in Nepal Stock Exchange.

Nepse Index reached its all-time high of 1881.45 on July 27, 2016.

Sensitive Index

Index calculated from the market capitalization of companies classified under group “A” is called sensitive index.

Sub Indices In Nepse

The sub-indices in Nepse include:

1. Banking
2. Development bank
3. Finance
4. Microfinace
5. Manufacturing And Processing
6. Hydro Power
7. Non Life Insurance
8. Life Insurance
9. Hotels
10. Mutual Fund
11. Other

Works Done By Nepal Stock Exchange (NEPSE)

Provides a market platform for buying and selling of secondary shares, debentures and bonds.

Develops and expands the secondary market in the capital market by supporting the policy and guidelines of the Government of Nepal.

Regulates listed companies, brokers and investors.

Spreads public awareness about capital markets.

Regulates and monitors the listed public limited companies.

Take membership with national and international capital market organizations.

List new companies to trade on the stock exchange, as well as OTC companies that are not listed or disbanded.

Development and expansion of the capital market by increase the number of institutions involved in the market.

Runs a clean, transparent, credible, fair market and works in the interest of investors.

January 3, 2023
What is the Internet of Things (IoT)?

You’ve already heard of smart devices, autonomous robots, and self-driving cars in some form or another. They are undoubtedly innovative, but they aren’t as clever as they seem. The biggest drawback of these smart devices is their limited ability to communicate with the outside world. A car can drive itself and avoid external obstacles, but it can’t decide when to pick you up or what kind of music you want to listen to based on how your day went at work.

Consider how useful it would be if your wearable fitness devices could monitor your heart rate and the number of steps you’ve taken during the day, and then use the data to recommend workout plans that are specific to you. A system that uses an app to monitor statistics for future training and recommends diet plans. Isn’t that awesome? That, then, is the real-world application of IoT. Continue reading to learn more about IoT.

What is IoT?

In the internet of things, all devices are linked by a unique identifier known as an IP address. These smart devices are also equipped with sensors. They use their own sensors to collect data from the environment, and they work closely with other devices to do so. After that, the data is sent to central servers. The servers then store, evaluate, and process the data before sending instructions to the system to perform a particular task under certain conditions.

Implications of IoT

IoT can be applied to almost every aspect of human life. They can be used in healthcare, where data from IoT devices can help doctors determine the best treatment plan for their patients. It can also be used to avoid the disease by tracking it continuously. In the same way, it can be used in industries to power manufacturing devices and various types of equipment. In addition, IOT can be used in education to enable students to collect learning materials. They also allow teachers to monitor their students’ progress in real time. In this way, the Internet of Things plays an important part in our daily lives.

January 3, 2023
What Stock Market Basics Do You Need To Know?

To succeed in the business of stocks, learning the stock market basics of the trade is essential. The stock market is a complicated game and knowledge is power when it comes to financial freedom.

The decisions you make can yield unlimited earnings or completely break your budget. While there is some level of gambling involved in the stock market, an educated trader will ultimately achieve success.

Prior to risking your hard-earned cash on the stock market, you need to recognize certain vital factors when deciding which company to invest in.

Consider these stock market basics to learn more about the company you want to buy into:

Check Out A Company’s Revenue

What is the actual amount of money the company makes? This total amount is referred to as revenue. While young companies in their early stages of development may not have much revenue to offer, other companies who have been in the market for a long time may use their revenues to cover costs and losses.

A Company’s Earnings Make A Difference

How much money does the company make? This amount of money is called a company’s earnings. Beside revenues, earnings may be used to cover expenses. Earnings are the extra money taken in by a company. Because investors investigate the earnings made by a company they want to purchase stocks on, the companies with large earnings have a distinct advantage in the stock market.

A Company In Debt Is A Bad Sign

How much money does the company owe? Debt is the money owed by a company, which can be represented in many different ways. When a company is in debt, the money they have will be used to pay up the debit. It is risky to purchase stock from companies in debt because the company is unstable which could result in them declaring bankruptcy.

A Company Should Own Property

What does the company own? The assets owned by a company, including business, money and stocks, are referred to as property. When you are aware of a company’s assets, you can better ascertain their position in the industry. When companies have significant properties under their ownership, it is safer to trust their background. Often people will immediately buy stocks from companies holding a major amount of assets because they are more secure.

A Company Should Show Financial Responsibility

How much does the company have to pay out and what are their total financial obligations? Each company has different financial obligations. When a company has few financial obligations, they are in less danger of getting into debt. Examine the liabilities versus the assets of a company to determine their financial responsibility. A company should have higher assets than financial obligations.

Gambling your money on a company you know nothing about is an unsafe and unwise decision. By simply reviewing the company’s background, you have all the stock market basics right at your fingertips.

To make sure your money is in the right hands, do your research about the companies you want to invest in.

January 3, 2023

S.No	Shareholders	Share Ownership (%)
1	Government of Nepal	58.65
2	Nepal Rastra Bank	34.6
3	Rastriya Banijya Bank	6.12
4	Members(Brokers)	0.62

Tag: Companies

Boosting Your ROI in Stock Market Investing

Stock Trading in Nepal – An Introduction

1. GET STARTED: OPEN A DEMAT ACCOUNT

2. KNOW THE MARKET

3. PARTICIPATE IN THE PRIMARY MARKET – APPLY IN PRIMARY OFFERINGS

4. PARTICIPATE IN THE SECONDARY MARKET– OPEN A TRADING ACCOUNT AT A STOCKBROKER OFFICE

5. STILL CONFUSED- SEEK PROFESSIONAL HELP

Nepal Stock Exchange (NEPSE) – A Short Introduction

Objectives of Nepal Stock Exchange (NEPSE)

Share Ownership In Nepal Stock Exchange

Board of Directors of Nepal Stock Exchange

Nepse Index

Sensitive Index

Sub Indices In Nepse

Works Done By Nepal Stock Exchange (NEPSE)

What is the Internet of Things (IoT)?

What is IoT?

Implications of IoT

What Stock Market Basics Do You Need To Know?