๐ Bilingual Financial Glossary — 2026
150 Financial Terms
Every Nepali Investor Should Know
เคจेเคชाเคฒी เคฐ เค ंเค्เคฐेเคीเคฎा เฅงเฅซเฅฆ เคฎเคนเคค्เคค्เคตเคชूเคฐ्เคฃ เคตिเคค्เคคीเคฏ เคถเคฌ्เคฆเคนเคฐू
Nepal's most complete bilingual financial glossary — from beginner basics to advanced market concepts. Searchable, filterable across 8 categories.
150Terms Covered
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Financial literacy is the foundation of every successful investment decision. Whether you are a first-time investor applying for an IPO on MeroShare, a seasoned trader watching NEPSE, or an NRN building a long-term portfolio from abroad, mastering this vocabulary gives you the language to analyse, compare, and act with confidence.
This expanded glossary covers 150 terms across 8 categories — from foundational concepts every beginner must know, to advanced market mechanisms, macroeconomic forces, and corporate finance metrics used by professional analysts. Every term includes its Nepali equivalent and a Nepal-specific explanation.
Basic
Market
Investing
Banking
Tax & Reg
Advanced
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150 terms found
#01
Share (Equity / Stock)
๐ณ๐ต เคธेเคฏเคฐ
A unit of ownership in a company. When you buy a share, you become a part-owner entitled to profits (dividends) and assets. In Nepal, shares are traded on NEPSE, held in DEMAT accounts, and typically have a face value of NPR 100.
#02
Dividend
๐ณ๐ต เคฒाเคญांเคถ
A portion of a company's profit distributed to shareholders as cash dividends (เคจเคเคฆ เคฒाเคญांเคถ) or bonus shares (เคฌोเคจเคธ เคธेเคฏเคฐ). Cash dividends carry 5% withholding tax in Nepal, deducted at source before payment reaches your bank account.
#03
Capital
๐ณ๐ต เคชूँเคी
Money or assets used for investment or running a business. Paid-up capital (เคुเค्เคคा เคชूँเคी) is a key figure in every listed company's balance sheet and a crucial metric for comparing companies of similar size on NEPSE.
#04
Interest
๐ณ๐ต เคฌ्เคฏाเค
The cost of borrowing or the reward for saving/lending. Expressed as a percentage per year. NRB's policy rate directly influences deposit and lending rates across all Nepali commercial banks, affecting the profitability of listed banking stocks.
#05
Asset
๐ณ๐ต เคธเคฎ्เคชเคค्เคคि
Anything of economic value owned by a person or company — shares, bonds, real estate, or cash. Understanding a company's total assets vs. its liabilities helps investors gauge financial health when analyzing NEPSE-listed companies.
#06
Liability
๐ณ๐ต เคฆाเคฏिเคค्เคต
Financial obligations or debts owed. A company with high liabilities relative to assets carries more risk. The Debt-to-Equity Ratio — lower is safer — is calculated from this figure and is key for evaluating Nepali manufacturing and hydropower companies.
#07
Portfolio
๐ณ๐ต เคฒเคाเคจी เคธँเค्เคฐเคน
The complete collection of all financial investments held by an investor. Diversifying a portfolio (เคตिเคตिเคงीเคเคฐเคฃ) across banking, hydropower, insurance, and microfinance sectors reduces sector-specific risk on NEPSE. View your full portfolio anytime on MeroShare.
#08
Inflation
๐ณ๐ต เคฎुเคฆ्เคฐाเคธ्เคซीเคคि
The general rise in prices over time, eroding purchasing power. Nepal's annual inflation has ranged 5–10% in recent years. Equity investments that beat inflation are essential for long-term wealth preservation — a primary argument for preferring stocks over fixed deposits.
#09
Profit / Return
๐ณ๐ต เคจाเคซा / เคฒाเคญ
Financial gain from an investment, from two sources: capital gains (selling shares above purchase price) and dividends. Return is usually expressed as a percentage of the original investment, allowing comparison between different assets.
#10
Loss
๐ณ๐ต เคाเคा / เคจोเค्เคธाเคจ
A negative outcome when investments decline or costs exceed income. On NEPSE, a capital loss occurs when a share's selling price is below the WACC (average buy price). Nepal's tax rules currently don't allow capital losses to offset capital gains from other stocks.
#11
NEPSE (Nepal Stock Exchange)
๐ณ๐ต เคจेเคชाเคฒ เคธ्เคเค เคเค्เคธเคेเคจ्เค
Nepal's sole stock exchange, regulated by SEBON, operating Sunday–Thursday, 11 AM–3 PM NST. Lists companies from banking, hydropower, insurance, manufacturing, and microfinance. The NEPSE Index is the benchmark for overall market performance, peaking at 3,198.60 in August 2021.
#12
NEPSE Index (เคธूเคเคाเค्เค)
๐ณ๐ต เคธूเคเคाเค्เค
A market-cap-weighted index tracking all NEPSE-listed stocks — Nepal's equivalent of India's SENSEX. All-time high: 3,198.60 points (August 2021). A rising index signals broad market growth; falling index signals selling pressure. Sub-indices track banking, hydropower, and insurance sectors separately.
#13
IPO (Initial Public Offering)
๐ณ๐ต เคช्เคฐाเคฐเคฎ्เคญिเค เคธाเคฐ्เคตเคเคจिเค เคจिเคฐ्เคเคฎเคจ
A company's first public share offer. In Nepal, applied through MeroShare's C-ASBA system — completely online. Allotment is lottery-based when oversubscribed. Minimum application: NPR 1,000 (10 units × NPR 100 face value). Results published within 5–7 business days of closing.
#14
FPO (Further Public Offering)
๐ณ๐ต เคฅเคช เคธाเคฐ्เคตเคเคจिเค เคจिเคฐ्เคเคฎเคจ
Additional shares issued by an already-listed company to raise more capital. Can dilute existing shareholders' ownership percentage unless they participate. Applied via MeroShare. Common among Nepali commercial banks needing to meet NRB's minimum capital requirements.
#15
Right Share (เคนเคเคช्เคฐเคฆ เคธेเคฏเคฐ)
๐ณ๐ต เคนเคเคช्เคฐเคฆ เคธेเคฏเคฐ
An offer giving existing shareholders the right to buy new shares at face value (NPR 100) before public issuance, protecting them from dilution. Rights shares are one of the most common ways NEPSE-listed companies raise capital. Subscribe via MeroShare or forfeit the right.
#16
Bonus Share (เคฌोเคจเคธ เคธेเคฏเคฐ)
๐ณ๐ต เคฌोเคจเคธ เคธेเคฏเคฐ
Free additional shares issued from retained earnings. A 20% bonus on 100 shares = 20 extra shares at no cost, auto-credited to your DEMAT. Total holding increases but book value per share decreases proportionally. Currently not taxable on issuance in Nepal.
#17
SEBON
๐ณ๐ต เคงिเคคोเคชเคค्เคฐ เคฌोเคฐ्เคก เคจेเคชाเคฒ
Securities Board of Nepal — the apex regulator for Nepal's capital markets. Licenses brokers, merchant banks, and AMCs; approves IPOs; sets investor protection rules; enforces the Securities Act 2063. All legitimate intermediaries must be SEBON-registered. Website: sebon.gov.np.
#18
DEMAT Account (BOID)
๐ณ๐ต เคกिเคฎ्เคฏाเค เคाเคคा
Digital account holding shares electronically. Maintained by CDSC. Each account has a unique 16-digit BOID number — your identity on NEPSE and MeroShare. Mandatory for all investing. Annual maintenance fee: NPR 100. Maximum 2 DEMAT accounts per person in Nepal.
#19
MeroShare
๐ณ๐ต เคฎेเคฐोเคธेเคฏเคฐ
CDSC's official platform (meroshare.cdsc.com.np) for IPO applications, portfolio tracking, WACC viewing, and share transfers. The C-ASBA system within MeroShare blocks your bank funds during IPO application, releasing them if unallotted. Annual fee: NPR 150 (NPR 100 DEMAT + NPR 50 service).
#20
TMS (Trading Management System)
๐ณ๐ต เค्เคฐेเคกिเค เคฎ्เคฏाเคจेเคเคฎेเคจ्เค เคธिเคธ्เคเคฎ
The online trading platform from NEPSE-licensed brokers where investors place buy/sell orders. Search by ticker symbol (NABIL = Nabil Bank), enter Kitta (quantity) and price, and submit during market hours. Brokerage: 0.36–0.60% of transaction value. Nepal has 50+ licensed brokers.
#21
NAV (Net Asset Value)
๐ณ๐ต เคुเคฆ เคธเคฎ्เคชเคค्เคคि เคฎूเคฒ्เคฏ
Per-unit value of a mutual fund: (Total Assets − Liabilities) ÷ Units Outstanding. Published daily for open-ended funds, weekly for closed-ended. A rising NAV = growing fund value. Compare closed-end fund NAV vs. market price to spot premium or discount trading opportunities.
#22
Mutual Fund
๐ณ๐ต เคธเคนเคญाเคी เคोเคท / เคฎ्เคฏुเคुเค
เคฒ เคซเคจ्เคก
A SEBON-regulated pooled investment managed by a licensed AMC (Asset Management Company). Collects money from many investors and deploys it across a diversified NEPSE portfolio. Open-ended funds offer daily liquidity; closed-ended funds are listed and traded on NEPSE.
#23
SIP (Systematic Investment Plan)
๐ณ๐ต เคจिเคฏเคฎिเคค เคฒเคाเคจी เคฏोเคเคจा
Investing a fixed amount monthly regardless of market levels — creating rupee-cost averaging. Reduces timing risk and builds discipline. In Nepal, SIPs start from NPR 1,000/month via open-ended fund AMCs. Ideal for salaried investors who cannot time the market.
#24
Capital Gain
๐ณ๐ต เคชूँเคीเคเคค เคฒाเคญ
Profit from selling an asset above its purchase price. Nepal's 2026 rates (Budget 2083/84): 10% for shares held ≤1 year; 7.5% for shares held >1 year. Tax is auto-deducted by broker at point of sale — now treated as a final tax (no additional income tax bracket adjustments).
#25
Market Capitalization
๐ณ๐ต เคฌเคाเคฐ เคชूँเคीเคเคฐเคฃ
Current Share Price × Total Shares Outstanding. Large-cap = major commercial banks; small-cap = microfinance or smaller firms. NEPSE's total market cap reflects Nepal's overall equity market depth and is tracked by institutional investors monitoring capital flow.
#26
P/E Ratio (Price-to-Earnings)
๐ณ๐ต เคฎूเคฒ्เคฏ-เคเคฏ เค
เคจुเคชाเคค
Share Price ÷ EPS. High P/E = premium for growth; low P/E = possible undervaluation. Nepal's banking sector typically trades at 12–20× P/E. Always compare P/E within the same sector — a bank's P/E should not be compared to a hydropower company's.
#27
EPS (Earnings Per Share)
๐ณ๐ต เคช्เคฐเคคि เคธेเคฏเคฐ เคเคฏ
Net Profit ÷ Total Shares. Higher EPS = greater profitability per share. Published quarterly in financial reports submitted to SEBON and NEPSE. A consistent upward trend in EPS is one of the strongest signals of a quality company for long-term investors.
#28
Book Value
๐ณ๐ต เคชुเคธ्เคคเคเคเคค เคฎूเคฒ्เคฏ
(Total Assets − Total Liabilities) ÷ Shares. Shares trading below book value may be undervalued. Published quarterly for all listed companies. A key tool for fundamental analysis of Nepali banking and finance company shares, where assets are largely quantifiable loans and investments.
#29
Bull Market (เคคेเคी เคฌเคाเคฐ)
๐ณ๐ต เคคेเคी เคฌเคाเคฐ
A sustained period of rising prices (20%+ gain from lows). High investor confidence, strong volumes, peak IPO activity. Nepal's great bull run: 2019–2021, NEPSE rising from ~1,100 to 3,198 points. New investors who entered late faced the subsequent bear market correction.
#30
Bear Market (เคฎंเคฆी เคฌเคाเคฐ)
๐ณ๐ต เคฎंเคฆी เคฌเคाเคฐ
Sustained price decline (20%+ from highs). Negative sentiment, high selling pressure, slow IPO market. Post-2021 Nepal experienced prolonged bearish conditions, with the index largely stuck below 3,000. Long-term investors use bear markets to accumulate quality stocks at discounted prices.
#31
NRB (Nepal Rastra Bank)
๐ณ๐ต เคจेเคชाเคฒ เคฐाเคท्เค्เคฐ เคฌैंเค
Nepal's central bank (est. 1956), regulating all banks and financial institutions. Sets monetary policy, controls foreign exchange, manages the Rupee. NRB directives on dividend caps, CD ratios, and capital requirements directly drive NEPSE's banking sub-index performance.
#32
Fixed Deposit
๐ณ๐ต เคฎिเคฏाเคฆी เคจिเค्เคทेเคช
Guaranteed-return bank deposit for a fixed term (3 months–5 years). Rates typically 8–12% in Nepal. Capital is protected but may not beat inflation long-term. Ideal for conservative or short-term investors. FD interest income is subject to 5% TDS in Nepal.
#33
CD Ratio (Credit-to-Deposit)
๐ณ๐ต เคเคฐ्เคा-เคจिเค्เคทेเคช เค
เคจुเคชाเคค
Total loans ÷ total deposits, capped at 90% by NRB. High CD ratio = more lending = more profit but more risk. Bank investors monitor CD ratios closely as a signal of lending capacity, risk profile, and future dividend sustainability.
#34
NPL (Non-Performing Loan)
๐ณ๐ต เคเคฐाเคฌ เคเคฐ्เคा
Loans unpaid for 90+ days. High NPL = rising credit risk and potential future losses. Nepal's banking sector saw NPLs surge in 2023–24. An NPL above 5% warrants caution for equity investors. Banks must provision (set aside) capital against NPLs, reducing their distributable profit.
#35
NRN Account (NRFC)
๐ณ๐ต เค
เคจिเคตाเคธी เคจेเคชाเคฒी เคตिเคฆेเคถी เคฎुเคฆ्เคฐा เคाเคคा
Specialized bank account for Non-Resident Nepalis holding foreign currencies (USD, GBP, EUR, AUD). The gateway for NRN investment in NEPSE. Funds are transferred from abroad, converted to NPR, and channeled to brokers or AMCs. Repatriation of proceeds is permitted under NRB rules.
#36
ROE (Return on Equity)
๐ณ๐ต เคธ्เคตाเคฎिเคค्เคตเคฎा เคช्เคฐเคคिเคซเคฒ
Net Profit ÷ Shareholders' Equity × 100. ROE above 15% signals a well-managed company. Nepali commercial banks with consistently high ROE tend to maintain dividend-paying capacity. Compare ROE trends over 3+ years rather than single-year figures.
#37
Merger / Acquisition
๐ณ๐ต เคเคीเคเคฐเคฃ / เคฎเคฐ्เคเคฐ
Two companies combining into one. NRB's merger policy reduced Nepali commercial banks from 27 to 20 (2020–2025). Affects share pricing, BOID migrations, and bonus share calculations during transition. Merged entities often issue swap ratios determining how many new shares existing holders receive.
#38
CAR (Capital Adequacy Ratio)
๐ณ๐ต เคชूँเคी เคชเคฐ्เคฏाเคช्เคคเคคा เค
เคจुเคชाเคค
Capital ÷ risk-weighted assets. NRB mandates minimum 11% CAR for commercial banks. Higher CAR = better financial buffer. Banks below the minimum face regulatory intervention and cannot pay dividends — a critical warning sign for bank stock investors.
#39
Debenture / Bond
๐ณ๐ต เคเคฃเคชเคค्เคฐ
Fixed-income debt instrument. Holders are creditors (not owners), receiving fixed interest for a set period, then principal at maturity. Safer than shares but lower returns. Listed on NEPSE and tradeable. Government bonds offer the lowest risk; corporate debentures offer slightly higher yields.
#40
Remittance
๐ณ๐ต เคฐेเคฎिเค्เคฏाเคจ्เคธ / เคตिเคช्เคฐेเคทเคฃ
Money sent by Nepali workers abroad to Nepal. Represents over 25% of Nepal's GDP. Massive driver of bank deposit growth, consumer spending, and NEPSE market liquidity — especially in the banking sub-index. Strong remittance seasons (Dashain, Tihar) historically correlate with increased NEPSE trading volumes.
#41
PAN (Permanent Account Number)
๐ณ๐ต เคธ्เคฅाเคฏी เคฒेเคा เคจเคฎ्เคฌเคฐ
Unique 9-digit IRD-issued tax ID. Mandatory for all NEPSE investors, DEMAT holders, and anyone with Nepal-source income. Required for DEMAT opening, capital gains filing, and profit repatriation. Apply at the nearest IRD office or online at ird.gov.np. NRNs can apply via Power of Attorney.
#42
TDS (Tax Deducted at Source)
๐ณ๐ต เคฎूเคฒเคธ्เคฅाเคจเคฎा เคเคฐ เคเคाเคจ
Tax auto-deducted before payment reaches you. In Nepal's capital market: 5% on dividends (deducted by company); 10%/7.5% CGT (deducted by broker at share sale). This makes tax compliance largely automatic for most NEPSE investors — no separate filing needed for these amounts.
#43
CDSC
๐ณ๐ต เคेเคจ्เคฆ्เคฐीเคฏ เคจिเค्เคทेเคช เคคเคฅा เคธเคฎाเคถोเคงเคจ เคฒिเคฎिเคेเคก
Central Depository System and Clearing Limited — maintains all DEMAT accounts and settles NEPSE share trades (T+2 settlement). Operates MeroShare and C-ASBA. When you buy shares, CDSC ensures delivery of shares to your BOID; when you sell, CDSC removes shares from your account within 2 business days.
#44
Fiscal Year (FY)
๐ณ๐ต เคเคฐ्เคฅिเค เคตเคฐ्เคท
Nepal's financial year: 1st Shrawan to 31st Ashadh (mid-July to mid-July) per Bikram Sambat. FY 2081/82 = July 2024 to July 2025. All listed companies publish quarterly financials on this schedule. Understanding this calendar is essential for tracking dividend cycles and annual report releases.
#45
Repatriation
๐ณ๐ต เคชुเคจःเคธ्เคตเคฆेเคถ เคช्เคฐेเคทเคฃ
Transferring profits, dividends, or capital from Nepal to a foreign country. Guaranteed under FITTA 2019 for NRNs. Budget 2083/84 removed mandatory prior-NRB-approval — replaced with notification-only. Taxes must be fully settled (Tax Clearance Certificate for large amounts) before initiating transfer via NRFC account.
#46
WACC (Weighted Average Cost)
๐ณ๐ต เคญाเคฐिเคค เคเคธเคค เคฒाเคเคค เคฎूเคฒ्เคฏ
Your average acquisition price across all purchase transactions for a stock. CDSC calculates and displays it on MeroShare. Capital gain = Sale Price − WACC. If you bought NABIL at NPR 1,200 and NPR 800 in equal quantities, your WACC is NPR 1,000 — the baseline for tax calculations.
#47
AGM (Annual General Meeting)
๐ณ๐ต เคตाเคฐ्เคทिเค เคธाเคงाเคฐเคฃ เคธเคญा
Yearly shareholder meeting where dividends and bonus shares are officially declared, directors elected, and annual financials approved. AGM dates and agendas are published on NEPSE and SEBON websites. NEPSE investors monitor AGM announcements closely as they drive short-term price movements.
#48
C-ASBA
๐ณ๐ต เคธी-เคเคธ्เคฌा
Central Application Supported by Blocked Amount — CDSC's IPO application system. Your application amount is blocked (not debited) in your bank account. No allotment = full unblock. Allotted = only allotted amount debited. Requires a C-ASBA-enabled bank linked to MeroShare. Eliminates risk of funds being locked without return.
#49
Book Closure Date
๐ณ๐ต เคिเคคाเคฌ เคฌเคจ्เคฆीเคो เคฎिเคคि
Deadline to hold shares to qualify for a dividend, bonus share, or right share. Must own shares at least T+2 days before the book closure date due to settlement delay. Savvy investors track book closure dates on ShareSansar's dividend calendar to time entries and exits efficiently.
#50
Paid-up Capital
๐ณ๐ต เคुเค्เคคा เคชूँเคी
Total funds received from shareholders for shares issued to date. NRB mandates minimum NPR 8 billion paid-up capital for commercial banks. High paid-up capital with proportionally low EPS may signal capital inefficiency — a red flag for return-focused investors.
#51
Liquidity
๐ณ๐ต เคคเคฐเคฒเคคा
How quickly and easily an asset can be converted to cash without significantly affecting its price. Cash is most liquid; real estate is illiquid. On NEPSE, banking stocks are highly liquid (thousands of shares traded daily); small microfinance stocks may be illiquid — hard to exit quickly at a fair price.
#52
Volatility
๐ณ๐ต เคเค्เคเคฒเคคा / เคเคคाเคฐเคเคขाเคต
The degree of price fluctuation in a security or market over time. High volatility = large, unpredictable price swings (higher risk, higher potential reward). NEPSE has historically been a highly volatile market — the index swung from 1,100 to 3,198 and back in under 3 years. Volatility is not inherently bad if you have a long time horizon.
#53
Diversification
๐ณ๐ต เคตिเคตिเคงीเคเคฐเคฃ
Spreading investments across multiple sectors, asset types, or geographies to reduce risk. A portfolio holding only banking stocks is highly concentrated — NRB policy changes can hurt all at once. Including hydropower, insurance, and manufacturing alongside banking stocks provides true diversification on NEPSE.
#54
Fundamental Analysis
๐ณ๐ต เคฎौเคฒिเค เคตिเคถ्เคฒेเคทเคฃ
Evaluating a company's intrinsic value by studying its financial statements, management quality, industry position, and economic environment. Uses metrics like EPS, P/E, ROE, Book Value, NPL, and CAR. Contrasts with technical analysis (price charts). Warren Buffett's approach; advocated for long-term NEPSE investing.
#55
Technical Analysis
๐ณ๐ต เคช्เคฐाเคตिเคงिเค เคตिเคถ्เคฒेเคทเคฃ
Predicting future price movements by analyzing historical price charts, trading volumes, and market patterns — support/resistance levels, moving averages, RSI, MACD. Used by active NEPSE traders for short-term entry/exit timing. Platforms like Merolagani and ShareSansar provide basic charting tools for Nepali investors.
#56
Support & Resistance
๐ณ๐ต เคธเคฎเคฐ्เคฅเคจ เคฐ เคช्เคฐเคคिเคฐोเคง เคธ्เคคเคฐ
Support is a price floor where buying interest is strong enough to prevent further decline. Resistance is a price ceiling where selling pressure prevents further rise. NEPSE's index has repeatedly tested the 2,700 support zone since 2022. Breaking through resistance often triggers a new bull phase.
#57
Moving Average (MA)
๐ณ๐ต เคเคฒाเคฏเคฎाเคจ เคเคธเคค
Average price of a security over a specific period (e.g., 50-day MA, 200-day MA). Smooths out short-term noise to reveal the underlying trend. When a stock's price crosses above its 200-day MA, it is often considered a bullish signal. Used widely by active NEPSE traders for entry/exit decisions.
#58
RSI (Relative Strength Index)
๐ณ๐ต เคธाเคชेเค्เคท เคถเค्เคคि เคธूเคเคाเค्เค
A momentum indicator (0–100 scale) measuring speed and magnitude of recent price changes. RSI above 70 = overbought (potential price decline); RSI below 30 = oversold (potential recovery). Used by technical traders on NEPSE to time buy/sell decisions, especially during market extremes.
#59
Dividend Yield
๐ณ๐ต เคฒाเคญांเคถ เคช्เคฐเคคिเคซเคฒ
Annual Dividend ÷ Current Share Price × 100. Measures income return from dividends alone. A stock paying NPR 20 dividend and trading at NPR 400 has a 5% dividend yield. Nepali banks and hydropower companies distributing consistent dividends are attractive to income-focused investors seeking regular cash flow.
#60
P/B Ratio (Price-to-Book)
๐ณ๐ต เคฎूเคฒ्เคฏ-เคชुเคธ्เคคเค เค
เคจुเคชाเคค
Market Price ÷ Book Value per Share. A P/B below 1.0 means the stock trades below its net asset value — potentially undervalued. For Nepali banking stocks, P/B is a critical metric since bank assets (loans, investments) are quantifiable. P/B above 3× may indicate overvaluation relative to fundamentals.
#61
Market Order vs Limit Order
๐ณ๐ต เคฌเคाเคฐ เคเคฆेเคถ / เคธीเคฎा เคเคฆेเคถ
Market Order: Buy/sell immediately at the current market price — fast execution but price may differ from expectation. Limit Order: Buy/sell only at a specified price or better — more control but may not execute if the price never reaches your limit. On TMS, most active NEPSE traders prefer limit orders to control entry/exit prices.
#62
Circuit Breaker
๐ณ๐ต เคธเคฐ्เคिเค เคฌ्เคฐेเคเคฐ
NEPSE's automatic trading halt mechanism triggered when a stock's price moves beyond set limits in a single day. Individual stocks have a ±10% daily circuit limit; the overall NEPSE index has its own circuit breaker at extreme movements. Protects against panic-driven extreme price crashes or manipulated spikes.
#63
Sector Rotation
๐ณ๐ต เค्เคทेเคค्เคฐ เคชเคฐिเคตเคฐ्เคคเคจ เคฐเคฃเคจीเคคि
Shifting investment from one economic sector to another based on market cycles. When interest rates are high, banking stocks may underperform while hydropower (stable cash flows) outperforms. Active NEPSE investors rotate between banking, hydropower, insurance, and microfinance based on economic conditions and policy signals from NRB.
#64
Dilution
๐ณ๐ต เคธेเคฏเคฐ เคชाเคคเคฒाเคชเคจ
Reduction in existing shareholders' ownership percentage when a company issues new shares (IPO, FPO, right shares). If a company has 1 million shares and issues 500,000 new ones, existing shareholders now own proportionally less. Dilution reduces EPS unless the new capital generates proportionally higher profits.
#65
Secondary Market
๐ณ๐ต เคฆोเคธ्เคฐो เคฌเคाเคฐ
Where already-issued shares are bought and sold between investors — NEPSE is Nepal's secondary market. The company itself does not receive money from secondary market transactions; only the buying and selling investors exchange funds. Most daily NEPSE trading is secondary market activity via brokers' TMS platforms.
#66
Primary Market
๐ณ๐ต เคช्เคฐाเคฅเคฎिเค เคฌเคाเคฐ
Where companies sell newly issued shares directly to investors for the first time — IPOs, FPOs, right shares, and debenture issues. The company directly receives the investment proceeds. In Nepal, all primary market applications are processed through MeroShare's C-ASBA system.
#67
Portfolio Rebalancing
๐ณ๐ต เคชोเคฐ्เคเคซोเคฒिเคฏो เคชुเคจःเคธเคจ्เคคुเคฒเคจ
Periodically adjusting your portfolio back to your target allocation after market movements shift the proportions. If banking stocks surge and now represent 80% of your portfolio when your target is 50%, you sell some banking shares and buy hydropower/insurance to rebalance — locking in gains and maintaining disciplined risk management.
#68
Rupee-Cost Averaging
๐ณ๐ต เคฐुเคชैเคฏाँ เคฒाเคเคค เคเคธเคค
Investing a fixed NPR amount regularly regardless of market price. When prices are low, you buy more units/shares; when high, fewer. Over time, this reduces your average cost below the market's average price. The mathematical engine behind SIP (Systematic Investment Plan) — ideal for volatile markets like NEPSE.
#69
Compounding
๐ณ๐ต เคเค्เคฐเคตृเคฆ्เคงि / เคเค्เคฐเคฌ्เคฏाเค
Earning returns on your returns — interest on interest, or dividends reinvested to generate more dividends. Einstein reportedly called it "the eighth wonder of the world." A NPR 100,000 investment growing at 12% per year becomes NPR 964,629 in 20 years with compounding. The longer the horizon, the more dramatic the effect.
#70
AMC (Asset Management Company)
๐ณ๐ต เคธเคฎ्เคชเคค्เคคि เคต्เคฏเคตเคธ्เคฅाเคชเคจ เคเคฎ्เคชเคจी
A SEBON-licensed company that manages mutual fund investments on behalf of unit holders. Major Nepali AMCs: Siddhartha Capital, NIMB Ace Capital, NIC Asia Capital, Nabil Investment Banking, NMB Capital, Global IME Capital. Their investment decisions determine fund performance and NAV movements.
#71
Open-Ended vs Closed-Ended Fund
๐ณ๐ต เคुเคฒा / เคฌเคจ्เคฆ เคฎ्เคฏुเคुเค
เคฒ เคซเคจ्เคก
Open-ended: Units bought/redeemed directly from the AMC at daily NAV — highly liquid, no secondary market needed. Closed-ended: Fixed units issued at launch, then listed and traded on NEPSE like regular shares — price may differ from NAV. Most Nepali mutual funds are closed-ended, but open-ended SIP schemes are growing.
#72
Expense Ratio / Management Fee
๐ณ๐ต เคต्เคฏเคตเคธ्เคฅाเคชเคจ เคถुเคฒ्เค
Annual cost charged by an AMC to manage your mutual fund — expressed as a percentage of AUM. SEBON caps management fees for Nepali mutual funds (typically 1.5–2.5% per year). Lower expense ratios mean more of the fund's returns go to investors rather than the manager. Always check before investing.
#73
AUM (Assets Under Management)
๐ณ๐ต เคต्เคฏเคตเคธ्เคฅाเคชเคจ เค
เคจ्เคคเคฐ्เคเคค เคธเคฎ्เคชเคค्เคคि
Total market value of all investments managed by an AMC or individual fund. Nepal's mutual fund industry AUM surpassed NPR 61 billion by mid-2026. Larger AUM generally signals investor confidence and may offer economies of scale, though very large funds can struggle to deploy capital efficiently in Nepal's smaller market.
#74
Sharpe Ratio
๐ณ๐ต เคोเคिเคฎ-เคธเคฎाเคฏोเคिเคค เคช्เคฐเคคिเคซเคฒ
Measures excess return earned per unit of risk: (Portfolio Return − Risk-Free Rate) ÷ Standard Deviation. A higher Sharpe Ratio means better risk-adjusted performance. Used to compare mutual funds: a fund returning 18% with high volatility may be inferior to one returning 14% with low volatility.
#75
Beta
๐ณ๐ต เคฌिเคा / เคฌเคाเคฐ เคธंเคตेเคฆเคจเคถीเคฒเคคा
Measures a stock's price sensitivity relative to the overall market. Beta 1.0 = moves with market; Beta >1 = more volatile than market (amplified gains/losses); Beta <1 = less volatile. Hydropower stocks tend to have lower beta than speculative microfinance stocks on NEPSE.
#76
Ticker Symbol
๐ณ๐ต เคिเคเคฐ เคช्เคฐเคคीเค / เคธंเคेเคค
Short unique code identifying a listed company on NEPSE. Examples: NABIL (Nabil Bank), NICA (NIC Asia Bank), HBL (Himalayan Bank), UPPER (Upper Tamakoshi). Used on TMS, MeroShare, ShareSansar, and Merolagani. Always use the exact ticker to avoid confusion between similarly named companies.
#77
Trading Volume
๐ณ๐ต เคाเคฐोเคฌाเคฐ เคชเคฐिเคฎाเคฃ
Total number of shares (Kitta) traded in a given period. High volume = strong market interest and liquidity. Low volume with rising price may signal a weak, unsustainable rally. NEPSE publishes daily total turnover and volume data. Spikes in volume often precede or accompany significant price moves.
#78
Market Sentiment
๐ณ๐ต เคฌเคाเคฐ เคฎเคจोเคฆเคถा / เคญाเคตเคจा
The overall attitude and emotion of investors toward the market. Positive sentiment drives buying (bull market); negative drives selling (bear market). Nepal's NEPSE is heavily sentiment-driven — political news, NRB policy changes, and even seasonal festivals (Dashain/Tihar) visibly influence daily market mood and trading volumes.
#79
Pump and Dump (Market Manipulation)
๐ณ๐ต เคฌเคाเคฐ เคนेเคฐเคซेเคฐ
Illegal scheme: artificially inflate (pump) a stock's price through misleading promotions or coordinated buying, then sell (dump) shares at the inflated price — leaving other investors with losses. Common in low-volume microfinance stocks. SEBON monitors for market manipulation. Beware of "hot tips" from Facebook groups and WhatsApp chats promising guaranteed returns.
#80
Holding Period
๐ณ๐ต เคงाเคฐเคฃ เค
เคตเคงि
The length of time an investment is held before selling. In Nepal, holding period determines the capital gains tax rate: ≤1 year = 10% CGT; >1 year = 7.5% CGT. Also affects eligibility for dividends (must hold on book closure date) and bonus shares. Long-term holders benefit from both lower tax rates and compounding returns.
#81
GDP (Gross Domestic Product)
๐ณ๐ต เคुเคฒ เคाเคฐ्เคนเคธ्เคฅ เคเคค्เคชाเคฆเคจ (เคीเคกीเคชी)
The total monetary value of all goods and services produced within Nepal in a year. Strong GDP growth signals a healthy economy, typically boosting investor confidence and NEPSE performance. Nepal's GDP growth was revised down from 5% to 2.1% by the World Bank in 2025 following the September political disruptions — directly weighing on market sentiment.
#82
Monetary Policy
๐ณ๐ต เคฎौเคฆ्เคฐिเค เคจीเคคि
NRB's framework for managing money supply, interest rates, and credit growth to achieve price stability and economic growth. NRB releases monetary policy twice yearly (mid-Shrawan and mid-Poush). Expansionary policy (low rates) boosts lending and stock prices; tight policy (high rates) slows credit and can depress NEPSE.
#83
Fiscal Policy
๐ณ๐ต เคฐाเคเคोเคทीเคฏ เคจीเคคि
Government's use of taxation and spending to influence the economy. Nepal's annual Budget (presented in Jeth/Ashadh) is a major fiscal policy document that directly affects investors — changing capital gains tax rates, introducing new investment incentives, or allocating infrastructure spending that benefits listed companies.
#84
Exchange Rate
๐ณ๐ต เคตिเคจिเคฎเคฏ เคฆเคฐ
The value of the Nepali Rupee (NPR) relative to foreign currencies. NPR is pegged to the Indian Rupee (INR) at approximately NPR 1.6 = INR 1. NRB publishes daily exchange rates for USD, EUR, GBP, and other currencies. For NRN investors, exchange rate movements affect the real value of repatriated investment returns.
#85
FDI (Foreign Direct Investment)
๐ณ๐ต เคช्เคฐเคค्เคฏเค्เคท เคตिเคฆेเคถी เคฒเคाเคจी
Investment by foreign entities in Nepali businesses, typically involving ownership, management, or technology transfer. Governed by FITTA 2019. Budget 2083/84 expanded automatic-route FDI to 102 sectors and removed the NPR 500 million ceiling — a landmark liberalization. FDI inflows support economic growth and can boost NEPSE indirectly through business expansion.
#86
Balance of Payments
๐ณ๐ต เคญुเค्เคคाเคจी เคธเคจ्เคคुเคฒเคจ
A record of all economic transactions between Nepal and the rest of the world. Nepal historically runs a trade deficit (imports far exceed exports) offset by remittances in the current account. A deteriorating balance of payments can put pressure on NRB's foreign exchange reserves, affecting the NPR's stability and investor confidence.
#87
Foreign Exchange (Forex) Reserve
๐ณ๐ต เคฌैเคฆेเคถिเค เคฎुเคฆ्เคฐा เคธเค्เคिเคคि
NRB's holdings of foreign currencies (USD, gold, SDRs) used to support the NPR's peg to INR and fund imports. Nepal typically maintains reserves covering 7–9 months of imports. A sharp decline in forex reserves signals economic stress — this was a key factor in Nepal's 2022–23 economic slowdown that hurt NEPSE significantly.
#88
Policy Interest Rate
๐ณ๐ต เคจीเคคिเคเคค เคฌ्เคฏाเค เคฆเคฐ
NRB's benchmark lending rate that influences all bank deposit and lending rates. When NRB cuts rates, banks can lend cheaper leads to more business activity leads to higher profits leads to rising bank stocks on NEPSE. When NRB raises rates, borrowing costs rise leads to profit margins shrink leads to bank stock prices typically fall.
#89
CPI (Consumer Price Index)
๐ณ๐ต เคเคชเคญोเค्เคคा เคฎूเคฒ्เคฏ เคธूเคเคाเค्เค
Measures the average price change of a basket of commonly purchased goods and services — the primary indicator of inflation in Nepal. NRB's monetary policy responds directly to CPI trends: rising CPI leads to tighter money supply leads to higher interest rates leads to potential NEPSE headwind. Published monthly by Nepal's Central Bureau of Statistics (CBS).
#90
Recession
๐ณ๐ต เคเคฐ्เคฅिเค เคฎเคจ्เคฆी
A significant, widespread, and prolonged economic decline — technically two consecutive quarters of negative GDP growth. During recession, corporate earnings fall, dividend payments are reduced, and NEPSE typically underperforms. Nepal's near-recessionary period of 2022–23 (driven by tightened credit, import restrictions, and high NPLs) caused sustained NEPSE weakness.
#91
Credit Rating
๐ณ๐ต เคธाเค เคฎूเคฒ्เคฏाเค्เคเคจ
An independent assessment of a borrower's creditworthiness — their ability to repay debt. In Nepal, SEBON mandates credit ratings for debenture issuances. Agencies like ICRA Nepal and CARE Ratings Nepal assign ratings (AAA to D). Higher-rated debentures are safer but offer lower interest; lower-rated offer higher yields with more risk.
#92
DTAA (Double Taxation Avoidance Agreement)
๐ณ๐ต เคฆोเคนोเคฐो เคเคฐ เคुเค เคธเคฎ्เคौเคคा
A bilateral tax treaty between Nepal and another country preventing the same income from being taxed twice. Nepal has DTAAs with India, Norway, China, Austria, Mauritius, and others. NRN investors from DTAA countries can claim credit for taxes paid in Nepal against their home country tax liability — reducing overall tax burden.
#93
FITTA (Foreign Investment & Technology Transfer Act)
๐ณ๐ต เคตिเคฆेเคถी เคฒเคाเคจी เคเคจ เฅจเฅฆเฅงเฅฏ
Nepal's primary law (enacted 2019) governing all foreign investment and technology transfer. Guarantees NRNs' rights to repatriate profits, dividends, and capital. Defines eligible sectors, approval processes, and investor protections. Budget 2083/84 committed to amending FITTA to further simplify NRN entry into Nepal's secondary securities market.
#94
NRN (Non-Resident Nepali)
๐ณ๐ต เค
เคจिเคตाเคธी เคจेเคชाเคฒी
Defined under the Non-Resident Nepali Act 2064: either a Nepali citizen living abroad 2+ years, or a foreign citizen of Nepali origin. NRNs have rights to invest in Nepal, hold NRN ID cards, open NRFC bank accounts, and — increasingly — participate in Nepal's capital markets. Excludes those from SAARC countries with foreign citizenship.
#95
Hydropower Sector
๐ณ๐ต เคเคฒเคตिเคฆ्เคฏुเคค เค्เคทेเคค्เคฐ
One of NEPSE's most prominent sectors — companies generating electricity from Nepal's abundant rivers. Key listed companies include Upper Tamakoshi (UPPER), NHPC, CHDC, BARUN. Hydropower stocks attract long-term investors due to stable, government-backed electricity tariffs and growing domestic energy demand. Sensitive to monsoon conditions and power purchase agreement terms.
#96
Microfinance Institution (MFI)
๐ณ๐ต เคฒเคुเคตिเคค्เคค เคธंเคธ्เคฅा
Financial institutions providing small loans and savings services to low-income borrowers — particularly rural women in Nepal. Heavily represented on NEPSE with high P/E ratios historically. However, NRB's crackdown on MFI interest rates and rising NPLs in rural areas made many MFI stocks highly volatile post-2021. Due diligence is essential before investing in this sub-sector.
#97
Insurance Sector
๐ณ๐ต เคฌिเคฎा เค्เคทेเคค्เคฐ
Life and non-life insurance companies listed on NEPSE, regulated by the Insurance Regulatory Authority (IRA). A growing sector as Nepal's middle class expands. Insurance stocks offer moderate growth and regular dividends but less liquidity than banking stocks. Key companies: Nepal Life Insurance, National Life Insurance, Nepal Insurance Company.
#98
Government Securities (T-Bills)
๐ณ๐ต เคธเคฐเคाเคฐी เคเคฃเคชเคค्เคฐ / เค्เคฐेเคเคฐी เคฌिเคฒ
Short-term (Treasury Bills) and long-term (Development Bonds) debt instruments issued by Nepal's government via NRB to finance public expenditure. The risk-free rate benchmark in Nepal. Banks, insurance companies, and mutual funds hold large amounts of government securities. NRN investors can also invest through licensed intermediaries.
#99
Money Market
๐ณ๐ต เคฎुเคฆ्เคฐा เคฌเคाเคฐ
The market for short-term (less than one year) borrowing and lending — Treasury Bills, interbank lending, and call money. NRB operates the money market through Open Market Operations (OMO). Tight money market conditions (high interbank rates) signal banking system stress and can negatively affect bank stock dividends and NEPSE performance.
#100
Capital Market
๐ณ๐ต เคชूँเคी เคฌเคाเคฐ
The market for long-term financial instruments — shares, bonds, and debentures. Nepal's capital market consists of the primary market (new issues via IPO/FPO) and secondary market (trading via NEPSE). Regulated by SEBON and supported by CDSC's depository infrastructure. Total AUM crossing NPR 61 billion marks a maturing market.
#101
Quantitative Easing (QE)
๐ณ๐ต เคฎौเคฆ्เคฐिเค เคช्เคฐเคธाเคฐ เคจीเคคि
A central bank policy of buying financial assets (government bonds) to inject money into the economy and lower long-term interest rates when traditional rate cuts are insufficient. While NRB doesn't formally use QE, its Open Market Operations (OMO) — injecting or absorbing liquidity — serve similar functions and directly affect Nepali bank lending capacity.
#102
Stagflation
๐ณ๐ต เคธ्เคฅिเคฐเคธ्เคซीเคคि
The damaging combination of stagnant economic growth + high inflation + high unemployment — the worst of both worlds for investors. Central banks face a dilemma: raising rates fights inflation but worsens the slowdown. Nepal's 2022–23 period showed stagflationary characteristics, with high food inflation alongside slowing GDP — a challenging environment for NEPSE investors.
#103
Current Account Deficit
๐ณ๐ต เคाเคฒु เคाเคคा เคाเคा
When a country spends more on imports, debt payments, and foreign transfers than it earns from exports, services, and remittances combined. Nepal's current account is kept from deep deficit largely by massive remittance inflows. A widening current account deficit pressures the NPR exchange rate and NRB's forex reserves.
#104
Sovereign / Political Risk
๐ณ๐ต เคธाเคฐ्เคตเคญौเคฎ เคोเคिเคฎ
The risk that political instability, government policy changes, or civil unrest disrupts business and investments. Nepal's political volatility — frequent government changes, the 2025 protests that caused NPR 23 billion in insured losses — is a key systematic risk for all NEPSE investors. Diversification across sectors and long time horizons help mitigate this risk.
#105
GDR (Global Depositary Receipt)
๐ณ๐ต เคตैเคถ्เคตिเค เคจिเค्เคทेเคช เคช्เคฐเคฎाเคฃเคชเคค्เคฐ
A certificate representing shares of a foreign company traded on international stock exchanges. Budget 2083/84 committed to allowing NEPSE-listed companies to issue GDRs on international markets — giving foreign investors access to Nepali equities without directly holding NEPSE shares. A landmark step toward Nepal's capital market internationalization.
#106
Offshore Bond
๐ณ๐ต เค
เคซเคถोเคฐ เคฌเคจ्เคก
Debt instruments issued by a country's government or companies in international markets, denominated in foreign currency. Budget 2083/84 announced introduction of Nepali currency offshore bonds in international markets — allowing foreign investors and NRNs to hold NPR-denominated bonds without a Nepal DEMAT account. A new asset class being developed.
#107
Purchasing Power Parity (PPP)
๐ณ๐ต เค्เคฐเคฏเคถเค्เคคि เคธเคฎเคคा
A theory suggesting exchange rates should adjust so that identical goods cost the same in different countries. Nepal's PPP-adjusted GDP per capita (around USD 4,500) is significantly higher than the nominal figure, reflecting lower local prices. Investors use PPP comparisons to assess Nepal's real economic position relative to its neighbors for investment thesis development.
#108
Systemic Risk
๐ณ๐ต เคช्เคฐเคฃाเคฒीเคเคค เคोเคिเคฎ
Risk that affects the entire financial system — not just one company or sector. A banking crisis, currency collapse, or major political disruption can trigger systemic risk, causing all asset prices to fall simultaneously. Nepal's NEPSE is particularly vulnerable to systemic risk because banking stocks dominate over 40% of market capitalization — a banking crisis would drag down the whole index.
#109
Intraday Trading
๐ณ๐ต เคเคจ्เค्เคฐाเคกे เคाเคฐोเคฌाเคฐ
Buying and selling shares within the same trading day to profit from short-term price movements — without holding overnight. Budget 2083/84 announced NEPSE will gradually roll out intraday trading (not yet live as of mid-2026). Currently, all NEPSE trades settle T+2, making true same-day round trips technically non-standard. A significant incoming market development.
#110
Short Selling
๐ณ๐ต เคธเคฐ्เค เคธेเคฒिเค
Borrowing shares and selling them, hoping to buy them back at a lower price — profiting from price declines. Currently not available on NEPSE but announced in Budget 2083/84 as a future instrument to be gradually introduced alongside derivatives. Short selling adds liquidity and price discovery but also allows amplified losses if prices rise against the position.
#111
Derivatives
๐ณ๐ต เคต्เคฏुเคค्เคชเคจ्เคจ เคตिเคค्เคคीเคฏ เคเคชเคเคฐเคฃ
Financial contracts whose value is derived from an underlying asset (shares, indices, commodities). Includes futures and options. Budget 2083/84 announced NEPSE will introduce derivatives — a major market development that will allow sophisticated hedging and speculation strategies currently unavailable to Nepali investors. Expected to launch in phases after regulatory infrastructure is established.
#112
One-Stop Service Center
๐ณ๐ต เคเคเคฒ เคตिเคจ्เคฆु เคธेเคตा เคेเคจ्เคฆ्เคฐ
Nepal's integrated investment facilitation center (under the Investment Board of Nepal) where foreign and NRN investors can complete all regulatory approvals — company registration, environmental clearance, industry permits — in a single location. Designed to cut bureaucratic delays. Increasingly relevant for NRNs making direct business investments beyond stock market participation.
#113
Crowdfunding / Crowd Investing
๐ณ๐ต เคธाเคฎूเคนिเค เคฒเคाเคจी
Raising small amounts of capital from a large number of people — typically online. Nepal's capital market regulatory framework is being updated to accommodate equity crowdfunding for startups and SMEs as an alternative to NEPSE listing. Not yet formally regulated in Nepal but an emerging concept gaining attention among tech entrepreneurs and younger investors.
#114
Fintech / Digital Payment
๐ณ๐ต เคกिเคिเคเคฒ เคญुเค्เคคाเคจी / เคซिเคจเคेเค
Financial technology companies providing digital banking, payment, and investment services. Key Nepali fintechs: eSewa, Khalti, IME Pay. Budget 2083/84 announced establishment of a Fintech Marketplace under NRB supervision. Fintech growth is expanding access to capital markets for rural and young investors who previously lacked bank-branch access.
#115
Risk-Free Rate
๐ณ๐ต เคोเคिเคฎ-เคฎुเค्เคค เคฆเคฐ
The theoretical return on an investment with zero risk — in Nepal, typically the yield on government Treasury Bills or Development Bonds. All other investments are evaluated against this benchmark: an equity investment should offer significantly higher expected returns to justify the additional risk above the risk-free rate. Currently around 8–11% in Nepal.
#116
Balance Sheet
๐ณ๐ต เคฌाเคธเคฒाเคค (เคเคฐ्เคฅिเค เคตिเคตเคฐเคฃ)
A snapshot of a company's financial position at a specific date: Assets = Liabilities + Shareholders' Equity. Every NEPSE-listed company publishes quarterly balance sheets on SEBON. Key items: total loans (for banks), paid-up capital, retained earnings, and reserve fund. Learning to read a balance sheet is the single most valuable financial skill for a serious investor.
#117
Income Statement (P&L)
๐ณ๐ต เคเคฏ เคตिเคตเคฐเคฃ / เคจाเคซाเคจोเค्เคธाเคจ เคाเคคा
Shows a company's revenues, expenses, and profit/loss over a reporting period. Key line items: Net Interest Income (for banks), Operating Profit, and Net Profit (from which EPS and dividend capacity are derived). Published quarterly. Trend analysis of quarterly income statements reveals whether a company is growing or deteriorating.
#118
Cash Flow Statement
๐ณ๐ต เคจเคเคฆ เคช्เคฐเคตाเคน เคตिเคตเคฐเคฃ
Tracks actual cash movement in and out of a company across three activities: Operating (core business), Investing (buying/selling assets), and Financing (loans, dividends, share issuance). A company can show accounting profit but still have negative cash flow — a key red flag that pure income statement analysis misses.
#119
Retained Earnings / Reserve
๐ณ๐ต เคธเค्เคिเคค เคจाเคซा / เคธเค्เคिเคคि เคोเคท
Cumulative profits kept within the company rather than paid out as dividends — used for reinvestment or future bonus share issuance. Nepal's listed companies must maintain a General Reserve Fund (at least 20% of net profit annually for commercial banks, per NRB directive). High retained earnings signal financial strength and capacity for future bonus shares.
#120
NIM (Net Interest Margin)
๐ณ๐ต เคुเคฆ เคฌ्เคฏाเค เค
เคจ्เคคเคฐ
A bank's core profitability metric: (Interest Earned − Interest Paid) ÷ Average Earning Assets. A higher NIM means the bank earns significantly more from lending than it pays on deposits. Nepal's commercial banks typically maintain NIMs of 3–5%. Compressed NIMs (when deposit rates rise faster than lending rates) reduce distributable profit and bank stock appeal.
#121
Distributable Profit
๐ณ๐ต เคตिเคคเคฐเคฃเคฏोเค्เคฏ เคฎुเคจाเคซा
The portion of a company's net profit legally available for dividend distribution after statutory deductions (general reserve, regulatory capital requirements, tax provisions). NRB restricts banks with capital shortfalls from distributing dividends — making distributable profit analysis essential for predicting upcoming Nepali bank dividends before the AGM season.
#122
Rights Entitlement (RE) Trading
๐ณ๐ต เคนเคเคช्เคฐเคฆ เค
เคงिเคाเคฐ เคाเคฐोเคฌाเคฐ
In Nepal, the right to subscribe to right shares can itself be traded on NEPSE before the subscription deadline. If you receive rights entitlements but don't want to invest more, you can sell them to another investor. This creates a secondary market for rights, visible as "RE" ticker codes (e.g., NABILR). A unique feature of Nepal's capital market.
#123
Share Swap Ratio
๐ณ๐ต เคธेเคฏเคฐ เคธाเคाเคธाเค เค
เคจुเคชाเคค
In a merger, the ratio determining how many shares of the new/surviving company existing shareholders of each merging entity receive. Example: if Bank A and Bank B merge with a 1:0.8 swap ratio, each Bank B shareholder receives 0.8 shares of the merged entity per Bank B share held. Directly affects portfolio value during Nepal's ongoing banking consolidation.
#124
Prospectus
๐ณ๐ต เคตिเคตเคฐเคฃเคชเคค्เคฐ / เคช्เคฐोเคธ्เคชेเค्เคเคธ
The official legal document a company must publish before an IPO — containing financial history, business model, risk factors, use of proceeds, and management details. SEBON must approve the prospectus before any public issue in Nepal. Reading the prospectus is essential before applying for any IPO. Available on SEBON's website for every listed company.
#125
Underwriting
๐ณ๐ต เคนाเคฎीเคเคฆाเคฐी / เค
เคฃ्เคกเคฐเคฐाเคเคिเค
A guarantee by a licensed merchant bank (underwriter) to purchase any unsold shares if an IPO is undersubscribed. In Nepal, SEBON requires companies to appoint a SEBON-licensed underwriter for most public issues. If the public doesn't subscribe all shares, the underwriter buys the remainder — protecting the company from a failed capital raise.
#126
Merchant Banker (Issue Manager)
๐ณ๐ต เคฎเคฐ्เคेเคจ्เค เคฌैंเคเคฐ / เคจिเคฐ्เคเคฎเคจ เคช्เคฐเคฌเคจ्เคงเค
A SEBON-licensed financial institution that manages the complete process of a public issue — preparing the prospectus, coordinating with SEBON, managing applications, and overseeing allotment. Key Nepali merchant bankers: Nabil Investment Banking, NMB Capital, NIBL Capital, Siddhartha Capital, Global IME Capital. Their reputation signals IPO credibility.
#127
Goodwill
๐ณ๐ต เคธเคฆ्เคญाเคตเคจा / เคช्เคฐเคคिเคท्เค ा เคฎूเคฒ्เคฏ
An intangible asset representing the premium paid above a company's book value — accounting for brand reputation, customer relationships, and competitive advantages. In Nepal's banking mergers, goodwill sometimes appears on balance sheets when one bank pays a premium to acquire another. Investors should scrutinize excessive goodwill as it can obscure a company's true asset quality.
#128
Working Capital
๐ณ๐ต เคाเคฐ्เคฏเคถीเคฒ เคชूँเคी
Current Assets − Current Liabilities. Measures a company's short-term operational liquidity — its ability to pay near-term obligations. Positive working capital = healthy operations. Negative working capital = potential cash flow crisis. More relevant for non-financial listed companies (manufacturing, trading) than for banks, which have different liquidity management frameworks.
#129
Debt-to-Equity Ratio
๐ณ๐ต เคเคฃ-เคธ्เคตाเคฎिเคค्เคต เค
เคจुเคชाเคค
Total Debt ÷ Shareholders' Equity. Measures how much a company is financed by debt vs. owner funds. High ratio = high financial leverage (amplifies profits AND losses). In Nepal, hydropower project companies typically carry high debt-to-equity ratios due to project financing requirements — acceptable for regulated, stable-tariff businesses but risky for cyclical ones.
#130
Free Cash Flow (FCF)
๐ณ๐ต เคธ्เคตเคคเคจ्เคค्เคฐ เคจเคเคฆ เคช्เคฐเคตाเคน
Operating Cash Flow − Capital Expenditures. The cash a company generates after maintaining/expanding its asset base. Positive FCF signals a healthy, self-funding business. Companies with strong FCF can pay dividends, reduce debt, and invest in growth without raising new capital. More meaningful than reported profit for evaluating dividend sustainability.
#131
ROA (Return on Assets)
๐ณ๐ต เคธเคฎ्เคชเคค्เคคिเคฎा เคช्เคฐเคคिเคซเคฒ
Net Profit ÷ Total Assets × 100. Measures how efficiently a company uses its total asset base to generate profit. NRB monitors bank ROA closely — Nepali commercial banks typically target ROA of 1.5–2.5%. A falling ROA signals declining efficiency, often due to rising NPLs or compressed interest margins.
#132
Tier 1 & Tier 2 Capital
๐ณ๐ต เคिเคฏเคฐ เฅง เคฐ เคिเคฏเคฐ เฅจ เคชूँเคी
Bank capital classifications under Basel III (adopted by NRB). Tier 1: Core capital — paid-up capital + retained earnings (highest quality). Tier 2: Supplementary capital — subordinated debt, revaluation reserves (less permanent). The CAR (Capital Adequacy Ratio) is calculated using both tiers. NRB requires Nepali banks to maintain 11% CAR including both Tier 1 and 2.
#133
Loan Loss Provision
๐ณ๐ต เคเคฐ्เคा เคจोเค्เคธाเคจ เคต्เคฏเคตเคธ्เคฅा
Amount a bank sets aside as a buffer against expected future loan losses (NPLs). NRB mandates specific provisioning percentages based on loan classification: Pass loans: 1%, Watch loans: 5%, Substandard: 25%, Doubtful: 50%, Loss: 100%. High provisioning expenses reduce net profit, directly affecting EPS, distributable profit, and ultimately dividend capacity.
#134
Net Interest Income (NII)
๐ณ๐ต เคुเคฆ เคฌ्เคฏाเค เคเคฏ
Interest Earned − Interest Paid. The primary revenue line for Nepali commercial banks. NII is driven by the spread between lending rates and deposit rates. When NRB forces banks to lower lending rates without equivalent reduction in deposit rates, NII compresses — the main mechanism through which NRB policy directly reduces bank profitability and share prices.
#135
EBITDA
๐ณ๐ต เคธเค्เคाเคฒเคจ เคจाเคซा / เคเคฌिเคเคกा
Earnings Before Interest, Taxes, Depreciation, and Amortization — a proxy for operating cash generation. More relevant for Nepali non-financial companies (manufacturing, hydropower, hotels) than for banks. Used to compare profitability across companies without distortion from different capital structures, tax rates, or depreciation policies.
#136
Diluted EPS
๐ณ๐ต เคตिเคธเคฐ्เคिเคค เคช्เคฐเคคि เคธेเคฏเคฐ เคเคฏ
EPS calculated assuming all potential shares (from convertible instruments, employee stock options, warrants) are already issued. Diluted EPS is lower than basic EPS and represents a more conservative profitability metric. In Nepal, companies with large pending right share issuances have diluted EPS significantly different from basic EPS — an important distinction for valuation.
#137
Insider Trading
๐ณ๐ต เคญिเคค्เคฐी เคต्เคฏाเคชाเคฐ
Illegal trading in a company's shares by someone with access to non-public material information (e.g., board members knowing about an unannounced dividend before it's public). SEBON investigates and penalizes insider trading in Nepal. Retail investors are disadvantaged when insiders trade on privileged information — a key investor protection challenge in developing markets like Nepal.
#138
Annual Report
๐ณ๐ต เคตाเคฐ्เคทिเค เคช्เคฐเคคिเคตेเคฆเคจ
Comprehensive yearly document published by every NEPSE-listed company after the AGM: includes audited financial statements, chairman's message, director reports, and notes to accounts. Available free from the company's website and SEBON's database. The single most important document for fundamental analysis — every serious investor should read it annually for companies they hold.
#139
External Auditor
๐ณ๐ต เคฌाเคน्เคฏ เคฒेเคाเคชเคฐीเค्เคทเค
An independent certified auditor who verifies that a company's financial statements are accurate and comply with Nepal Accounting Standards (NAS) and NRB guidelines. NEPSE-listed companies must appoint SEBON-approved auditors. A qualified (clean) audit opinion is a baseline requirement; a qualified audit with exceptions is a red flag for investors.
#140
Corporate Governance
๐ณ๐ต เคเคฐ्เคชोเคฐेเค เคธुเคถाเคธเคจ
The system of rules, practices, and processes by which a company is directed and controlled. Good governance = transparent management, independent board directors, timely financial disclosure, and fair treatment of minority shareholders. Nepal's SEBON mandates corporate governance standards for listed companies. Poor governance is a major risk factor in markets like NEPSE where minority shareholder protections are still developing.
#141
Promoter Share
๐ณ๐ต เคช्เคฐเคตเคฐ्เคฆ्เคงเค เคธेเคฏเคฐ
Shares held by the founding/sponsoring shareholders of a company — not freely tradeable on NEPSE and subject to a lock-up period (typically 1 year for promoter shares after listing). In Nepal, promoter shares and public shares are treated differently. High promoter ownership can signal commitment but also concentration risk if the promoter exits after the lock-up period expires.
#142
Share Buyback (Repurchase)
๐ณ๐ต เคธेเคฏเคฐ เคชुเคจः เคเคฐिเคฆ
When a company buys back its own shares from the open market — reducing shares outstanding, which increases EPS and book value per remaining share. Not yet widely practiced on NEPSE but legally permitted under Companies Act 2063 with shareholder and regulatory approval. Buybacks signal that management believes shares are undervalued — a positive signal for remaining shareholders.
#143
Minority Shareholder Rights
๐ณ๐ต เค
เคฒ्เคชเคธंเค्เคฏเค เคธेเคฏเคฐเคงाเคฐी เค
เคงिเคाเคฐ
Legal protections ensuring small shareholders (holding less than 50%) are not unfairly treated by majority/controlling shareholders. In Nepal, the Companies Act 2063 and SEBON's regulations provide some protections: right to attend AGMs, vote on major decisions, receive equal dividends per share, and access financial information. Strengthening these protections is an ongoing focus of Nepal's capital market reform agenda.
#144
Depository Participant (DP)
๐ณ๐ต เคจिเค्เคทेเคช เคธเคฆเคธ्เคฏ / เคกिเคชी
An agent of CDSC licensed to open and maintain DEMAT accounts for investors. Commercial banks, development banks, and merchant banks act as DPs. When you open a DEMAT account at Nabil Bank or Global IME Capital, they are acting as your DP. You must choose one DP as your primary DP in MeroShare. Nepal's major DPs: Nabil Investment, NIC Asia Capital, Siddhartha Capital, NIMB Ace Capital.
#145
Pledged Shares
๐ณ๐ต เคงिเคคो เคฐाเคिเคเคो เคธेเคฏเคฐ
Shares used as collateral (เคงिเคคो) to secure a bank loan — common in Nepal where investors borrow against their NEPSE portfolio. If the investor defaults, the bank can sell the pledged shares. During market downturns, forced selling of pledged shares by banks can trigger cascading price declines — a major amplifier of bear market selling pressure on NEPSE.
#146
Margin Trading
๐ณ๐ต เคฎाเคฐ्เคिเคจ เคाเคฐोเคฌाเคฐ
Borrowing money from a broker to buy more shares than your own capital allows — amplifying both potential gains and losses. Not formally offered by Nepali brokers yet, but investors informally access leverage by pledging shares at banks. High leverage during Nepal's 2019–2021 bull market led to devastating losses when the market corrected — a cautionary lesson on margin risk.
#147
Listing Requirements
๐ณ๐ต เคธूเคीเคเคฐเคฃ เคเคตเคถ्เคฏเคเคคा
The criteria a company must meet to list shares on NEPSE: SEBON registration, prospectus approval, minimum public shareholding (generally 30%), appointment of issue manager and auditor, and compliance with disclosure requirements. Post-listing, companies must submit quarterly financials, hold AGMs within 6 months of fiscal year-end, and notify NEPSE of any price-sensitive information.
#148
Delisting
๐ณ๐ต เคธूเคीเคเคฐเคฃ เคนเคाเคเคจु
Removal of a company's shares from NEPSE — either voluntarily (company decision) or involuntarily (SEBON/NEPSE penalizing regulatory non-compliance). Delisting is a major risk for shareholders, as it eliminates secondary market liquidity. Companies undergoing merger and acquisition are effectively delisted after a merger completes — shareholders receive new merged entity shares instead.
#149
Allotment (เคฌाँเคกเคซाँเค)
๐ณ๐ต เคธेเคฏเคฐ เคตिเคจिเคฏोเคเคจ / เคฌाँเคกเคซाँเค
The process of distributing IPO shares to applicants. In Nepal, if an IPO is oversubscribed, allotment is lottery-based — each qualifying applicant gets one chance regardless of application size. Results are published on MeroShare within 5–7 business days of closing. Checking allotment results on MeroShare is one of the most anticipated activities for Nepal's retail investor community.
#150
Rights Renunciation
๐ณ๐ต เคนเคเคช्เคฐเคฆ เค
เคงिเคाเคฐ เคค्เคฏाเค
When an existing shareholder chooses not to exercise their right share subscription — either allowing rights to lapse (forfeiting them) or selling the Rights Entitlement (RE) on NEPSE to another investor before the deadline. Selling RE allows you to realize some value from rights you don't wish to exercise. Always check whether RE trading is open for the specific rights issue before the subscription deadline closes.
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Investor Education
5 Golden Rules for Every Nepali Investor
Vocabulary is just the beginning — here are the principles that separate successful investors from the rest.
Read Quarterly Reports (เคค्เคฐैเคฎाเคธिเค เคช्เคฐเคคिเคตेเคฆเคจ)
Every NEPSE company publishes quarterly financials. Track EPS trends, NPL movements (for banks), and distributable profit. Available free on SEBON and ShareSansar. Consistent upward EPS is your best signal of a quality holding.
Track Book Closure Dates (เคिเค्เคा เคाเค्เคจे เคฎिเคคि)
Missing a book closure date means missing dividends. Buy shares at least T+2 business days before book closure to qualify. Use ShareSansar's dividend calendar or Merolagani alerts. This single habit has saved many investors from costly mistiming.
Invest Systematically, Not Emotionally
Nepal's bull market peak (3,198 points) attracted millions of new investors — many bought at the top and saw 40–50% losses. A disciplined SIP or regular accumulation strategy beats emotional market-timing every time over a 5–10 year horizon.
Only Use SEBON-Licensed Intermediaries
Never transfer money to individuals or unlicensed "investment advisors." Verify your broker's license at sebon.gov.np before opening any account. All legitimate TMS platforms are officially registered with NEPSE. Fraudulent schemes targeting NEPSE investors have caused significant losses — due diligence costs nothing.
Think Long-Term, Diversify Sectors
Nepal's banking sector dominates NEPSE at 40%+ of market cap. Holding only bank stocks means one NRB directive can hurt your entire portfolio. Spread across banking, hydropower, insurance, and manufacturing. A 7–10 year investment horizon dramatically reduces the impact of short-term market volatility.
Know Your WACC on MeroShare
Your Weighted Average Cost (WACC) shown on MeroShare is the baseline for all capital gains tax calculations. Understanding your WACC helps you know exactly when you are in profit vs. loss on each holding — and make smarter decisions about when to hold vs. sell based on your actual entry price, not market noise.
Nepal's Most Complete Financial Glossary — Bookmark It
Share this guide with every Nepali investor you know. Financial literacy is the foundation of a thriving capital market and a prosperous community.
Open MeroShareDisclaimer: This glossary is for educational purposes only. All definitions reflect Nepal's capital market regulations as of June 2026 (FY 2082/83). Tax rates are per Budget 2083/84 announcements — subject to parliamentary finalization and regulatory drafting. Always verify current rules with SEBON (sebon.gov.np), NRB (nrb.org.np), or a licensed financial advisor before making any investment decision. Nothing in this article constitutes financial, legal, or tax advice.
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