Kathmandu: Nepal Stock Exchange (NEPSE) has implemented a new system from 20 March 2025, under which the weighted average price of transactions in the final 15 minutes of trading will be used as the official “closing price.”
The change follows the approval of the Securities Trading Regulations (Fourth Amendment) 2024 by the Securities Board of Nepal (SEBON), endorsed by NEPSE’s board meeting on 18 March 2025.
Under the new arrangement, the weighted average price of trades executed between 2:45 PM and 3:00 PM in the regular trading session is taken as the closing price. However, some investors have complained that this method occasionally produces discrepancies.
According to NEPSE, the calculation considers not only the price at which shares are traded but also the volume of shares traded at each price.
Typically, a stock is traded at multiple prices throughout the day. For example, in the last 15 minutes, if a stock trades 1,000 units at Rs 490, 200 units at Rs 495, 10 units at Rs 500, and 10 units at Rs 505, the simple average of these prices would be Rs 497.5.
But such a simple average does not reflect the true market reality, because most of the volume occurred at Rs 490, while very few shares traded at Rs 505. To address this, NEPSE applies a weighted average method that gives greater importance to prices with higher transaction volumes.
Using the same example, Rs 490 (with 1,000 trades) carries more weight, while Rs 505 (with only 10 trades) carries very little weight. The weighted calculation produces an average of Rs 491.02, which is then recognized as the final 15-minute average, or the official closing price.
NEPSE states that this system is designed to make the market more transparent. Without it, a small number of trades executed at artificially high or low prices in the final moments could distort the closing price and misrepresent the true state of the market.
By factoring in trade volumes, the weighted average method minimizes such manipulations and ensures that the closing price better reflects actual market conditions.
Thus, NEPSE’s closing price calculation is not a simple arithmetic mean but a weighted average process that incorporates both price and trade volume, presenting the market as fairer and more reliable.
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