Kathmandu. The Nepal Stock Exchange (NEPSE) has clarified that the stock market index is calculated on the basis of weighted average price through an automated system.
Nepse has issued this clarification in a press release to address the public concern regarding the calculation of NEPSE index. “The NEPSE index is calculated by multiplying the transaction value of each transaction by the number of listed shares after the market opens at 11 am in the regular trading session,” the statement said.
According to the NEPSE statement, after 3 pm, nepse’s automated system calculates the NEPSE index by extracting the weighted average price from each transaction price and the number of shares traded. “In the first phase, the automated trading system calculates the weighted average price i.e. the final price based on each transaction price and number of shares of each company from 2:45 am to 3:00 pm,” the statement said. ’
Therefore, nepse has clarified that calculating the index in the regular session will not affect the number of shares traded in the company. “The number of traded shares of the company has an impact on the calculation after 3 pm,” the statement said, adding, “This global good practice has been implemented as per the decision of the NEPSE Board of Directors in accordance with the ‘Transaction Operation Bye-laws (Fourth Amendment), 2081’ approved by the Securities Board of Nepal.” ’
