Are you looking to start investing in the Nepal Stock Exchange but don’t know where to begin? This comprehensive NEPSE 30-day learning plan for beginners will transform you from a complete novice to a confident investor ready to make your first trade. Whether you’re a student, professional, or anyone interested in building wealth through the stock market, this step-by-step guide will help you master NEPSE trading basics in just one month.
With over 1.6 million Nepalis already investing in the stock market and the NEPSE index showing significant growth potential, there’s never been a better time to learn how to invest in NEPSE. This guide breaks down complex concepts into daily, digestible lessons that anyone can follow, regardless of their financial background.
What is NEPSE? Understanding Nepal Stock Exchange Basics
Before diving into your NEPSE learning journey, it’s crucial to understand what NEPSE actually is and how it functions as Nepal’s primary capital market platform.
History and Evolution of NEPSE
The Nepal Stock Exchange (NEPSE) was established on January 13, 1994, replacing the Securities Exchange Centre that had operated since 1976. As Nepal’s only stock exchange, NEPSE has grown from listing just 62 companies to now hosting 244 companies across 13 different sectors with a market capitalization exceeding NPR 4.6 trillion.
The exchange underwent significant modernization in 2020 with the introduction of the NEPSE Automated Trading System (NATS), replacing the traditional open outcry system. This digital transformation has made it easier for beginners to start investing in NEPSE from anywhere in Nepal, contributing to the exponential growth in retail investor participation.
How NEPSE Works for Beginners
Think of NEPSE as a digital marketplace where company shares are bought and sold, similar to how vegetables are traded in a local market, but with sophisticated electronic systems ensuring fair and transparent transactions. The exchange operates Sunday through Thursday from 11:00 AM to 3:00 PM, excluding public holidays.
When you invest in NEPSE, you’re essentially buying ownership stakes in Nepali companies. These companies raise capital through Initial Public Offerings (IPOs) in the primary market, after which their shares trade freely in the secondary market based on supply and demand dynamics. The NEPSE index, which tracks overall market performance, serves as a barometer for Nepal’s economic health.
NEPSE Market Structure and Participants
The NEPSE ecosystem consists of several key players that beginners must understand:
- Securities Board of Nepal (SEBON): The regulatory body that oversees and monitors all market activities
- CDS and Clearing Limited (CDSC): Manages the central depository system and MeroShare platform
- Licensed Brokers: Over 50 authorized intermediaries who facilitate buying and selling
- Depository Participants (DPs): Banks and financial institutions that maintain your Demat accounts
- Listed Companies: The 244 companies across various sectors whose shares you can trade
Week 1: Foundation – Essential NEPSE Knowledge for Beginners
Your first week in this NEPSE learning plan focuses on building a solid foundation of stock market concepts essential for successful investing.
Day 1-3: Understanding Stock Market Fundamentals
Begin your journey by grasping these core concepts:
Day 1: Learn what stocks represent (ownership in companies), how companies use stock markets to raise capital, and why people invest. Study the difference between equity and debt, understanding that when you buy shares, you become a part-owner entitled to dividends and capital appreciation.
Day 2: Explore the concepts of risk and return in NEPSE investing. Higher potential returns typically come with higher risks. Learn about market volatility, systematic vs. unsystematic risk, and how diversification helps manage risk in your portfolio.
Day 3: Understand market capitalization (small-cap, mid-cap, large-cap companies in NEPSE), trading volume, and liquidity. Study how supply and demand determine stock prices and what factors influence investor sentiment in the Nepali market.
Day 4-5: NEPSE Sectors and Indices Explained
Day 4: Study NEPSE’s 13 major sectors:
- Banking: Commercial banks like Nabil, NIC Asia
- Development Banks: Regional financial institutions
- Hydropower: Companies generating electricity
- Insurance: Life and non-life insurance companies
- Finance: Non-banking financial companies
- Manufacturing: Production and processing companies
- Microfinance: Small-scale lending institutions
- Hotels and Tourism: Hospitality sector companies
- Trading: Import/export businesses
- Others: Diverse businesses not fitting other categories
Day 5: Learn about the NEPSE Index calculation methodology (market capitalization-weighted), sub-indices for each sector, and how to interpret index movements. Understand circuit breakers (4%, 5%, 6% limits) that halt trading during extreme volatility.
Day 6-7: Basic Investment Terminology
Master essential NEPSE trading terminology:
Day 6:
- IPO/FPO: Initial and Follow-on Public Offerings
- Demat Account: Electronic account holding your shares
- BOID: Beneficial Owner Identification number
- MeroShare: Online platform for IPO applications
- C-ASBA: Centralized Application Supported by Blocked Amount
- Book Closure: Period when share transfers are suspended for corporate actions
Day 7:
- Bull/Bear Market: Rising and falling market trends
- Blue Chip Stocks: Large, stable companies with strong track records
- P/E Ratio: Price-to-Earnings ratio for valuation
- EPS: Earnings Per Share
- Dividend: Profit distribution to shareholders
- Bonus Shares: Free additional shares to existing shareholders
Week 2: Account Setup – How to Start Investing in NEPSE
The second week of your NEPSE beginner’s journey involves setting up the necessary accounts and choosing service providers.
Day 8-10: Opening Your Demat Account Step-by-Step
Day 8: Research and select a Depository Participant (DP). Major banks offering DP services include:
- Nabil Bank
- Global IME Bank
- NIC Asia Bank
- Himalayan Bank
- Standard Chartered Bank
Compare their fees (typically NPR 50-150 annual maintenance), branch network, and customer service quality.
Day 9: Gather required documents:
- Citizenship certificate (original and photocopy)
- Passport-size photographs (2-4 pieces)
- PAN card (mandatory for share trading)
- Bank account details
- Location map of your residence
- Father/Mother’s name and grandfather’s name
Day 10: Visit your chosen DP branch to:
- Fill out the Demat account opening form
- Submit all documents for verification
- Complete KYC (Know Your Customer) requirements
- Receive your 16-digit BOID number (usually within 2-3 days)
- Activate online access if available
Day 11-12: Setting Up MeroShare for IPO Applications
Day 11: Access MeroShare registration:
- Visit meroshare.cdsc.com.np
- Click “Register” and enter your BOID number
- Select your DP from the dropdown menu
- Fill in personal details matching your Demat account
- Create a strong username and password
- Verify your email and mobile number
Day 12: Configure MeroShare for IPO applications:
- Link your bank account for C-ASBA
- Obtain your CRN (C-ASBA Registration Number) from your bank
- Practice navigating the dashboard
- Check the “Current Issue” section for active IPOs
- Review your portfolio and transaction history features
Day 13-14: Choosing the Right Broker in Nepal
Day 13: Research top NEPSE brokers:
- Naasa Securities: Nepal’s largest broker with comprehensive services
- Sanima Securities: Excellent research and advisory services
- Prabhu Capital: Systematic investment plans available
- NMB Securities: Integrated banking and trading services
- Ashutosh Brokerage: Good for beginners with educational support
Evaluate based on:
- Commission rates (0.24%-0.36% based on volume)
- Trading platform quality
- Research reports availability
- Customer support responsiveness
- Branch proximity to your location
Day 14: Open your trading account:
- Visit your chosen broker’s office
- Fill out the account opening form
- Submit BOID details and KYC documents
- Receive TMS (Trading Management System) login credentials
- Complete initial platform training if offered
Week 3: Analysis Skills – NEPSE Trading Strategies for Beginners
Week three develops your analytical abilities to make informed investment decisions in NEPSE.
Day 15-17: Fundamental Analysis Basics
Day 15: Learn to evaluate company fundamentals:
- Revenue Growth: Is the company’s income increasing yearly?
- Profit Margins: How efficiently does it convert sales to profit?
- Market Share: Company’s position within its sector
- Management Quality: Track record and corporate governance
- Competitive Advantages: What makes this company unique?
Day 16: Master key financial ratios for NEPSE stocks:
- P/E Ratio: Compare price relative to earnings (NEPSE average ~25)
- P/B Ratio: Price-to-book value (below 1.5 often indicates value)
- ROE: Return on Equity (above 15% is generally good)
- Debt-to-Equity: Financial leverage (below 1 is conservative)
- Current Ratio: Liquidity measure (above 1.5 is healthy)
Day 17: Practice analyzing a NEPSE company:
- Download annual reports from company websites
- Calculate the key ratios learned
- Compare with sector averages
- Read management discussion and analysis
- Check recent news and announcements
Day 18-19: Introduction to Technical Analysis
Day 18: Understand technical analysis basics:
- Candlestick Charts: Reading price action patterns
- Support and Resistance: Key price levels where stocks tend to bounce
- Trend Lines: Identifying uptrends, downtrends, and sideways movements
- Volume Analysis: Confirming price movements with trading activity
- Chart Timeframes: Daily, weekly, monthly perspectives
Day 19: Learn essential technical indicators:
- Moving Averages: 20-day, 50-day, 200-day trends
- RSI (Relative Strength Index): Overbought (>70) and oversold (<30) levels
- MACD: Trend following momentum indicator
- Bollinger Bands: Volatility and price extremes
Practice on NEPSE Alpha charts or ShareSansar’s technical analysis tools.
Day 20-21: Reading Financial Statements
Day 20: Understand NEPSE company financial statements:
- Income Statement: Revenue, expenses, net profit
- Balance Sheet: Assets, liabilities, shareholder equity
- Cash Flow Statement: Operating, investing, financing activities
- Notes to Accounts: Important details and explanations
Focus on identifying:
- Revenue trends over 3-5 years
- Profit margin improvements or deterioration
- Asset quality and composition
- Debt levels and repayment capacity
Day 21: Learn sector-specific metrics:
- Banks: NPL ratio, Capital Adequacy Ratio, Net Interest Margin
- Insurance: Combined ratio, premium growth, investment income
- Hydropower: Plant load factor, PPA rates, generation capacity
- Manufacturing: Capacity utilization, inventory turnover, export percentage
Week 4: Practical Trading – Your First NEPSE Investment
The final week puts your knowledge into practice with real-world application.
Day 22-24: Paper Trading and Market Simulation
Day 22: Set up your paper trading portfolio:
- Create a virtual portfolio of NPR 100,000
- Select 5-7 stocks from different sectors
- Document your investment thesis for each pick
- Track daily prices and calculate returns
- Use Excel or online portfolio trackers
Day 23: Practice different order types:
- Market Orders: Immediate execution at current price
- Limit Orders: Specific price targets
- Stop-Loss Orders: Risk management tools
- Calculate brokerage costs and taxes for each trade
- Understand the impact of costs on returns
Day 24: Simulate various market scenarios:
- How would your portfolio perform in a 10% market correction?
- What if interest rates increase?
- Impact of positive/negative news on holdings
- Practice rebalancing your portfolio
- Document lessons learned from paper trading
Day 25-27: IPO Application Process
Day 25: Master the IPO application process:
- Check current IPOs on MeroShare
- Read the prospectus carefully
- Analyze company fundamentals
- Understand the business model
- Evaluate pricing (usually NPR 100 per share)
Day 26: Complete your first IPO application:
- Login to MeroShare
- Navigate to “My ASBA”
- Select “Apply for Issue”
- Choose IPO and enter quantity (minimum 10 shares)
- Select your bank and CRN
- Submit application and note the reference number
Day 27: Understand IPO allotment and listing:
- Allotment process (lottery for oversubscribed issues)
- Checking results on CDSC website
- Refund process for unallotted amounts
- Listing timeline (typically 7-10 days)
- First-day trading strategies
Day 28-30: Making Your First Trade
Day 28: Prepare for your first NEPSE trade:
- Select a blue-chip stock for safety (e.g., major bank)
- Set your investment amount (start small, NPR 5,000-10,000)
- Determine entry price based on analysis
- Set stop-loss level (typically 8-10% below entry)
- Calculate expected returns and timeline
Day 29: Execute your first buy order:
- Login to your broker’s TMS platform
- Check market depth and recent trades
- Place your order during market hours (11 AM – 3 PM)
- Confirm order execution
- Note the T+3 settlement timeline
Day 30: Review and plan ahead:
- Evaluate your 30-day learning journey
- Identify areas needing more study
- Set investment goals for next 6 months
- Create a systematic investment plan
- Join NEPSE investor communities for continued learning
Essential NEPSE Trading Tools and Resources
Having the right tools is crucial for successful NEPSE investing for beginners.
Best NEPSE Apps for Beginners
Mobile Applications that every beginner should install:
- MeroLagani App: Comprehensive portfolio tracking, live prices, and market news
- NEPSE Alpha: Advanced charting and technical analysis tools
- ShareSansar: Market data, IPO updates, and financial news
- Smart Wealth (NIC Asia): Integrated banking and trading
- Nabil Invest: Direct trading through mobile platform
Each app offers unique features – use multiple apps to get comprehensive market coverage.
Reliable Information Sources
Stay informed with these trusted NEPSE information sources:
Official Sources:
- NEPSE official website (nepalstock.com)
- SEBON regulatory announcements
- CDSC for corporate actions
Financial Portals:
- ShareSansar.com – Most comprehensive financial portal
- MeroLagani.com – Real-time data and analysis
- BizPati.com – Business news and updates
- NepseKhabar.com – Market-focused news
Research Reports:
- Broker research departments
- Nepal Rastra Bank economic reports
- IMF and World Bank Nepal updates
Online Learning Platforms
Continue your education with these NEPSE learning resources:
- ShareSansar Academy: Structured courses on investing
- YouTube Channels: Investors Hub Nepal, NEPSE Tutorials
- Facebook Groups: NEPSE Investors Community, Share Market Nepal
- Webinars: Regular sessions by brokers and SEBON
- Investment Clubs: Local investor groups for peer learning
Common Mistakes to Avoid in NEPSE Trading
Learn from these common beginner mistakes to protect your capital:
1. Investing Without Research: Never buy stocks based on tips or rumors. Always conduct your own analysis and understand what you’re buying.
2. Emotional Trading: Fear and greed are your enemies. Stick to your investment plan regardless of market emotions.
3. Overtrading: Frequent buying and selling increases costs and rarely improves returns. Focus on quality over quantity.
4. Ignoring Diversification: Don’t put all money in one stock or sector. Spread risk across different investments.
5. Chasing Quick Profits: NEPSE investing is a marathon, not a sprint. Focus on long-term wealth creation.
6. Neglecting Stop-Losses: Always have an exit strategy. Protect capital with predetermined loss limits.
7. FOMO Investing: Don’t buy just because everyone else is. Miss some opportunities rather than make poor investments.
NEPSE Tax Implications for New Investors
Understanding tax obligations is crucial for calculating actual returns:
Capital Gains Tax:
- Short-term (less than 365 days): 7.5% for individuals
- Long-term (more than 365 days): 5% for individuals
- Automatically deducted by brokers as TDS
Dividend Tax:
- 5% final withholding tax
- First NPR 25,000 exempt for listed companies
- Must be included in annual tax returns
Tax Planning Tips:
- Hold quality stocks for over one year to reduce tax
- Maintain proper documentation of all transactions
- File returns on time to avoid penalties
- Consider tax impact before selling
Building Your Investment Portfolio
Create a robust NEPSE portfolio suitable for beginners:
Portfolio Allocation Strategy:
- 30% Banking Sector: Stable dividends and growth
- 25% Insurance: Consistent performers
- 20% Hydropower: Long-term growth potential
- 15% Manufacturing: Economic growth participation
- 10% Others/Cash: Flexibility for opportunities
Selection Criteria:
- Start with index heavyweight stocks
- Focus on consistent dividend payers
- Prefer companies with transparent management
- Balance growth and value stocks
- Maintain 15-20% cash for opportunities
Regular Review:
- Monthly performance tracking
- Quarterly rebalancing if needed
- Annual strategy review
- Continuous learning and adjustment
Risk Management Strategies
Protect your capital with these risk management techniques:
Position Sizing: Never invest more than 5-10% in a single stock. This limits losses if one investment performs poorly.
Stop-Loss Discipline: Set stop-losses at 8-10% below purchase price. This prevents small losses from becoming devastating.
Investment Horizon: Match investment timeline with goals. Short-term needs shouldn’t be in stocks.
Emergency Fund: Keep 6 months of expenses in savings before investing. Never invest borrowed money.
Regular Monitoring: Review portfolio weekly but avoid daily obsession. React to fundamental changes, not daily fluctuations.
Advanced Learning Resources
After completing the 30-day plan, continue growing with these advanced resources:
Books:
- “The Intelligent Investor” by Benjamin Graham
- “Common Stocks and Uncommon Profits” by Philip Fisher
- “One Up On Wall Street” by Peter Lynch
Courses:
- SEBON Investor Awareness Programs
- Broker-sponsored training sessions
- Online courses on Coursera/Udemy
Certifications:
- NISM certifications from India (applicable concepts)
- CFA Institute materials (advanced)
Mentorship:
- Join local investment clubs
- Find experienced investor mentors
- Participate in online forums
Success Stories and Case Studies
Learn from successful NEPSE investors:
Case Study 1: A teacher who started with NPR 10,000 in 2015 built a portfolio worth NPR 500,000 by focusing on banking stocks and reinvesting dividends.
Case Study 2: A student who learned technical analysis made 300% returns on Mahila Laghubitta IPO by holding for the right duration.
Case Study 3: An IT professional who invested systematically in hydropower stocks benefited from the sector’s 42% rise in 2024.
Key Lessons:
- Patience pays in NEPSE investing
- Continuous learning improves returns
- Disciplined approach beats speculation
- Diversification protects wealth
- Long-term perspective creates wealth
Conclusion: Your NEPSE Investment Journey
Congratulations on completing this comprehensive 30-day NEPSE learning plan for beginners! You’ve transformed from someone with no market knowledge to an investor ready to participate in Nepal’s growing capital market.
Remember, this guide provides the foundation, but successful investing requires continuous learning and practice. The NEPSE market offers tremendous opportunities for wealth creation, but it demands patience, discipline, and ongoing education.
Start small, learn from mistakes, and gradually increase your investment as confidence and knowledge grow. The journey of a thousand miles begins with a single step, and you’ve just taken your first step into the exciting world of NEPSE investing.
Your success in NEPSE won’t be determined by how quickly you make profits, but by how consistently you apply these principles over time. Stay informed, stay disciplined, and stay invested for the long term.
Welcome to the community of NEPSE investors! May your investment journey be profitable and enriching.
FAQs About NEPSE for Beginners
1. How much money do I need to start investing in NEPSE?
You can start with as little as NPR 1,000 by applying for IPOs. For secondary market trading, NPR 10,000-20,000 is recommended to manage brokerage costs effectively and build a small diversified portfolio.
2. Can I invest in NEPSE from outside Nepal?
Yes, Non-Resident Nepalis (NRNs) can invest in NEPSE through specific provisions. You need an NRN Demat account and must route investments through approved banking channels.
3. How long does it take to receive shares after buying?
NEPSE follows a T+3 settlement system. Shares appear in your Demat account three business days after purchase, while sellers receive payment within 5 business days.
4. What is the best sector for beginners to invest in NEPSE?
Banking and insurance sectors are generally recommended for beginners due to their stability, regular dividends, and easier-to-understand business models.
5. Is it necessary to have technical analysis knowledge for NEPSE trading?
While helpful, technical analysis isn’t mandatory for long-term investors. Fundamental analysis and understanding company basics are more important for beginners focusing on long-term wealth creation.
