24 Stock Terms That You Should Know Before Entering Stock Market in Nepal

Basic Terms You Should Know Before Entering Stock Market in Nepal:

Shares:

It is the portion or parts of the company's capital.Larger the shares you have means you have a access larger portion of right to company's capital and profit.

Stocks:

It is the collective form of shares.Shares of any organization in larger numbers refers stocks of that organization.It refers the ownership of individual over that company.

IPO:

Full form of IPO is Initial Public Offerings.When company is newly established or old company wants to expand its capital,they release shares to public which are known as IPOs.

FPO:

FPO means Follow On Public Offerings and it is completly different from secondary market.A company generally issues FPO after releasing IPOs to increase the equity of company.

Broker:

Broker is the organization which is responsible for the trading and transaction of shares.In Nepal there are 50 broker houses.They can buy shares for you and sell your shares to others by taking certain amount of commission.

NEPSE:

Nepal Stock Exchange Board(NEPSE) is the board which regulates the transaction of shares and provides the market fludity on stocks.

SEBON:

Security Exchange Board of Nepal(SEBON) is the organization which was formed directly under the government which makes the new laws,decide the rating of companies,allow or disallow the issuance of IPO's,verify the right shares,bonus shares etc. 

NEPSE INDEX:

It is the point published by NEPSE at the end of day after completing the transaction.For eg;if NEPSE index is 1220 of any day means at the end of transaction at that day,market closes at this point.

Sector:

It is simply the area of total market.For eg;banking,hydropower,life insurance and non-life insurance are the main sectors to invest in Stock market in Nepal.

Stock Symbol:

It is the symbol by which transaction of that stock happens in market.For eg; whole Global IME bank limited is difficult to put to do transaction.So its short form as GBIME is used as its stock symbol for trading in market.

Market Sub Indices:

It is simply the NEPSE index of different sectors.Every sectors will not be traded at the same NEPSE index where market goes.So every sectors carry their own index high or low as that of market NEPSE index.For eg;if market closes at 1220 points then banking sector can close at 1000 points,hydropower sector can close at 800,insurance sector can close at 3000 points,non-life insurance sector can close at 2500 points.

Market Capital:

It is the total capital of any company at that time of market.For eg;if any company has 3000000 amount of shares and its single share is traded at Rs.300 then the market capitalization of that company is the product of total amount of shares and its market price per share.

Dividend:

The amount given to company's shareholders from its profits is called dividend.Most of the company gives dividend annually certain percentages as per their shares to its shareholders.

Bonus Shares:

Bonus shares are the shares distributed by a company to its shareholders from their profit to increase the capital of company.Most of the companies give certain percent bonus shares to its shareholders annually in Nepal.

Right Shares:

Right shares are like bonus shares.Both shares are issued for the purpose to increase the capital of company.Main difference between them is bonus shares are free of any charge while right shares have to purchase.Right shares are mostly issued in percentage forms like 60%,120% etc.

Bull Market:

In simple words,bull market is that condition of market in which price of most of the companies are increasing and NEPSE index reaches its peak value.

Bear Market:

It is exactly the opposite of Bull market i.e;most of the companies go down and NEPSE index reaches its lowest points.

Open:

It represents the opening price of that stock at that particular day.

Close:

It represents the closing price of any stock at that day.

Low:

It represents the lowest price of that stock at any day.

High:

It represents the highest price of any particular stock at that day.

Price History:

It simply is the history of market prices of any company over a certain time.

Auction Shares:

When a company auction its unbuying IPOs,FPOs,right shares to public then they are called as auction shares.In auction shares you have to bid the price and the highest bidder will take that shares.Minimun quantity to apply for auction shares in Nepal is 100 kitta.

Candle Stick Chart:

It is a chart showing the different informations of stock in a candle stick forms.