Check out how much commission investors paid in last 41 trading days; Rs 66.35 arba turnover recorded

The market has shown a positive sign with the green color on NEPSE. Investors’ sentiment towards the market is transforming. SS Pro confidence meter reflects a strong confidence in the market. Moreover, in the past, the negligence of government has been seen as the major hurdle for a positive sentiment among investors. In order to rectify, online trading, brokerage licenses to banks, branches outside valley for broker houses and few other steps had been undertaken. The outcome of the efforts is being seen gradually. However, it’s time for the government to further boost the confidence of the investors.

Amidst all these, the brokers are in constant profit with the increasing transactions. The brokerage service plays a major role in investors’ decision to buy and sell shares. At the moment, the investors’ sentiment is converting to a positive note, so government can interfere and decrease the brokers’ commission. While the brokers will still be in profit due to high transactions, a larger number of investors will enter the market. This can take the market to bigger height.

Upcoming year will be undoubtedly a new roadway to the brokers in Nepal. Broker houses have been offering online trading facility to investors. They are putting in consistent effort to open branches outside the valley. The threat of competition is also there from the banks subsidiary which will be soon provided with brokering licenses. It would be fair to say, broker houses have new responsibilities and roles to shape the market from now onwards. The broker’s commission also plays a huge role from brokers’ and government’s side to shape the market.

Rs 66 arba turnover in 2 months Vs. Rs 66 arba turnover in 7 months:

The turnover is increasing day by day with new record and in last 2 months (Jan 1- Feb 26, 2020) turnover recorded Rs 66.35 arba whereas same amount of turnover was achieved in last 7 months (May 5- Dec 31, 2019). 

Here are the list of 50 brokers and their performance throughout from 1^st January to 23^rd February:

*Average 0.5% is taken for commission calculation purpose

* Net commission do not includes operation costs, corporate tax and other obligation of broker house.

* Rs 7.75 arba is recorded on Feb 24 and 25 which is not included on above table.

From 1st January to 23rd February, the total amount of both buy order and sell order was approximately Rs 57 arba. The total amount was Rs 1.14 kharba in all 50 broker houses. The sum of net commission of all fifty broker houses amounted to Rs 37.64 crores. The broker commission is ranged from 0.4 to 0.6% where an average of 0.5% has been taken for calculation purpose in the table. Out of gross commission, 20% is charged by NEPSE while 15% is paid to government as TDS. The remaining portion after deducting these obligations is the net commission received by the broker house.

In the time period, Naasa Securities Private Limited (Broker no 58) earned the highest commission of 2.16 crores within review period. The same broker has the highest transaction amount worth Rs 6.62 arba. Similarly, Vision Securities Company Limited (Broker no 34) with has the second highest net commission worth Rs 1.80 crores. Finally, Online Securities Pvt. Limited (Broker no 49) is in the third position with a net commission of Rs 1.78 crore. There is 1 broker company with a net commission above Rs 2 crore, 9 broker houses with net commission above Rs 1 crore and remaining brokers houses with net commission below Rs 1 crore.

The upcoming days are of essence as the broker houses are required to market themselves among a newer segment of online traders. Similarly, with banks implementing broker services, it is further to see how the broker companies will react to this event. Will there be cases as brokers being acquired by banks? How will broker houses provide more professional services and trade in a larger scale in the upcoming days? The major challenge of broker houses remains to pull in the investors all over Nepal, bring a completely new segment of online traders into the market and assist the current investors with lack of computer skills in online trading.