Nepal stock exchange at the end of the day published the transaction index which is called Nepse index. In simple language, the base market capitalization is taken which is special to calculate Nepse index. The base market capitalization is February 12, 1994. In this day, share transaction was held for the first time. It is the first index to show the work of stock market. The increase in the value and transaction of transacted share increase then the market capitalization value also increase. While calculating the market capitalization, the total share is multiplied by the certain day’s share value. As there is different value of share number and share price, separate multiply value is calculated and added later to find the total sum. In this way, market capitalization is calculated. For example, the company named ‘SBC’ has registered 5, 00,000 number of shares @ Rs 100. On that day, market capitalization value was Rs 50 crore. The market capitalization of each company is added to find out total market capitalization. Stock exchange finds out the market index on the base of market capitalization.
When the market capitalization increases, the Nepse index also increase and where market capitalization decreases, the Nepse index also decrease. For example, on Ashad 24, 2067, the total market capitalization was Rs 3 Kharba 61 Arab 59 crore 77 lakh where as adjusted base market capitalization was Rs 78 Arab 59 crore 70 lakh 5 thousand only. Likewise, Nepse index calculation formula is given below.
Current Market Capitalization
NEPSE index = × 100
Adjusted Base Market Capitalization
Rs 361597.70
Or, Nepse Index= × 100
Rs 78597.05
= 460.07
Therefore, the Nepse index was close at 460.07 points.
