कमिसन आम्दानी ५१५ रुपैयाँ — केही ब्रोकर कम्पनीको अस्तित्व नै संकटमाMonthly Commission of Rs. 515 — Some Broker Companies Fighting for Survival

Nepal's stock market slowdown has reached a point where the very existence of several broker companies is now under serious threat. In the month of Jestha, 91 broker companies collectively earned Rs. 36.62 million in commission from share trading — but that income was far from evenly distributed. Three companies failed to earn even Rs. 50,000 in commission for the entire month, raising urgent questions about how they can continue to operate.

The numbers tell a stark story. Pahi Investment earned just Rs. 49,122, Beni Securities Rs. 39,307, and Money World Share Exchange a barely believable Rs. 515 in commission throughout the entire month of Jestha. To put that in perspective, Rs. 515 would not cover a single day's wages for even the most junior employee. Yet these companies are expected to pay staff salaries, office rent, TMS charges, and a range of other operational expenses every single month.

This is not a new crisis — it has been building for some time. In the previous fiscal year, all three companies recorded significant net losses. Pahi Investment lost Rs. 6.514 million, Beni Securities Rs. 8.050 million, and Money World Share Exchange Rs. 10.001 million. What makes this particularly alarming is that last year's trading volumes were actually higher than they are now. Even with comparatively better market activity, five broker companies were already running at a loss. The situation this year is considerably worse.

Secretary General of the Stock Brokers' Association of Nepal, Bhaktiram Ghimire, points to the dramatic collapse in daily trading volume as the root cause. Daily average turnover that once stood between Rs. 15 billion and Rs. 16 billion last year has now shrunk to just Rs. 2 billion to Rs. 3 billion — a decline of nearly 80 percent. When turnover falls by that magnitude, commission income falls with it, and no amount of cost-cutting can bridge that gap.

Ghimire was direct about the financial reality facing broker companies. "Running a broker company costs approximately Rs. 1.5 million per month just to keep the lights on," he said. "Staff salaries, office rent, TMS charges, and miscellaneous expenses all add up. But income is a fraction of that. How are these institutions supposed to survive?" He added that when new broker companies entered the market, there was genuine hope that new services and additional revenue streams would emerge. That hope has not materialized. The business remains almost entirely dependent on buy-sell commissions with no meaningful diversification.

On the subject of margin trading, Ghimire was equally candid. Despite considerable discussion and regulatory approval, real implementation has barely begun. The auction market has not taken shape either. In the absence of these alternative products, some broker companies have resorted to pledging their own assets with banks to borrow money and offer margin trading facilities — a deeply unsustainable model that puts the companies themselves at financial risk.

The broader investor landscape offers little comfort. Since the formation of the new government, total market capitalization has shrunk by more than Rs. 400 billion. Investors have lost confidence and adopted a wait-and-watch approach, keeping their money on the sidelines. With buyers reluctant to enter and turnover continuing to fall, broker companies are caught in a downward spiral they cannot escape on their own.

Against this difficult backdrop, the Stock Brokers' Association of Nepal has submitted a series of recommendations to Nepal Rastra Bank ahead of the upcoming monetary policy. The association has called for banks and financial institutions to be allowed easier entry and exit in the secondary market, removing the current requirement to hold securities for at least six months before selling. It has also proposed that margin trading loans be developed as a separate financial product and classified as commercial lending, with share collateral and margin-type loans excluded from the 40 percent core capital limit and calculated instead on the basis of total loan investment.

The association has further urged that Non-Resident Nepalis and foreign institutional investors be given a smoother pathway to invest in the secondary market and repatriate profits. It has also recommended that government savings bonds and treasury bills be listed on NEPSE to enable secondary market trading — a move that would significantly broaden the investment universe and attract a wider pool of participants.

On a more immediate operational concern, the association has requested an amendment to the bank account freeze regulations. When broker company settlement accounts are frozen during investigations, normal trading operations are disrupted for clients who have no connection to the matter under investigation. The association argues that settlement accounts, which handle client funds rather than company funds, should be treated differently and protected from blanket freezing orders.

Industry observers note that policy changes alone will not be enough to rescue broker companies from their current predicament. Restoring investor confidence, filling the leadership vacuum at SEBON, providing clear and consistent policy direction, and diversifying the product range available in Nepal's capital market are all seen as essential prerequisites for any meaningful and lasting recovery.