Things that stock market investors should pay attention to

A share is a part of a company's capital. Joint capital companies issue it. By buying shares, you become a part of the company and get the right to participate in the company's profits. After the company issues the initial share issue (IPO) and is listed on the stock exchange, such shares are called stocks. All common people can buy and sell such stocks.

The securities issued by the company are called Ordinary Shares after the dividend is distributed from the profit earned by the company annually to the preferred shareholders at a specified rate. These types of shares are the daily traded shares in the stock market.

Shares issued by the company to distribute dividends at a fixed rate from the profits earned by the company annually are called Preference Shares. It also has different types. Such as: change-unchange, non-participation in profit-participation in profit, return after a certain period of time-non-return, voting rights-not etc.

Ordinary shareholders have the right to participate in the profits of the respective company, to participate in the annual general meeting, to express their opinion on the agenda of the meeting, to receive information and annual reports about the company, to vote for the nomination of directors of the company on behalf of ordinary shareholders, and to be able to nominate candidates for the position of director on behalf of ordinary shareholders. they do

Dividend is the profit that is distributed to the shareholders immediately after capitalizing the company's profit or reserve fund. The profit given in the form of shares is called Bonus Share (Stock Dividend), while the existing shareholders have the first right to purchase shares, and the additional shares issued to them proportionally at the par value is called Right Share.

Risk is also associated with share investment. It is not guaranteed that the price of shares purchased by investors will always increase or that all companies will pay dividends. However, to manage the risk, the investment amount can be divided into different types of securities. Also, while investing in shares, you can choose shares of different sectors and companies. Risk can be managed through investment diversification (Portfolio Diversification). Debentures, bonds are considered low risk stocks. Similarly, preference shares and units of mutual funds are considered low-risk stocks, while common shares are considered risky stocks. If you make a long-term plan and invest in good stocks, you can definitely get profits.

The market price is determined by the pressure of investors who want to buy and investors who want to sell. The market value of the company is mainly influenced by aspects such as the progress report and operational results of the related organization, the return provided to the investors, the development and expansion of the organization. In general, if the demand for securities of an organized organization increases, its price increases and if the demand decreases, the price decreases.The price is determined by the interaction of supply and demand. For this, priority order is decided based on price and time.

Basic aspects: When investing in securities, one should invest carefully with a long-term plan while keeping information about various aspects such as analysis of the company, possibility of return, ability to bear risk, investment objective, size of investment, holding period.

Financial analysis: Investors who want to buy listed securities in the securities market should consider the performance of related organized organizations, financial statements and annual reports, quarterly statements, market branch conditions of the founders/directors, published from time to time by organized organizations and the prices given from time to time by Stock Exchange Ltd. It is safer to make a decision regarding investment by looking at price sensitive information as well.In addition, it is advisable for the investor to make a decision regarding the purchase and sale of securities after obtaining the necessary information and suggestions from stock broker companies or stock analysts/experts or authorized organizations that work on investment management.

Technical Analysis: Investing by gaining knowledge of technical analysis such as Price trends, Chart patterns, Oscillators, Moving averages, Support and resistance levels, Volume and momentum indicators, etc. will lead to more secure investment and profit.

Capital Gain: If the shares are sold at a price higher than the purchase price, capital gain is obtained

Dividend: The company can distribute some part of the earned profit to the shareholders as cash dividend. It is decided and distributed by the annual general meeting of the company.

Bonus shares: The company can give additional shares free of charge to the previous shareholders. If there is sufficient amount in the accumulated fund, the company can increase the capital of the company by issuing bonus shares. It is decided and distributed by the annual general meeting of the company.

Right share: The existing shareholders have the first right to buy the shares and they are provided with the facility to buy them proportionally at the par price. Existing shareholders can sell the remaining shares to non-shareholders through the auction process without applying within the deadline.

Liquidity: Compared to fixed assets, stocks (shares) are mostly liquid in nature. You can get cash within a few days by selling such shares.

Highest returns: Investing in shares prudently with long-term planning can give relatively higher returns than bank interest.

Borrowing can be done by securing mortgage: You can also borrow from bank financial institutions by keeping stocks (shares) as mortgages like real estate and other properties.

Primary market: Companies call for initial public offering (IPO) through prospectus containing financial situation, plans and other information. An application can be made for the purchase of such shares. For this, the demat account, bank account should be in the applicant's own name. C-ASBA registered in the bank and CRN can be obtained and applied directly in the bank or through "Meroshare" online system.Shares are distributed according to the application received based on the prevailing laws. After distribution in this way, it is listed in the secondary market so that everyone can buy and sell. Merchant bankers mediate for primary shares.

Secondary market: In the secondary market, buying and selling of shares should be done through an official stock broker company. You can do business yourself by taking online facility. First of all, take the full citizenship certificate from the broker company, submit the customer ID and other prescribed forms and then register your name in the system.Transactions can be done online or offline by getting the signal number. Customer's demat account, bank account must be mandatory. Detailed information and information can be obtained from your nearest broker company.

According to the purchase and sale orders received from the investors, the stock broker companies enter the investor's name, company name, price, etc. in the computerized trading system of the stock exchange in order of priority. The transaction is completed after the purchase and sale orders entered in this way are matched on the basis of price/time priority. The orders entered by the customer who transacts business online are also transacted in the same way.For selling, sell orders should be placed only after ensuring that the stock is available in your demat account. The transaction can be done only if the customer who buys has deposited at least 25 percent of the deposit.

The transaction is completed within 2 days after the Rafsaf T+2 process i.e. the day of transaction. The selling customer must transfer the shares through "Meroshare" within the day after the sale. In the same way, the customer who buys should make the full payment of the purchased amount within the next day.Within 2 days after the day of the transaction, CDS and Clearing completes the Rafsaf process, i.e. transfers the shares and funds to the respective broker. After that, the respective broker company transfers the money to the bank account of its customers and transfers the shares to the demat account.

If the securities seller does not hand over the shares after the investor receives the information/notification of the completed transaction according to his order, a penalty of 20 percent of the transaction amount will be imposed. Similarly, if the buyer does not pay the purchase amount on time, the settlement must be completed within T+2, so the funds have to be arranged from alternative sources.If the related stockbroker company incurs interest expenses or any other losses, such expenses or losses should be borne by the respective investors. In addition, by correspondence with the agencies, action may be taken so that no stock brokers can do business.

Securities Central Depository System After allotment of the securities issued in the securities market, keeping the securities records by taking charge of the respective securities owners, completing the securities transactions in a clean and clear manner, clearing and transferring the names quickly, keeping securities safe, keeping electronic records of securities or ownership rights, etc.Providing important services is an important infrastructure of the securities market. The central depository system records the rights of the securities holders of the participating companies and prevents the issuance of securities in excess of the permitted issuance.

To get necessary information for shares and other securities transactions, you can contact stock brokers (stock broker companies) directly, by telephone or through the website. Also in this regard, Nepal Stock Exchange Ltd. through its website www.nepalstock.com.np and Nepal Securities Board website www.sebon.gov.npInformation can be obtained. Also, for other information, the Stock Brokers Association's website www.sbanepal.com.np or phone no. 01-4168105 and can be contacted through e-mail sbannp@gmail.com.