Insider Buying and Selling: How to Track It in NEPSE
Insider trading activity can reveal powerful signals about a company’s future. This guide explains how to track insider buying and selling in NEPSE, what it means for investors, and how to use it in your trading strategy.
1. Introduction: Why Insider Activity Matters
In every stock market, insiders—company directors, executives, and major shareholders—have better access to internal business information than regular investors.
When these insiders buy or sell shares in their own company, it can be a strong market signal.
In NEPSE:
Insider Buying often suggests confidence in the company’s future.
Insider Selling might signal caution—or simply personal financial needs.
Knowing how to track these transactions can help you stay ahead of the curve.
2. Who Counts as an Insider in NEPSE?
According to Securities Board of Nepal (SEBON) guidelines, insiders include:
Board of Directors
CEO and senior executives
Major shareholders (owning more than 5% of company stock)
Immediate family members of insiders
These individuals must disclose their transactions within a certain period.
3. Why Insider Buying and Selling Happens
3.1 Insider Buying Reasons
Belief that stock is undervalued
Upcoming positive earnings or projects
Confidence in company growth
3.2 Insider Selling Reasons
Need for personal cash (not always bad news)
Diversifying investments
Concerns about future business performance
4. How Insider Transactions Affect NEPSE Stocks
Positive Impact: Large insider buying can boost investor confidence, leading to price rallies.
Negative Impact: Heavy insider selling can trigger panic selling among retail investors.
Neutral Impact: Small or regular transactions may have little effect.
5. Where to Track Insider Buying and Selling in NEPSE
5.1 NEPSE Official Website
The “Company Announcements” section often includes insider transaction notices.
5.2 SEBON Disclosures
Public records of insider trades are available in the SEBON disclosure database.
5.3 Company Filings
Listed companies issue public notices in national newspapers and their websites.
5.4 Third-Party Platforms
Websites like Nepalytix provide filtered insider trade data with alerts.
6. Step-by-Step: Tracking Insider Trades
Visit nepalstock.com and check your stock’s announcements.
Look for “Director Shareholding Change” or “Insider Trading Report.”
Verify transaction type: Buying or Selling.
Compare the trade volume to total outstanding shares.
Monitor price and volume reaction in the days after.
7. Key Ratios to Assess Insider Activity
% of Shares Traded by Insiders – Higher % = more significant.
Buy/Sell Ratio – More buying than selling suggests bullishness.
Transaction Value – Large monetary value indicates stronger conviction.
8. Insider Activity Patterns to Watch in NEPSE
8.1 Cluster Buying
Multiple insiders buying within days → Strong bullish signal.
8.2 Sudden Heavy Selling
One or more insiders selling large stakes quickly → Caution.
8.3 Repeated Small Buys
May indicate slow accumulation over time.
9. Case Studies from NEPSE
Example 1: Hydropower Company
CEO purchased 50,000 shares at Rs. 120.
Within 3 months, stock rose to Rs. 180.
Example 2: Banking Sector
Director sold 100,000 shares just before Q4 earnings miss.
Stock dropped 12% in 2 weeks.
10. Limitations of Insider Trading Data
Not always predictive: Selling doesn’t always mean trouble.
Delayed reporting: Transactions might be disclosed days later.
Multiple motives: Insiders trade for personal reasons too.
11. How to Use Insider Data in Your Strategy
✅ Combine with Fundamentals: Insider buying is stronger when supported by good earnings.
✅ Watch for Patterns: Single trades matter less than repeated actions.
✅ Time Your Entry: Use insider buying as confirmation, not the sole reason to invest.
✅ Be Wary of Overreaction: Insider selling doesn’t always mean sell-off.
12. Legal Framework in Nepal
In Nepal:
Insider trading based on non-public material information is illegal.
SEBON monitors unusual trading patterns and investigates suspected cases.
Violations can lead to fines and bans.
13. 2025 Trends in Insider Trading in NEPSE
Increased transparency due to digital reporting.
Retail investors getting more aware of insider data.
Higher activity in hydropower, banking, and insurance sectors.
14. Final Checklist for Insider Trade Analysis
Step | Question | Action |
|---|---|---|
1 | Is the trade large? | Yes → More significant |
2 | Multiple insiders involved? | Yes → Stronger signal |
3 | Supported by fundamentals? | Yes → Consider buying |
4 | Sector trend positive? | Yes → Higher conviction |
Conclusion
In NEPSE, insider buying and selling can be valuable clues—but they work best when combined with other forms of analysis.
Track them regularly, understand the context, and avoid making decisions on insider moves alone.
With the right approach, insider data can give you a competitive edge in spotting early trends before they hit the headlines.
💡 Pro Tip: Use Nepalytix’s Insider Tracker feature to get real-time alerts on director transactions so you never miss critical market moves.