Kathmandu. KATHMANDU: Nepal’s two largest securities broker companies have started the process of taking loans worth Rs 3 billion from banks with the aim of expanding margin trading services. Dakshinkali Investment and Securities Pvt. Ltd. and Kalash Stock Market Pvt. Ltd. have provided credit rating for short-term bank . Traditionally, these companies, which have relied solely on broker commissions, have in recent years prioritized margin lending to diversify their sources of income through interest income (.

Dakshinkali Investment & Securities, which has been active in the market for the past 15 years, has been rated for short-term loan facility of Rs 2 billion.CARE Ratings Nepal has assigned a rating of ‘Care-NP A3′. Currently ranked 18, the broker plans to mobilize the loans to provide margin trading facilities to investors and to manage the working capital.

In the financial year , the company had a turnover of Rs. 54.26 billion in the financial year 2082/83 and the net worth is Rs. 503 million. Similarly, another emerging broker company, Kalash Stock Market, is preparing to take a loan of Rs 1 billion.

The company, which has been successful in increasing the market share of 1.12 in a short span of time, has been given a rating of ‘Care ‘‘CARE-NP A4 Plus’. Kalash, which started its business business in 2024, has increased the number of customers to about 17,340.

The company has adopted a strategy of providing margin facility to its customers at a premium rate by taking loans from banks at cheap interest rates. The company, which has been approved for margin loan from the stock exchange , currently accounts for 96 percent of the company’s income, but it is expected that the interest income will balance the financial balance in the coming days.

Brokers have been attracted to this service due to the policy flexibility in margin loan by Nepal Ra stra Bank and the Margin Trading Facility Directive issued by the Securities Board of Nepal (SEBON).After increasing the limit of the single customer loan of the banks and reducing the risk weight of the share loan to 100 percent, it has become easier for banks to disburse loans through brokers.

In addition, the government has adopted a policy of starting short selling and intraday trading in the stock market in the coming days and allowing Non-Resident Nepalese to enter the secondary market, which is expected to increase liquidity and transactions in the market and the demand for margin loans will be high. However, with the expansion of margin trading, the risk of broker companies is also increasing.

Experts suggest that attention should be paid to credit risk and liquidity management as rapid fluctuations in the market can affect both commission and interest income.The additional loan of Rs 3 billion through brokers is expected to increase the availability of capital in the secondary market and keep the overall market morale high.