Capital Max Moves Into Margin Trading, Secures Rs. 1 Billion Credit Facility

Capital Max Securities Limited, a stock brokerage company operating as Stock Broker No. 62, has started preparations to introduce margin trading services for its investors. The company is in the process of arranging a Rs. 1 billion short-term bank facility to finance share purchases for clients under the margin trading framework issued by the Securities Board of Nepal (SEBON). Care Ratings Nepal has assigned the proposed bank facility a ‘CARE-NP A3’ rating, indicating a satisfactory capacity to meet financial obligations on time and a moderate level of credit safety. The move is also aimed at diversifying Capital Max’s revenue sources, as around 85 percent of its current income comes from share trading commissions. Once margin trading begins, the company will generate additional interest income from loans extended to investors, reducing its reliance on commission-based earnings. Capital Max plans to fully implement the margin trading facility from FY2027. Despite beginning operations only in FY 2079/80, the company has rapidly expanded its presence in Nepal’s stock brokerage industry. By the end of FY 2081/82 (FY25), it held around 2.12 percent market share, placing it among Nepal’s top 10 stock brokers, with approximately 23,000 active clients. The company has also emphasized technology-driven services through its own web-based trading platform. Its financial performance has remained strong, with operating income rising 130 percent to Rs. 25.40 crore in FY 2081/82, while net profit reached Rs. 12.40 crore. Its cost-to-income ratio stood at just 14.13 percent, reflecting operational efficiency. However, the company still faces challenges, including its relatively limited operating track record and high dependence on overall market turnover. With the launch of margin trading, managing credit risk and market volatility will be critical to its future performance. The company is expected to benefit from regulatory initiatives by Nepal Rastra Bank and SEBON aimed at strengthening margin lending and developing Nepal’s capital market.