Glossary

Beneficiary Owner Identification — the 16-digit number of a Demat account. The first eight digits identify the DP.

Example. You enter your BOID when you apply for an IPO.

Free shares issued from reserves in a ratio. They add shares but not value on the day, because the price is adjusted; taxed at 5% of face value.

Example. A 20% bonus gives 20 new shares for every 100 held.

The date a company freezes its shareholder register to decide who receives a dividend, bonus, right share or vote. Holders in the Demat register on that date qualify.

Example. To qualify, buy at least two trading days before the book-close date.

The fee a broker charges on every trade, fixed by NEPSE in slabs from 0.36% (up to Rs 50,000) down to 0.24% (above Rs 10 million), minimum Rs 10.

Example. A Rs 50,000 purchase carries Rs 180 of commission.

Centralised Application Supported by Blocked Amount, and the registration number a bank issues for it. The IPO money stays blocked in your bank until allotment.

Example. Ask your bank for a CRN before your first IPO application.

Tax withheld by the broker on the profit of a sale: 5% for individuals holding at least 365 days, 7.5% for shorter holdings, 10% for companies.

Example. Holding a year before selling cuts the tax from 7.5% to 5%.

Profit paid out per share as a percentage of the Rs 100 face value, credited to your bank after 5% tax.

Example. A 12% cash dividend pays Rs 11.40 per share after tax.

CDS and Clearing Ltd — the central depository. It keeps every Demat account, clears and settles trades, and runs MeroShare.

Example. Your shares are held in CDSC's records under your BOID.

A market-wide trading halt triggered when the NEPSE Index moves by a set percentage (4%, 5% and 6%) within a session.

Example. A 4% index fall halts trading for a set period before it resumes.

The broker's confirmation of a trade with the exact price, quantity, commission, fees and tax.

Example. Keep contract notes; they are your record of cost for tax.

A fixed-interest bond issued by a company (usually a bank) and listed on NEPSE. It pays a fixed coupon and repays the principal at maturity.

Example. A 10-year 9% debenture pays Rs 9 a year per Rs 100 unit.

A dematerialised account that holds shares electronically instead of as paper certificates. Every NEPSE trade settles into or out of one.

Example. Shares you buy on Sunday appear in your Demat on Tuesday (T+2).

A bank, broker or merchant banker licensed by CDSC to open and service Demat accounts.

Example. Most commercial bank branches are DPs; you can open a Demat there.

Annual dividend per share divided by the share price, the income return on the price you pay.

Example. Rs 15 of dividend on an Rs 500 share is a 3% yield.

Electronic Delivery Instruction Slip — the transfer a seller submits in MeroShare, by the next working day, so the sold shares reach the broker for settlement.

Example. Sell in the morning, submit the EDIS the same day.

The trading day before the book close, from which shares trade without the benefit. NEPSE adjusts the reference price for bonus and rights on this day.

Example. A 10% bonus turns an Rs 550 close into an Rs 500 reference price on the ex-date.

The nominal value of a share, Rs 100 for almost every NEPSE company. Dividends and IPO prices are quoted against it.

Example. A 15% dividend on a Rs 100 face value is Rs 15 per share.

NEPSE's record of every trade in a session: symbol, buying broker, selling broker, quantity and price. Portexa's broker and operator analysis is built from it.

Example. The floorsheet shows which brokers bought a stock today.

Initial and Further Public Offering — a company's first sale of shares to the public, and a later one. Applied for through MeroShare; oversubscribed IPOs are allotted by lottery in lots of ten.

Example. The minimum IPO application is 10 shares — Rs 1,000 at face value.

The last trading day on which a purchase still qualifies for an announced benefit — two trading days before the book close, because of T+2 settlement.

Example. With a Thursday book close, the last cum-date is Tuesday.

A period during which certain shares — promoter shares after an IPO, or shares from a merger — cannot be sold.

Example. A three-year lock-in on promoter shares ends before they can hit the market.

Last traded price — the price of the most recent trade in a stock. MeroShare and most portfolio screens value holdings at it.

Example. A stock's LTP can differ from its closing price until the session ends.

CDSC's online portal into a Demat account: apply for public offers, see holdings, and transfer sold shares (EDIS). Renewed yearly for a small fee.

Example. IPO applications are made in MeroShare's My ASBA screen.

A SEBON-approved scheme that pools investors' money and invests it in listed shares and debentures; closed-end funds trade on NEPSE, open-end funds are bought and sold at NAV.

Example. A closed-end fund's units can trade below their NAV.

Nepal Stock Exchange — the only stock exchange in Nepal. It runs the trading system, sets market hours and price bands, and publishes the NEPSE Index.

Example. NEPSE trades Sunday to Thursday, 11:00 to 15:00.

An order for fewer than ten shares. Odd lots trade in their own session after the main market.

Example. Selling the 7 bonus shares you were credited is an odd-lot trade.

The total face value of all issued shares. Dividend and bonus percentages are declared against it.

Example. A 10% bonus on Rs 10 billion of paid-up capital issues Rs 1 billion of new shares.

Price to book value — the share price divided by book value per share. Below 1 means the market values the company at less than its net assets.

Example. A share at Rs 300 with a book value of Rs 200 has a PBV of 1.5.

Choosing how many shares to buy so that a stop-loss costs a fixed fraction of your capital — commonly 1–2%.

Example. Rs 4,000 of risk ÷ Rs 40 per share = 100 shares.

The half hour before continuous trading (10:30–11:00) when orders are collected and the opening price is found, with a ±2% band.

Example. Orders entered in the pre-open match at a single opening price at 11:00.

The daily limit on how far a stock's price may move from the previous close — ±10% during continuous trading, ±2% in the pre-open. At the limit the stock is said to have hit its circuit.

Example. A stock closing at Rs 500 can trade between Rs 450 and Rs 550 the next day.

Shares held by a company's founders and sponsors. They trade separately from public shares, usually at a discount, and only to eligible buyers.

Example. Bank promoter shares are listed under a separate symbol ending in P.

The right, in an announced ratio, for existing shareholders to buy new shares — usually at Rs 100 — through MeroShare during an application window. Unapplied rights lapse.

Example. A 1:5 right lets a holder of 100 shares buy 20 more.

Return on equity — net profit divided by shareholders' equity, the return the company earns on its owners' money.

Example. An ROE of 15% means Rs 15 of profit for every Rs 100 of equity.

Securities Board of Nepal — the regulator. It licenses brokers and merchant bankers and approves IPOs, rights issues, bonus issues and mutual funds.

Example. A bonus share is credited only after SEBON approves the issue.

A price, decided before you buy, at which you will sell to cap the loss on a position.

Example. Buying at 500 with a stop at 460 risks Rs 40 per share.

Trades settle two trading days after the trade day: shares to the buyer's Demat, money to the seller.

Example. A purchase on Thursday settles on Monday — Friday and Saturday are not trading days.

Trading Management System — NEPSE's online trading platform, served to investors through their broker. Every broker's TMS looks the same.

Example. You place buy and sell orders on the TMS.