Influence of Nepse in Stock Price of Nepal Stock Exchange

INFLUENCE OF NEPSE IN STOCK PRICE OF  NEPAL STOCK EXCHANGE

Parash Amatya

The British College

Student Id: 4007582043

Model teacher: Dr. Madan Manandhar

                 Dr. Vikas Kumar

Table of Contents

Page No.

Chapter-1

1. Introduction……………………………………………………………….        

1.  Background of the study……………………………………………. 3-6
2.  Statement of problem……………………………………………….. 6-7
3.  Objectives of the study……………………………………………… 8
4.  Significance of the study……………………………….…………...  9  
5.  limitation of the study………………………………………………  9-10
6.   Rationale of the study………………………………………………  10

Chapter-2

Review of Literature…………………………………………………    11

Chapter-3

Research Methodology

1. Introduction……………………………………………………………..  12
2. Research Design………………………………………………………… 12
3. Nature and sources of data……………………………………………… 13
4. Data Collection Techniques…………………………………………….  13
5. Data Analysis Tools…………………………………………………….  14

Bibliography…………………………………………………………     15                                                                                                                                                                                                                                                                                                                

INFLUENCE OF NEPSE IN STOCK PRICE IN NEPAL STOCK EXCHANGE

Chapter – 1

INTRODUCTION

1.  Background of the Study

 There are various types of financial market. Each market serves a different set of customer or deal with different types of security. Transfer of capital between savers and those who need capital take place in different ways like direct transfer, indirect transfer through investment banks and indirect transfer through financial intermediaries.

Investment in financial sector nowadays has great impact on the development of any country, if there is no investment than there is no savings. Saving is impossible without earning, so investment in many sector help to earn good profit which has a result on a great saving. Investment can be categorized into two categories, real investment and financial investment. Real investment deals with investment in real assets such as land, building or in fixed property whereas financial investment deals with the investment in financial markets such as securities.

Financial market helps to mobilize the resources into various sectors like finance company, Investment Company in the form of debt and securities. Companies issue there shares debenture, IPO, through the stock market. Where public can invest their money through NEPSE. Public companies should take permission from the NEPSE to issue its share and other securities to trade. It motivates other companies and institutes to invest. Which result the great impact on general savings, which also helps to raise the living standard in a country. To rise in index in stock exchange indicate the economic growth whereas fall in index indicates decline in economical condition. Nepal stock exchanges allow to investor’s enterprise financial companies to participate in the secondary market. The secondary market proves to be successful for the enterprise and the investor with their earning.

Security market is the place where buying and selling of securities takes place. The company are involve in security market are investors and entrepreneur to buy or sell security in the open market. Security market provides opportunity to all categories of investor and makes the financial market most competitive.

Capital markets are the markets for long term debt and corporate stock. Capital Markets are also classified as primary markets and secondary markets. Primary markets deals with selling of new securities so that companies can meet their financial requirements. Primary markets denote the market mechanism for the original sale of securities y an issuer to the public. It is marketing which the securities are sold at the time of their initial issuance. In other words, a market for a newly issued securities time of their initial issuance is called primary market.  Secondary Market is the place where securities are traded that has been issued at some previous point of time. In other words, where existing or outstanding securities are traded is referred to as the secondary market or more popularly known as the stock market. Share or stock market is a major component of securities market.

The history of securities market in Nepal is not too long. The history of the security market began with the flotation of shares by Biratnagar Jute Mills Ltd & Nepal Bank Ltd in 1937, Establishment of security Market Center (SMC) was another important dimension for the growth of security market in Nepal, which was later on restructured & renamed as Security Exchange Center (SEC). But after the first amendment to securities exchange act in 1993, SEC restructured into present form of Nepal Stock Exchange Ltd (NEPDE) to act as a market operator & Security Board of Nepal (SEBON) was established as the separate government regulating body. NEPSE is working under SEBON.

According to the securities Act 2006, the board of directors of NEPSE consists of 7 members, 2 members including chairman from Nepal Government, 2 menbers from Nepal Rastriya Bank, 1 member from NIDC, 1 member will be nominated by BOD as an expert in capital market and General Manager of NEPSE will also serve as a director on the BOD. At present, there are 23 member brokers and 2 market makers who operate on the trading floor as per the securities exchange Act, 1983 rules and by-laws.; beside this, it has licensed both dealers as primary and secondary market. At present, 159 companies have listed their securities in NEPSE. NEPSE has adopted an “Open out Cry System”.