The capital markets in Nepal have grown significantly in recent years. Trading began in 1937 and the Nepal Stock Exchange was established in 1994. Currently there are over 300 listed companies and the daily trading volume and total market capitalization have increased substantially. The banking, insurance, hydropower and manufacturing sectors make up the majority of listed companies. Overall market indicators suggest the Nepalese economy and capital markets have strong growth potential.

1. Capital Markets Scenario in
Nepal

2. History
• Started with the floatation of shares by Biratnagar Jute Mills
Ltd. and Nepal Bank Ltd. in 1937
• Introduction of Company Act in 1964 opened doors for
companies to go public
• Securities Exchange Center Ltd. was established in 1976 to
systemize the trading activities
• Securities Exchange Center was converted into Nepal Stock
Exchange in 1993
• 13th January 1994: Nepse (Nepal Stock Exchange) opened its
trading floor for members and market intermediaries, such as
broker, market makers

3. Current Scenario
• Recent trends show active participation of
individuals and institutions towards Capital Markets
• In last 6 years, investors have put in fresh investment
which is more than 50% of total IPO investment
made in Nepal till date
• The annual turnover in Nepse has increased multiple
folds in last couple of years

4. Details of Listed Securities
Category Number of Securities Listed Shares
Commercial Banks 30 693,929,440
Development Banks 96 264,010,818
Finance Companies 58 165,539,288
Insurance Companies 22 64,509,282
Hotels 4 54,041,060
Hydropower Companies 6 63,317,222
Manufacturing & Processing 18 43,206,235
Others 2 150,491,285
Trading Companies 4 1,169,461
Government Bond 16 224,000,000
Corporate Debenture 19 7,597,370
Preferred Stock 2 4,121,750
Mutual Funds 2 125,000,000

5. Securities Issued
4.72 2.63 3.34 4.19
14.71
5.68 10.49
16.61
24.93 23.43
101.74
171.76
110.46
69.95
30.11
108.20
59.60
Amount of Securities Issued (in USD million)
*Exchange Rate as on 18 August 2014: 1 USD = NPR97.98

6. Average Daily Transaction
Volume
Average Daily Transaction (In USD)
*Exchange Rate as on 18 August 2014: 1 USD = NPR97.98
23,251
215,217 111,034 230,428
576,486
1,063,647
686,824
307,094 327,900
755,664
1,549,413
4,021,404
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

7. Market Structure
Commercial Banks,
34.58%
Development Banks,
Preferred Stock, 0.31%
Mutual Fund, 0.47%
Others, 0.42%
Hydropower, 14.57%
Trading, 0.02%
Hotel, 4.27%
Manufacturing &
Processing, 0.74%
Finance Companies,
2.83%
Insurance Companies, 10.10%
28.91%
Promoter Share, 2.78%

8. Capital Markets in Nepal
• Current Market Capitalization
– As of August 18, 2014: NPR 1034.548 billions, i.e. USD 10.558 billions
• Market Capitalization to GDP
– GDP (2013/14) as per NRB Monetary Policy 2014-15: NPR 1724.59
billion, i.e. USD 17.60 billion
• Bank Loans to GDP
– As of May 2014, Total Loans/Credit by Banks and Financial Institutions:
NPR 1087.66 billion, i.e. USD 11.10 billion
• Annual Turnover of Capital Market to GDP
– Annual Turnover: NPR 50.04 billion, i.e. USD 510.72 million
*Exchange Rate as on 18 August 2014: 1 USD = NPR97.98

9. Price to Earnings Ratio for
Different Sectors
Market Multiples 2014
Average EPS Average PE
( Price as of July 3,2014)
Commercial Banking Sector 34.29 29.95
Insurance Company (Life) 70.60 44.59
Insurance Company (Non-Life) 35.93 20.90
Hydropower Sector 44.20 43.76
Nepal Telecom 76.49 7.84

10. Market Value to Paid-Up Value
Ratio
Sectors Paid-Up Value
*Exchange Rate as on 18 August 2014: 1 USD = NPR97.98
(in USD)
Market Value to PaidUp
Value Ratio
Commercial Banks 708,235,803 8.57
Development Banks 269,453,784 3.22
Finance Companies 168,952,121 3.96
Insurance Companies 65,839,235 18.83
Hotels 27,518,580 15.30
Hydropower Companies 64,622,598 12.54

11. Sources
• NRB Monetary Policy (2014-15)
• Nepal Stock Exchange Monthly Report Ashad
• Nepal Stock Exchange Data on Nepse, Listed
Securities and Broker List
• NRB Current Macroeconomic Situation Tables
• Kriti Capital Internal Financial Database

12. www.kriticapital.com.np
@KritiCapital
www.facebook.com/KritiCapital
www.linkedin.com/company/kriti-capital-&-
investments-ltd