Nepal Stock Exchange (NEPSE) has unveiled the list of all companies in which Nagarik Stock Dealer can invest.
While a stockbroker only facilitates security trades on behalf of investors, a dealer facilitates trades on behalf of itself. This means that Nagarik Stock Dealer will buy and sell shares on behalf of itself, not for other investors. The term stock dealer doesn't describe just anyone buying and selling securities — It only applies to those who do so as a part of their business. If they aren't buying and selling as a part of a business, they are traders.
There are only 39 companies on the entire list of companies in which Nepal's very first stock dealer can invest. There are 26 commercial banks, 7 development banks, 4 microfinance companies, one Hotel (Taragaon Regency Hotel), and Nepal Doorsanchar Company Limited from the "Others" sector.
The exchange approved the concept of a stock dealer and gave the license to Nagarik Stock Dealer with hopes that it will make Nepal's capital market more liquid and transparent to change in market sentiment.
Nagarik Stock Dealer Company is a subsidiary company of Citizen Investment Trust (CIT). CIT has an investment of Rs.2.50 Arba (51% stake) while Nepal Telecom and Nepal Reinsurance Company have an investment of Rs.50 Crore (10% stake) and Rs.45 Crore (9% stake) on the market maker respectively. Nagarik Stock Dealer will enjoy the first mover’s advantage for a brief period until other stock dealer firms enter the market.