You may have probably heard the term share market. In fact, for businessmen, this is the most common word. Whereas, for regular people like many of us, this is an uncommon word. Therefore, today we will be talking about the share market focusing mainly on the context of Nepal.
To begin with, let’s talk about the share market. Share market is the process where you are buying or selling the share of any company when you do this you will earn a partial profit from the company as an owner. Before starting or investing money in the share market you have to understand the market of that certain business so that you can earn money passively also. In simple terms, your share refers to your ownership in the company where more shares result in more ownership.
You may probably wonder, why do people start a company just to sell ownership of the company? Well, that’s because the share market holder is indirectly your investor. Other people believing in your company will invest certain money in the company in return to which you have to sell your share of the company. And in time if the company progresses, you will also profit from the investment.
As simple as that may sound, it is a tricky business. For a normal people with no experience in this field, this may be hard. To be precise, you have to predict the company uprise before it happens and bet on that company. Fortunately, there are a lot of traders that may help you in the investment.
Share market in Nepal
In the context of Nepal, the Nepal Stock Exchange Limited is the only Stock Exchange of Nepal. Here, you can see the performance of many companies and buy their stocks. However, with close inspection, you can find that a lot of company stocks are usually positive therefore making it less risky to invest money in Nepal.
IPO Vs FPO
There are two types of shares namely IPO ad FPO.
IPO is a kind of the first subscription for the first time. It includes the offer of securities made to the public for the first subscription. Therefore, it is highly riskier than FPO. Its issuer is an unlisted company where its raising capital is through the first time from the public. However, it is less predictable but may have higher profits than FPO.
FPO refers to an offer of securities for subscription to the public by a publicly-traded enterprise. Therefore, it is less risky. Its raising capita; is through a subsequent public contribution. As it is more predictable it is also less likely to be profitable than FPO.
These are basic share market knowledge you should know before engaging in the stock market.