Knowledge and Information, Stock Market

How to earn money from Share Market Nepal

Written by Roshan Bhattarai · 4 min read >

Many of us are interested in share because of the attractive amounts one can earn with a little bit of investment. With proper knowledge, patience, and analysis, one can definitely make the share market a side source of income. In this article, learn how to earn money from share market Nepal. Learning the basic fundamentals before investing your hard-earned money into the share market is definitely a wise choice.

Before we begin…

Let’s know what is a Share Market

Share is a part of a certain amount of capital i.e. divided into individuals, or certain numbers of people contribute to it. People or companies who hold shares of a company are called shareholders. And, the market where we can buy and sell shares is called a share market.

Click here to know about the basics terms of share market.

Share Market as a Source of Income

We know that the share market has high returns. Moreover, one can make a passive or side income from the share market. In addition, it requires proper technical and fundamental analysis of the share market he/she can easily earn side incomes for his living.

First of all, you will need to create a Demat account. Then, you can fill up for the Initial Public Offering (IPO) of the public companies. One can earn profit and dividends using this IPO.

Likewise, the share investors can also make a profit from the secondary market. They can buy shares of the companies for dividends in the secondary market. Investors can also invest in blue-chip stocks of the country. Blue-chip stocks are the companies which are earning profit continuously for a long time.

For instance, some of the Blue chip stocks are in Nepal are Nabil Bank, Nepal Telecom, Unilever Nepal Limited, Nepal Life Insurance Company Limited, etc. As well as, one can earn from the share through trading that is selling and buying in a short time.

In this way, one can make a profit from the share market and the secondary share market.

Share can give us a profit and return value. So, now let’s know about the reasons that make shares profitable.

Here are the ways how to earn money from share market

High Return Rate

The return in the Share market if compared to banks is higher. This makes the share, profitable.


Shareholders get a certain proportion of the company’s profit. Higher dividend is also one of the main reasons to make shares profitable.

Click here to know How to Buy Shares in Nepal?


The liquidity rate of shares is very high, so it can be converted into cash easily. So, liquidity also plays a major role in making shares profitable.


Diversification is also a benefit in the share market. For instance, you can diversify your portfolio on different types of companies. Moreover, from diversification, you can overcome your loss from one company to another company’s profit.

Protection from inflation

Share market always overtakes and beats inflation. So, the share market can protect you from the higher inflation rate.

These are the reasons that make the shares profitable. Investing in Share has higher returns, but it has higher risks too.

Here are some of the Risks of the Share Market

Interest Rate

We know that interest rates from banks are fluctuating. When the interest rate of banks is higher, the share market price goes down.

Unexpected Events

Moreover, unexpected events such as natural calamities, news, rumors, political changes, pandemics, a sudden change in government rules and regulations may also bring a crash in the share market.

Capital Loss

When a company you invested in is going into a loss and is unable to make a profit then you may be subjected to high risk in the share market.

Which are the top share brokers in Nepal? Click here to know more.


As we know, inflation is controlled by the share market. But excessive increases in inflation may affect the share market.

Time and market risk

Investing at the wrong time may increase risk in the shares market.  Different companies may perform differently in different seasons and different business cycles. Therefore, investing in the wrong season and wrong business cycle in a company may grow risk to your investment.

As now you know about the risks of the share market too. So, let’s now discuss how you can decide or know which company is profitable.

Click here to see the live updates of Share Market Nepal

Know Before Investing, Where to Invest in the Share Market

Deciding which company is profitable and is suitable to invest in requires better analysis, knowledge, and research of the market.

Firstly, you have to decide whether you are an investor or a trader. If you are a trader and investing for a short time, you need to do technical analysis and a little fundamental analysis too.

In technical analysis, from analysis of price charts and statistics, future prices are predicted. Using different indicators like Bollinger Band, Moving Average, and Relative Strength Index price are predicted and invested in that company. For traders, a proper technical analysis helps to know about profitable companies.

But if you are an investor and want to invest for a long time, you have to have knowledge of mainly fundamental analysis.

What causes the Rise and Fall of Shares? Find here the reasons.

Tips to compare which company is profitable

Before we invest, it is very important to know how to earn money from share market Nepal. Here are some tips to compare which company is profitable.

Qualitative Analysis

While deciding which company is profitable from the fundamental analysis you have to first know the history, Board of Directors, and about managers of the company very well. As well as that, you have to study in which sector it lies and analyze the performance of the whole sector properly. You should also know about its public relations, labor relations, etc.

Earnings Per Share or EPS

Earnings per share are a company’s profit per outstanding share of stock. Having high Earnings per Share shows the company is highly profitable.

Price-to-earnings (P/E) ratio

P/E is one of the best tools to analyze a company fundamentally. It is the company’s share price to the company’s Earnings per Share. With this, you can know if the share is overvalued or undervalued. The higher PE ratio shows that the public is very interested to invest in that share.

Return on Equity

Return on Equity or RoE shows the performance of a company and efficiency to make profits on its shareholders’ investment. It is calculated by dividing net earnings after tax by shareholders’ equity.

Dividend Payout Ratio

A dividend payout ratio shows how much the company has earned a profit. Moreover, it also shows what proportion of profit is divided by a company to its shareholders out as a dividend. The higher the dividend ratio, the higher is the company’s profit.

Find here the factors that affect the Share Market in Nepal

After choosing the profitable company from technical and analysis you should also need to know about the right time to invest in the share market. Hence, investing in the share market at the wrong time may be subject to higher risks.

On the End Note…

So, this is all about how to earn money from share market Nepal. Likewise, there are some reasons that make shares profitable. Along with that, there are also some risks in the share market that we need to be careful about.

Finally, it is a wise choice to know beforehand which company to invest in. Definitely, it is a smart thing to invest your hard-earned money in an area with a maximum return of investment.

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