Beginner's Guide
Market Guide · guide 1 of 7 · Basic · about 12 min
Guide 1 of 7 · Start here
Beginner's Guide to the NEPSE market
How the market works, what a share actually is, the accounts you need before your first order, the mistakes that cost new investors the most, and a six-month plan that keeps the stakes small while you learn.
On this page
How the market works
Three institutions, one exchange, and what you are actually buying.
The Nepal Stock Exchange (NEPSE) is the only stock exchange in Nepal. Companies list their shares there; investors buy and sell those shares through licensed brokers on NEPSE's online trading system. A share is a slice of ownership in a company — when you own 100 shares of a bank you own a tiny part of that bank, share in its profits through dividends, and gain or lose as the market's view of the company changes.
NEPSE
Runs the exchange: the trading system, market hours, price bands and the index you hear about in the news.
SEBON
The Securities Board of Nepal — the regulator that licenses brokers and approves IPOs, rights and mutual funds.
CDSC
The central depository. It keeps every shareholder's holdings electronically and runs MeroShare.
Two ways a share pays you
What you need before your first order
Three accounts, four documents, and about a week.
The accounts
- Bank account — money in and out. Dividends and sale proceeds land here.
- Demat account — opened at a depository participant (a bank or broker). Holds your shares. Guide 2 →
- MeroShare — CDSC's portal for IPO applications, holdings and the EDIS transfer when you sell. Guide 3 →
- Broker trading account — the login you place orders with. Guide 4 →
The documents
- Citizenship certificate — original to show, copies to submit.
- PAN — a Permanent Account Number is required to open a trading account and to sell.
- Passport-size photos — two, recent.
- Bank details — a cheque copy or statement showing the account name and number.
Six mistakes that cost beginners the most
Every one of them is avoidable with a rule you set in advance.
Buying on a tip
A stock bought because someone said so has no exit plan. Rule: read the last two quarterly results and the dividend history before any buy — Fundamentals puts them on one page, and Valuation shows what the share is worth against its price.
Following the crowd
Buying after a 30% run because everyone is talking about it, selling in a panic when they stop. Rule: decide the price you will pay before you look at the order book.
One stock, one sector
A single bad result can take a quarter of your capital. Rule: no more than 15% in one company, and at least three sectors (banking, insurance, hydropower, manufacturing…).
Trading on emotion
Fear sells the bottom, greed buys the top. Rule: write the buy price, the stop price and the target on paper before you place the order, then follow the paper.
Expecting quick money
NEPSE has doubled and halved within two-year stretches. Rule: judge yourself over years, not weeks; 12–15% a year compounded is an excellent result.
Ignoring the costs
Commission, SEBON fee, DP charge and capital-gains tax take roughly 1% of a round trip plus 5–7.5% of the profit. Rule: know the break-even price of every position.
Your first four steps
Learn, open, buy small, review — in that order.
Learn the mechanics 1–2 weeks
Read this guide series end to end. Know what T+2 means, how a book close works, and what EPS, PE and dividend yield tell you. Follow five companies for two weeks without buying: note the price each day and the news behind the moves.
Open the accounts 3–7 working days
Demat and MeroShare at a depository participant, a trading account at a broker, and your PAN. Change the temporary passwords the day you receive them.
Buy small and deliberately first 3 months
Start with Rs 5,000–10,000 in one or two established companies — a large commercial bank, a life insurer or a producing hydropower company with a dividend record. Apply for every IPO you qualify for through MeroShare: allotment is by lottery, and the minimum application is ten shares at face value.
Keep a log. Date, symbol, quantity, price, the reason you bought, and the price at which you would sell. Reviewing it monthly is the fastest education there is — Own Portfolio keeps the numbers for you.Build the habit ongoing
Add a second sector, then a third. Put a fixed amount in every month regardless of the index level. Learn one piece of analysis at a time — dividend history first, then valuation, then charts.
Four beginner-friendly strategies
Simple, slow, and proven in this market.
Monthly investing (SIP)
A fixed amount — say Rs 3,000 — into the same one or two companies every month. You buy more shares when prices are low and fewer when they are high, and you stop trying to time the market.
Blue-chip first
Large, profitable companies with a long dividend record: the biggest commercial banks, established life insurers, producing hydropower. Slower, steadier, and they pay you while you wait.
Diversify by sector
Banking, insurance, hydropower and one other sector, rebalanced once or twice a year. A slump in one sector then dents rather than sinks the portfolio.
Hold for years
Compounding needs time, and long-term capital gains are taxed at 5% instead of 7.5%. Think of a share as part of a business you own, not a ticket to trade.
A six-month plan
What to learn, what to do, and what you should have at the end of each month.
| Month | Learn | Do | You end the month with |
|---|---|---|---|
| 1 | This guide series; T+2; book close; the three accounts | Open Demat, MeroShare and the trading account; watch five companies | Working logins and a watchlist |
| 2 | Reading a result: EPS, PE, dividend history | First purchase, Rs 5,000–10,000, one established company; first IPO application | One position and a log entry |
| 3 | Sectors and what drives each | Second company from a different sector | Two sectors |
| 4 | Costs, tax and break-even | Start a fixed monthly amount | A monthly habit |
| 5 | Position sizing and stop levels | Review every holding against the reason you bought it; trim anything over 15% | A balanced book |
| 6 | One chart tool — moving averages or RSI | Third sector or a larger monthly amount | A confident, diversified beginner |
Book a beginner session
An hour with a Portexa analyst: accounts, your first purchase, and your questions.
Sessions are one-to-one, online or at our office, and cover whatever you need: choosing a depository participant, placing your first order, reading a company's results, or planning a portfolio. Tell us the date that suits you and we confirm within one working day.
- Beginner — accounts, the first purchase, the first IPO.
- Technical analysis — reading charts and Portexa IQ signals.
- Fundamental analysis — results, ratios and valuation.
- Advanced trading — flow, operators and risk management.
What to remember
- You need three accounts before your first order: a Demat (holds shares), MeroShare (IPOs, holdings, EDIS) and a broker trading account — with your PAN.
- Start small — Rs 5,000–10,000 in one or two established companies — and keep a log of every buy: the reason, the price and the price you would sell at.
- Spread the risk: no more than 15% in one company and at least three sectors.
- Know your costs: commission, SEBON fee, DP charge and capital-gains tax take roughly 1% of a round trip plus 5–7.5% of the profit.
Marked as read on this device — the guide home shows your progress.
About this guide. Written for investors in the Nepal Stock Exchange. Fees, tax rates, market hours and price bands follow the schedules published by NEPSE, SEBON, CDSC and the Inland Revenue Department and change from time to time — confirm the current figure with your broker or depository participant before you act on it. Nothing here is investment advice.