NEPSE – an organization that has become very familiar with the Nepalese common man in today’s date.
The ease of doing business and the rise in people’s awareness of the matter of stocks and the benefits that can be gained through it have captivated the dreams of many people.
Hoping to make a quick profit out of short-term investments is the dream of many.
Some have succeeded while others have not.
But the mystique of NEPSE has not faded away from the hearts and minds of common folk.
The Stock Market which was considered the playground of rich and upper-middle-class people now has become a place for everyone just in a matter of decades.
It is quick to transition seeing the history of other countries and a short history of stock trading in our country itself but here we are.
Now let us get a formal introduction, shall we?
The Nepal Stock Exchange (NEPSE) is the only stock exchange in Nepal.
With a market capitalization of more than Rs. 3 lakh crore ($24 billion), NEPSE is the backbone of the country’s economy which accounts for just more than half of it.
With the possibility of making or breaking someone’s dreams now let us ask the question of how to make one’s dream possible.
One answer to that question is to sell your share in the secondary market.
What is a secondary market?
The secondary market is where investors buy and sell securities they already own.
It is what most people typically think of as the “stock market,” though stocks are also sold on the primary market when they are first issued.
So in general NEPSE is what we call the secondary market of Nepal.
People trade their shares in the secondary markets to make a profit by buying while prices are low and selling while prices are high.
Nowadays almost every transaction can be done through computers and with just a phone call to brokers meaning our NEPSE has gone online.
So how to open a trading account and operate in the secondary market remains the question.
How to open a stock trading account
The first step is you’ll be asked to fill up and submit two forms in the broker’s office to get a trading account.
One of the forms will be a KYC form and the other is an agreement paper for online trading.
You can download these documents from the broker’s website as well.
The second step is to fill these form in the broker’s office and submit it there. You’ll need a passport-sized photograph of yours, and a scanned copy of your citizenship certificate.
They may also ask for your BOID verification document (you can verify that your BOID is valid by yourself as well).
After this, you guys are in the business of operating a secondary trading account.
Nowadays due to the availability of technology, people can open and operate the account online as well.
Opening a NEPSE Trading Account Online
Every broker is provided with a dedicated portal for an online stock transaction under TMS.
TMS is the official software by NEPSE where online transactions of stocks take place.
Every brokerage firm is provided with a unique identification number and the dedicated TMS website address is provided as www.tms (broker number)nepsetms.com.np.
Suppose you want to open a trading account with broker number 71 then you can access the TMS of that broker at https://www.tms71.nepsetms.com.np.
Next, you’ll have to click on the register option to create a new account.
There you’ll be asked to enter all the details in the KYC form as mentioned above.
You must have the two forms filled as mentioned above and have them scanned in digital form as you would have to upload them along with the registration form.
You’ll need to have your passport-sized photograph and citizenship certificate in the scanned form to upload on the registration form for online registration.
Verification and Accessing Your Secondary Market Account
After you have submitted the forms be it online or offline, you’ll have to wait until you receive an email on email you provided on the registration form for online trading.
If you hadn’t applied for online trading, you’ll have to visit or call the broker’s office for 10 digits unique client code which you’ll use to buy and sell stocks.
If you have received the client code you can now start buying and selling stocks by visiting the brokerage office or making a phone call to the broker for buying and selling orders.
Now, if you applied for an online trading account, you’ll receive the client code in your email.
You’ll receive an email for setting up a password for logging in to your TMS dashboard.
You can always call your broker to ask if your application form has been verified to speed up the process.
With all the process explained I expect the process of buying and selling the shares is going to be a cakewalk for you guys.
Benefits of Opening a Secondary Market Trading Account
Nepalese are known to be skeptics. They are not just going to trust anything that involves making money, anytime soon unless they became habitual with it.
So to make them habituated to the entire process we have to explain the benefits of which there are several and believe me all are related to money.
Now I definitely have your attention. I guess.
Sell Your IPOs/ Encash Your Profit
IPOs, also known as Initial Public Offerings are the base price on which the shares of any company are offered to the general public.
So when these IPOs get listed in the secondary market they are already worth many times more than they cost during the IPO process.
Therefore secondary market allows you to gain on that increase with relative ease.
Even if you have bought secondary shares and they have increased in value, the secondary market is the place to sell those shares and encash the profit.
Who doesn’t like a tidy bit of profit which is several times more than they paid for it in the first place?
Trade Stocks and Multiply Your Income
You must have heard the saying many times in your childhood that “Money attracts money”.
Here in the secondary market, this is absolutely true statement.
In the secondary market, you can trade stock through the account you have opened in the broker’s office for trading in the secondary market.
Stock traders typically use technical analysis strategies. Some debate the accuracy of technical and fundamental analysis, but let me tell you, they both work.
Invest in Companies for Long-Term Growth and Profit
There are companies that are known for the consistency and stability they provide.
They have been operating for years, some of them even for more than 100 years still their performance is rock solid and returns are generous.
Banks like Everest, Standard Chartered, NABIL, and others have proven themselves to be more than worthy of receiving the Nepalese investors hard earned money.
Their return on investment is truly enviable in nature.
Then there are people who like stability rather than the volatility that the stock market usually has for them.
They want safety and profit in long run along with stability and one may not get the chance to invest in the IPOs in the first place.
So the secondary market is the place where one can buy the shares of these stellar companies at a bargain sometimes.
Nepalese are all about relaxation in later life. They want assets and wealth so that they can spend their at old age without any worries and stress.
Buying the stock of these companies at the secondary market is the perfect way to achieve that.
Grow Your Income
Many of you must have heard this saying time and again “If salary is the one source of your income then you are one step away from poverty”.
So here comes the question – How do you supplement your salary with other sources of income?
Do you start a business?
Nope, it takes time and effort. Not to mention the investment which might be a big one when you are struggling to make ends meet.
Do you get another job?
Seriously another job. Should a person have no life at all?
The answer to that is quite simple.
Make smart decisions with your money.
One of the smart decisions is to invest in the stock market and the secondary market is the perfect place to do that.
NEPSE is the one and only secondary stock market of Nepal where companies are worth more than 3 lakh crores.
Yes, you heard it right.
With the daily transaction in billions of rupees, one can easily grow his income through the first initial investments of a few thousand rupees.
This can be done in the comfort of one’s office or home while staring at the monitor and looking at the charts and the NEPSE index.
This way you can avoid the financial bankruptcy that is lurking around the corner because of your one income source.
Passive Way of Earning Money
We have already stated that people can grow their income through the secondary market.
Another one of its benefits is that it is a passive income source.
In a lazy man’s terms, it is a way to make the money without getting out of bed or even sleeping.
The stock market continues to operate in a vibrant economy. People who invest big invest in every stock market that is possible.
World-renowned investor Warren Buffet has invested in the Newyork stock exchange, London Stock Exchange, the Japanese Nikkei, and many more.
All these investments supplement his passive income while he focuses on his main work of buying and selling the companies.
Although Nepalese are not allowed to invest in these foreign exchange they can definitely invest in NEPSE.
This will allow them to have a steady source of passive income while they can focus on their main job.
With a steady source of money behind them, they can now focus with laser-like precision on their work without any stress of how to make the ends meet.
Protect Your Money Against Economics Hurdles
An honest man making his living through day-to-day hard work doesn’t understand how the economy works.
He tries to save money by opening a fixed deposit account in the bank but they offer a limited rate of interest.
Plus he cannot use that money for some time.
So what is the other way to protect yourself from the troubles of economic hardships?
The answer is as you have guessed – investing in stocks.
Having a secondary market account allows you to invest in stocks at any given time period and acquire money for the future with high rates of returns.
In the recent Covid-induced lockdown, the stock market NEPSE was the only sector open for business. This is why investors who bought shares at that time benefitted greatly.
Unlike every other industry, the stock market proved to be a great hedge against the biggest virus outbreak worldwide.
Well, we cannot force anyone to open a secondary market account for trading but we sure can give them suggestions on how to do it and why should you do it.
At the end of the day, it is you who have to make the decision whether you want to live in financial security or be insecure all your life.