NEPSE Glossary

Bank and Financial Institution

NRB-licensed entities, divided into Class A (commercial banks), B (development banks), C (finance companies), and D (microfinance).

Beneficiary Owner Identification

16-digit number that identifies you to NEPSE's central depository (CDSC). Required for every IPO application.

Your BOID is issued by the Depository Participant (DP) where you opened your Demat. Different DPs may use different BOID prefixes — but the full 16-digit value is unique to you across all NEPSE participants.

Free additional shares issued to existing shareholders from retained earnings. Increases share count, dilutes price.

Adjust your historical price chart to account for bonuses, otherwise the trend lines will look discontinuous on the ex-bonus date.

The two-digit identifier for each NEPSE-licensed stockbroker. Visible in every floorsheet row.

Tracking buy/sell concentration by broker code is the cornerstone of broker-flow analytics. Some broker codes are dominated by institutional flow, others by retail.

Book Value Per Share

Total shareholders' equity divided by shares outstanding — the accounting per-share value.

Combined with market price, BVPS yields the P/B ratio. P/B below 1 means the market values the company below its accounting equity — sometimes a bargain, sometimes deserved.

Capital Adequacy Ratio

Bank capital as a percentage of risk-weighted assets. NRB minimum is 11% (with a 2.5% buffer).

Below 11% means the bank can't pay dividends and must raise capital. Above 13% is comfortable; above 15% means the bank has room to grow the loan book aggressively. Quality matters too — look at CET1, not just total CAR.

Current and Savings Account ratio

Share of a bank's deposits sitting in cheap-funding current and savings accounts versus expensive fixed deposits.

Higher CASA = lower cost of funds = wider NIM. A bank with 45% CASA has a structural cost advantage over one with 30% CASA. CASA erosion in a rate-cutting cycle is a classic margin-pressure signal.

Credit-to-Deposit ratio

Loans divided by (deposits + core capital). NRB caps this — at the cap, banks can't lend more without raising deposits or capital.

CDS and Clearing Ltd

The central depository for NEPSE-listed securities. Operates Mero Share and the BOID infrastructure.

Common Equity Tier 1

The highest-quality slice of a bank's capital — common equity plus retained earnings, no hybrids.

NRB stress-tests against CET1. A bank with headline CAR of 11.4% but weak CET1 composition is more fragile than the headline suggests.

NEPSE's daily price band — ±10% from the previous day's close. Orders outside the band are auto-rejected.

Designed to limit single-day moves. Sectoral indices also have their own circuits in extreme conditions. The band makes gap-and-go technical patterns less developed in NEPSE than in uncapped markets.

Market-wide trading halt triggered when the NEPSE index moves beyond a threshold in a single session.

Unique identifier for each executed floorsheet trade. Same contract has one buyer, one seller, one quantity, one rate.

Dematerialised account

The electronic account where your NEPSE shares live. Opened at a Depository Participant (DP) such as a bank.

Converting physical share certificates into electronic Demat entries — required for trading on NEPSE since 2018.

Annual dividend divided by current share price, expressed as a percentage.

A 6% dividend yield on a NPR 500 stock means NPR 30 of cash dividends expected over the year. Compare against bank fixed-deposit rates as a baseline alternative.

Depository Participant

A SEBON-licensed institution (usually a commercial bank or merchant banker) that opens and maintains your Demat account.

Earnings Per Share

Net profit divided by shares outstanding. The denominator of the P/E ratio.

Watch EPS trends across quarters, not just the latest number. EPS jumps driven by one-off other income don't repeat; jumps from operating leverage do.

Fixed Deposit

A time-deposit at a bank that pays a fixed interest rate (typically 8%+ in Nepal) in exchange for locking up the money.

The day-end record of every executed trade on NEPSE — buyer broker, seller broker, symbol, quantity, rate, amount.

Public, free, and one of the highest-information surfaces in NEPSE. Aggregating it per broker per symbol shows accumulation and distribution patterns invisible at the price-chart level.

Follow-on Public Offering

A new share issue by a company that's already listed — usually at a price above the historical IPO price.

Shares of a listed company available for public trading — i.e. not held by promoters, government, or strategic holders.

NEPSE index weights are scaled by free-float, not total shares outstanding. A company with 60% promoter holding contributes far less to the index than its market cap suggests.

Initial Public Offering

A company's first sale of shares to the public. In Nepal, almost always issued at NPR 100 par.

Oversubscribed IPOs are allotted by lottery; allotment results publish on Mero Share and CDSC's bulk-result tools. The day-one listing typically opens well above par.

The merchant banker that manages an IPO, FPO, or right issue — handles pricing, allotment, and regulatory filings.

A buy or sell order that only executes at your specified price (or better). Sits in the book otherwise.

A regulatory restriction preventing promoters from selling their shares for a set period after listing — typically 3 years in Nepal.

Last Traded Price

The most recent execution price for a stock. Snapshots the order book, not the closing print.

Moving Average Convergence Divergence

Trend-following momentum indicator built from two EMAs. Crossover above signal line = bullish.

Total shares outstanding multiplied by current price — the market's total valuation of the company.

A buy or sell order that executes at whatever the best counter-quote is, immediately.

Faster than a limit order but in a thin order book can fill at a surprising price. Use sparingly in NEPSE microcaps.

CDSC's online portal where you apply for IPOs, view your Demat holdings, and process corporate actions.

The headline market-cap weighted index of every NEPSE-listed security, scaled by free float.

Heavily influenced by commercial banks (largest sector weight). When the banking sub-index moves, NEPSE moves.

Net Interest Margin

The spread a bank earns between interest income and interest paid, as a percentage of earning assets.

A NIM above 3.5% is healthy in the Nepali context; below 3% suggests rate-cycle pressure, CASA erosion, or aggressive competition.

Non-Performing Loans

Gross NPL divided by total loans. Below 2% is excellent; above 4% demands serious explanation.

NPL is a lagging indicator — defaults appear after the macro pain that caused them. Pair with loan-loss provision growth (forward-looking) and the watchlist ratio (earliest) for a complete picture.

Nepal Rastra Bank

Nepal's central bank. Sets monetary policy, regulates BFIs, and issues directives that materially move banking stocks.

Price-to-Book

Share price divided by BVPS — the market premium to (or discount from) accounting equity.

Particularly meaningful for banks, where most of the value is asset-backed. Healthy commercial banks typically trade 1.2–2.5x book.

Price-to-Earnings

Share price divided by EPS — how much investors pay per rupee of earnings.

Compare across sector peers, not absolute. Banking sector P/E in Nepal has historically ranged 8–18x; sector-mean P/E shifts with the rate cycle.

The face value of a share — NPR 100 for nearly all NEPSE-listed securities. IPOs almost always issue at par.

The share of a company owned by the founding promoters or controlling group. Restricted from public trading for a lock-in period after listing.

An offer by a listed company to its existing shareholders to buy additional shares — usually at a discount.

Right ratios (e.g. 1:2 means 1 right share for every 2 held) and the entitlement record date are disclosed on the Mero Share app and on the official NEPSE filings page.

Return on Equity

Net profit divided by shareholders' equity — how efficiently the company turns equity into earnings.

Relative Strength Index

Momentum oscillator that ranges 0–100. Above 70 = overbought, below 30 = oversold (by convention).

In a momentum-driven market like NEPSE, uptrending stocks routinely sit at RSI 75+ for weeks. Look for RSI divergence — price making new highs while RSI doesn't — as a more reliable signal than absolute level.

Securities Board of Nepal

Nepal's capital markets regulator. Approves IPOs, oversees NEPSE, licenses brokers, and supervises mutual funds.

NEPSE settles trades two trading days after execution. Shares hit your Demat on T+2; sale proceeds credit on T+2.

Plan working capital accordingly: rapid in-and-out trading isn't truly possible without funds tied up across multiple cycles.

A corporate action that divides each existing share into multiple shares, reducing price proportionally.

Cosmetic on day one — the market cap is unchanged — but increases liquidity and lowers the psychological per-share barrier for retail buyers. Adjust historical price charts accordingly.

Risk-adjusted return — average return above the risk-free rate divided by the standard deviation of returns.

Compare strategies on Sharpe, not raw return. A 20% return with a 40% drawdown isn't obviously better than a 12% return with a 6% drawdown.

Price levels where the market has previously failed to break — support below, resistance above.

Stronger after multiple distinct tests. A broken support often flips to resistance on the way back up; vice versa for broken resistance.

Trade Management System

The broker-side online trading platform where you log in to place NEPSE orders. Each broker runs their own TMS instance.

Total value of shares traded in a session — for one stock, one sector, or the whole market.

Turnover is the most-watched liquidity metric. A stock with consistent multi-crore daily turnover is investable; one with sub-lakh turnover is a microcap with execution risk.

Total quantity of shares traded in a session. Volume confirms or contradicts price moves.

A breakout on 2x average volume is credible; the same breakout on tepid volume is likely to fail. Volume reads better in concert with broker concentration.

Volume-Weighted Average Price

The average price at which a security has traded, weighted by volume — total amount divided by total quantity.

A user-curated list of stocks for monitoring without holding a position.