Nepal Job Corner | It is the right time to start investing in Share Market in Nepal: a comprehensive guide for absolute beginners
Is it the right time to start investing in Share Market in Nepal? The answer is - YES!
Have you heard people investing in share market and earning money? Do you want to multiply money quickly? Are you willing to invest but do not know where to begin? Do you want to earn money from home? Do you have basic internet facility? Do not worry, you have landed at the right place! Here I will explain each and every steps in detail and in the most simplest way. Please stay here and read the article carefully.
_______________________________________________
Interested in Job Search instead? Consider these:
_______________________________________________
Step - 1: Open a Demat Account and get Client ID
Demat account is the account which is required for share trading. It is different from traditional Saving/Current accounts. You must have a normal bank account to transfer fund from bank in order to place share order. The bank/capitals charge an average of NRs. 150 annually for this service. However, you may need to open a Trading Account to sell your shares, process of which I will discuss in later stage in this article. Keep reading!
There are two ways you can open a Demat account:
- Option-A: Contact and Visit Your Bank
Visit/Enquire your bank in which you already have Saving/Current account and ask them whether they provide Demat Account to its customer or not. Most of the banks have started providing this service nowadays. If yes, bang on! Go ahead and fill the forms. The only problem with this method is that it takes 3-10 days to activate the Demat account.
- Option-B: Visit Capital Investment Organisations
Visit the capital investment organisations which essentially deal with the capitalisations. This method is faster and one can easily get the Client/DP ID instantly either on the same day or the next. Nabil Investment, NIC Asia Capitals, Global IME Capitals, Prabhu Capitals are some of the capital investors who manage share trading in Nepal.
- Option-C: Apply Online
Some banks/capitals allow customers to apply online to open a Demat account. However, the payment and the verification process might increase the complexity. Apparently, everyone has to visit bank/capital at some point of time because the online system is still under development phase.
Step - 2: Apply for Meroshare account and get the Credentials
Meroshare is an online platform through which one can apply for IPO, right shares and bonus shares (Don't know what these all are? Skip it for now. You will understand it later as you grow older in this field.) It can be opened at the Bank which you already have an account associated with you. The client ID which you get in the above process has to be filled here along with the valid email ID. You will receive login credentials for Meroshare on the email ID you provide. Kindly save the incoming mail for the future purposes. Click here to login your Meroshare account. You will be required to change password and set up a 4 digit pin on the first login. Banks charge NRs. 50 annually for this service.
Note: If you do not have internet connection or you are not able to use the Meroshare platform because of any reason, you can always visit the bank/capital in order to apply and purchase shares by filling up the offline form and submitting it physically.
Step - 3: Apply for C-ASBA and get CRN number
This form is again available at the capital/bank where you processed Step-1. The client ID is required to fill-up C-ASBA (Application Supported by Blocked Amount) form. This allows the bank to block the amount for the applied number of shares from your account and it will allow the bank to automatically deduct the amount from your account if you successfully get the shares. Upon verification, you will receive a Customer Reference Number (CRN number). Save this number because it is compulsory to provide during applying for purchasing of share.
Congrats! You are now eligible to apply for the purchasing of shares in primary market. You just have to login through your Meroshare account online or visit the bank. Once you gain some experience in Primary Market buying IPO's (Initial Public Offerings) you can go for Secondary Market afterwards. This is because you do not have to take the risk of losing your hardly earned money. In stead, the price of IPO increases over the period of time, in general. You can sell it whenever you think you need money or you think that the price is not going to increase beyond that. The minimum price of IPO per share is NRs. 100 and one can apply for minimum of 10 Kitta (10 number of shares) for NRs. 1000. Yes, that is the only sum of money to begin with!
But hey, how do I SELL my shares? Apparently, that is the only way to get the profit. Next step!!!
Step - 4: Open a Broker/Trading Account and get TMS credentials
You have to visit any broker office out of 50 (click here to see the details of all brokers in Nepal) in all over Nepal in order to register for this. One person can have only one broker account and only one CRN number. There you have to fill three forms (including the one for online trading) and submit them. Within a week or so, you will receive the login credentials. Wohoo! Now you can buy and sell your shares just sitting back at home! In order to sell your share, you have to place the selling order on NEPSE's official website (called TMS) provided by the brokers. Note that each broker has unique URL. Similar to Meroshare, you need to reset password on the first login. Using the same URL you can trade in secondary market too.
Some useful Tips for absolute beginners:
- Always analyse company before investing.
- IPO is the most safe investment for beginners.
- Try to open accounts for all of your family members including minors. This will increase the chances of share allocation.
- Try not to miss IPO's.
- Always follow up for the company in which you have invested. They offer Right Shares time to time which you have to claim.
- Do not hold shares for very long period. Sell it and mobilize money.
- It is recommended to apply for maximum 50 Kitta for IPO for beginners. It is better to start with 10 or 20 Kitta.
- Use Facebook, Newspapers etc. to get yourself updated about the current openings and related information.
- It requires up to two weeks to get the results of placed shares. So do not panic and sit back until the result is announced.
- Nowadays some companies allot share using lottery method. You may or may not get the shares or you can get the partial quantity of placed share. Try investing in other firms.
- If you are placing purchasing order with all family members, place in at least 1 hour of interval to increase the chances of getting the share.
A brief introduction of Trading in Secondary Market
It is recommended that you should start trading in secondary market only after you get enough experience and knowledge required for it otherwise you may lose your money. There are two options available to start trading in secondary market:
Option-A: Offline
Please follow the steps shown below:
Option-B: Online
Please follow the steps shown below:
I hope this article helped you to understand the basics of Share Marketing in Nepal. Please give your valuable feedback in the comment section below to encourage us to write such articles in future. Do share it with your friends and family who are looking for a guide to start investing. Welcome to the Share Market folks! Stay happy and safe.
Want to know more? Please feel free to contact us.
Nicely explained and helpful post
ReplyDeleteVery helpful. Thanks alot.
ReplyDelete