- SEBON proposes a new NEPSE Benchmark Index focusing on free-float shares to provide investors with a clearer picture of actual market movements.
- The system will split into the NEPSE All Equity Index for total value and the NBI for stocks available for public trading.
- Removing locked-up founder shares from the calculation will eliminate data skews and more accurately reflect the market's true performance.
- The regulator aims to launch the new benchmark by mid-December 2026 and is currently soliciting feedback on the proposed draft.
Kathmandu, Nepal: Nepal’s stock market regulator wants to change how market ups and downs are measured, giving everyday investors a clearer picture of where share prices are actually heading.
The Securities Board of Nepal (SEBON) has proposed a new benchmark index that tracks only the shares available for public trading. Under the current setup, the main NEPSE Index counts all listed shares—even massive holdings owned by company founders, the government, or locked up under legal restrictions that regular investors cannot buy or sell.
As a result, a rise or fall in the headline index often fails to reflect what is happening to the shares actually moving on the market floor.
Fixing the Math
Under SEBON's draft plan, the headline index will be split into two:
NEPSE All Equity Index: Will keep tracking the total market value of all listed companies.
NEPSE Benchmark Index (NBI): Will focus strictly on "free-float" shares—the stock people can actually trade.
The regulator pointed out that bank promoter shares created a big skew in the old formula. Founder shares are often locked up or trade at different prices than ordinary shares, yet the current index values them all the same. The new index drops those non-tradable founder shares out of the equation.
Better Data, But No Quick Fix
NEPSE already runs a basic Float Index, so SEBON will need to finalize how this new benchmark differs and what extra rules—like minimum trading volume or company limits—it will use.
The change is part of the government's broader market action plan, which sets a deadline to launch the new index by mid-December 2026 (Mangsir 2083).
While market watchers welcome the move, they note that a new index is just a better measuring tape. It will make market data clearer, but it won't automatically boost share prices, lift trading volumes, or solve deeper issues like weak company disclosures and slow regulatory enforcement.
SEBON is currently taking feedback on the proposal before locking in the final rules.
