Investing in NEPSE from Abroad: A Reality Check for Nepali Workers

Talk to Nepali workers abroad about money and, sooner or later, someone brings up the share market. Usually it starts with an IPO. A friend got an allotment, the price went up, and now everyone in the room wants a Mero Share account.

I understand the excitement. I also think a lot of us are walking into the market with the wrong idea of what it can do for us. This is not an argument against investing. It is an argument for doing it in the right order.

The remittance quota is real, but it is not a strategy

Since Kartik 17, 2079 BS, the Securities Board of Nepal has reserved 10 percent of IPO shares for Nepalis working abroad. That was a good decision. It gave migrant workers a fair chance in issues that are usually heavily oversubscribed.

To use it, you generally need a remittance savings account in your own name, a demat account linked to it, and Mero Share access. Banks typically ask for your labour permit, passport, visa and photo, and some require proof of regular remittance deposits. One more rule matters: if you apply for an IPO under the remittance quota, you cannot also apply for the same IPO under the general public quota. Applying twice can get your application disqualified. Requirements change and differ by bank, so confirm the current rules with your bank before you start.

But here is the uncomfortable part. Even with a quota, IPO allotment is mostly luck. Most applications receive the minimum number of units or nothing at all. An IPO habit is a nice bonus. It is not a plan for the money you are working so hard to earn.

The secondary market is a different game

Buying shares after listing is where real risk begins, and it is also where many workers abroad get hurt.

The problem is not intelligence. It is time and information. NEPSE now trades Monday to Friday, during Nepal's working hours. For someone in South Korea, that is mid-afternoon, usually in the middle of a shift. You cannot watch the market, read company reports, or react to news the way a full-time investor in Kathmandu can.

So many of us end up relying on tips: a Facebook group, a Telegram channel, a cousin who "knows someone." Some tips are honest. Many are not. A stock that is being pushed hard in a group is often already expensive by the time a worker in Korea hears about it.

If you cannot research a company properly, you are not investing in it. You are guessing.

What a sensible order looks like

From what I have seen, Nepali workers who end up in a good position after their contract tend to follow roughly the same sequence, whether they realise it or not.

First, clear expensive debt. If you borrowed at a high rate to come abroad, paying that off is a guaranteed return. No share will reliably beat it.

Second, build an emergency fund. A few months of expenses, kept in a savings account you can reach quickly. This is what stops you from selling shares at a loss the day something goes wrong at home.

Third, invest regularly, not occasionally. A monthly systematic investment plan in a mutual fund suits workers abroad well, because it does not depend on watching the market or timing anything. A fixed amount goes in every month, and someone whose full-time job is managing that fund makes the stock decisions.

Fourth, only then, direct stock picking, with money you can afford to leave alone for years. Keep it a smaller share of your total savings, and choose companies you actually understand: their business, their profits, their dividend history.

Questions to ask before you buy any share

Before buying, I would want honest answers to a few simple questions:

1. What does this company actually do, and how does it make money?

2. Has it made a profit in most of the last five years?

3. Am I buying because of the company, or because a group told me to?

4. If the price fell 30 percent next month, would I hold or panic?

5. Is this money I might need in the next two years?

If the last answer is yes, it probably should not be in shares at all.

A note for banks and brokers

Nepal's financial institutions have made it easier for migrant workers to open accounts from abroad. The next step should be education. A simple guide in Nepali, sent when a worker opens a remittance account, explaining risk, diversification and the difference between investing and speculating, would protect a lot of hard-earned money.

The bottom line

Workers abroad are some of the most disciplined savers Nepal has. We give up years with our families to earn this money. It deserves better than a tip from a stranger.

Use the remittance quota. Apply for IPOs. But build the foundation first: no expensive debt, an emergency fund, steady monthly investing. The share market rewards patience far more than excitement, and patience is something every worker abroad already knows how to practise.

Note: This article is for general information and is not personal financial advice. Rules for remittance accounts and IPO quotas change; confirm current requirements with your bank or SEBON.

Article By: Prakash Nepali