22 insurance companies qualified for trading by stock dealers; NRIC eliminated

One insurance company (Nepal Re-Insurance Company Limited) has been eliminated from the list of listed companies eligible for trading by licensed stock dealers for the fiscal year, 2082/83. The Nepal Stock Exchange (NEPSE) recently released a list of 110 eligible companies for trading by licensed stock dealers.

Four new insurance companies have managed to make their way into the list. These companies include Himalayan Reinsurance Limited (HRL), Sun Nepal Life Insurance Limited (SNLI), Prabhu Mahalaxmi Life Insurance Limited (PMLI) and Citizen Life Insurance Company Limited (CLI).  

Other companies qualified were Asian Life Insurance Company Limited (ALICL), Himalayan Life Insurance Limited (HLI), Life Insurance Corporation (Nepal) Limited (LICN), National Life Insurance Corporation Limited (NLICL), Nepal Life Insurance Company Limited (NLIC), Sanima Reliance Life Insurance Limited (SRLI), and Suryajyoti Life Insurance Company Limited (SJLIC).

Additionally, other eligible companies included Himalayan Everest Insurance Limited (HEI), IGI Prudential Insurance Limited (IGI), Neco Insurance Company Limited (NIL), Nepal Insurance Company Limited (NICL), NLG Insurance Company Limited (NLG), Prabhu Insurance Limited (PRIN), Sagarmatha Lumbini Insurance Company Limited (SALICO), Shikhar Insurance Company Limited (SICL), Siddhartha Premier Insurance Limited (SPIL), United Ajod Insurance Company Limited (UAIL), and Sanima GIC Insurance Limited (SGIC).

These companies were deemed eligible for trading in compliance with the Securities Stock Dealer Operation Guidelines, 2077, said the NEPSE.

The criteria for companies’ qualification includes

1. Be profitable over the past three years.
2. Have a minimum of 10,000 shareholders.
3. Have a paid-up capital higher than 20 crore.
4. Must have traded on 80% of the trading days in the last year.

NEPSE updates the list every year. A stock dealer seeking to trade should present a list of the qualifying companies.

A licensed stock dealer cannot trade the security that is not mentioned in its list. However, it can carry out such transactions via a broker company.

A licensed stock dealer can trade securities in a single day whose monetary amount should not exceed 60% of its net worth. It should also keep Rs. 50 lakhs cash or bank guarantee in NEPSE in order to trade listed securities for commercial purposes. Similarly, it can freely trade securities amounting to 25 times this amount kept as collateral.

Moreover, a stock dealer cannot trade exceeding 50,000 units at once of companies with paid-up capital higher than 8 arba. This limit is 40,000 units for companies with paid-up capital between 5 to 8 arba and 30,000 units for companies having lesser than 5 arba and higher than 2 arba as paid-up capital.

Similarly, companies with paid-up capital between 1 and 2 arba can only have 25,000 units traded. This limit is 20,000 for companies with paid-up capital between 50 crore to 1 arba and 10,000 for companies with paid-up capital between 20 crore to 50 crore.

A minimum of 1000 units can be traded at once for all the companies.