Kathmandu. The Nepal Securities Board (NSB) has informed that it is preparing to provide license to Citizen Stock Dealer Company Limited with a capital of Rs 5 billion within a year.

The stock dealer company will have a joint investment of Citizen Investment Fund, Rastriya Purnabi Ma Company Limited and Nepal Telecom. The company owns 51 percent of the Citizens Investment Fund, 10 percent of Nepal Reinsurance Company and 9 percent of Nepal Telecom. Thirty percent of the investment is earmarked for the general public.

A stock dealer company with a paid-up capital of Rs 5 billion has been set up in the company with an issue of Rs 3.5 billion from the founder and Rs 1.5 billion from the public. It is said that it will take two years to go for IPO after the company comes into operation. The company has set a target of building a portfolio of Rs 50 billion within a few years.

Stock dealers are being brought into operation to increase the entry of institutional investors in the capital market and to make the capital market more dynamic. There is no question of broker commission in stock dealers. The company trades shares in bulk.

The stock dealer company will invest in the share market by creating a 'basket fund' from the founding shareholders.

Shares can be bought and sold in bulk through stock dealers. Stock dealers are expected to balance unnaturally rising and falling stock markets.