User:Nstockguru

Nepalese Stock Market : Trends and Challenges

1 Introduction to Nepal Stock Exchange
The history of securities market began with the flotation of shares by Biratnagar Jute Mills Ltd. and Nepal Bank Ltd. in 1937. Introduction of the Company Act in 1984, the first issue of Government Bond in 1964 and the establishment of Securities Exchange Center Ltd (SEC) in 1976 were other significant development resulting to capital market. SEC was established with an objective of facilitating and promoting growth of capital markets. Before conversion into stock exchanges, it was only the capital market institution undertaking the job brokering, underwriting, and managing public issue, market making for government bonds and other financial services. Government of Nepal, converted SEC into Nepal Stock Exchange (NEPSE) in 1993 under a program to reform capital market, and also established Securities Board, Nepal (SEBO/N) as an apex regulatory body at the same year. NEPSE is a not for profit organization operated under Securities Exchange Act, 1983 with the basic objective of imparting free marketability and liquidity to the government and corporate securities by facilitating transactions in its trading floor through member market intermediaries such as brokers, market makers etc. NEPSE opened its trading floor on 13th January 1994. The NEPSE computes NEPSE index that serves as a benchmark of the economy. It is a value weighted index and is computed daily on the basis of the methodology recommended by the International Finance Corporations (IFC) for emerging markets indices. In addition it also computes Industrial indices representing diverse economic sectors such as commercial banking, manufacturing and processing, trading, hotel, insurance and finance, development banking and others. It is important to note that the beginning on August 31, 1999, Sunday trading sessions were temporarily eliminated such that trading day is Monday through Friday, five days a week. However beginning from April 14, 2005 trading occurred six days a week that is Sunday through Friday.

2 Research in Nepalese Stock Market
The following are the research papers that focussed mainly on Nepalese Stock market

Joshi, N.K. and K.C., F.B. (2005). Seasonal Anomalies in the Nepalese Stock Market. A Journal of Management and Development ,1 (2 & 3) : 13-27.

Joshi, N.K. and K.C., F.B. (2005). The Nepalese Stock Market: Efficiency and Calendar Anomalies.Economic Reviews: Occasional Paper of Nepal Rastra Bank,17 (1) : 43-88.

Joshi, N.K. (2006). Day-of-the-Week Effect: Is it an Industry specific Phenomenon? The Economic Journal of Nepal, 29 (1):1-12.

Joshi, N.K. and Bhattarai, R.C. (2006). Stock Returns and Economically Neutral Behavioural Variables Relationship in the Nepalese Stock Market. Working Paper.[www.ssrn.com]

Joshi, N.K. and Bhattarai, R.C. (2007). Stock Returns and Economically Neutral Behavioural Variables Relationship in the Nepalese Stock Market. Economic Reviews: Occasional Paper of Nepal Rastra Bank,19 (1) : 43-58.