When you say you want to buy a company’s stock, you are essentially buying some fraction of the company in the form of shares. For instance, if you visit RSEB Website, you will see that a share of BNB is currently trading at Nu. 31 (Dec, 2020). This means that any authorized individual or entity can buy a share of company BNB at the stipulated price. However, buying and participating in the trading of shares is easier said than done. We shall go over the exact process of how to be able to buy a share of BNB but before that, we must understand the role that brokers play in this entire process.
Brokers are nothing but entities that facilitate the trading of stocks in the ‘secondary market.’ Initially, when the companies decide that they need more money to do business, they float their shares to the public in the form of IPO – initial public offerings. This is called the primary market. The face value of the shares in Bhutan during the IPO is usually Nu. 10 and the going price has a premium amount attached to it. For instance, the IPO of Sherza (SVL) shares saw their shares trade at Nu. 13 with the premium of Nu. 3 which goes directly to the broker RICB. This trade happens between the issuing company and the buyer.
After the IPO, the shares are traded amongst the buyers in the secondary market. The rise and fall of the stock price in the secondary market are primarily driven by the demand and supply principle. If the demand for a particular share is high, the share price goes up. Whereas if the shares are being put up for sale in droves, the price of the share plummets. Brokers act as an intermediary that facilitates the trades, charging certain fees. The fee comes in the form of a fraction of the transaction amount. For instance, if a person buys 100 shares of BNB at the rate of Nu. 31, the fee levied upon the buyer as well as the seller is 1% of the transaction amount each. That is 1% of (100 * 31) which amounts to NU. 31. The buyer as well as the seller each have to pay Nu. 31 to the broker.
In order to buy a BNB share, it is required that you maintain an account with the Royal Securities Exchange Commission. There are essentially two forms and they are the CD form and client agreement form. You may print the forms below and submit the completed ones to the broker of your choice.
| CD Account Opening Form | Client Agreement Form |
Presently there are 7 brokers and they are as follows;
- BNB Securities
- RICBL Securities
- BDBL Securities
- BOB Securities
- Drukyul Securities
- Lekpay Dolma Securities
- Sershing Securities
Once your account is created with RSEB, you will be notified about the same. The only thing left for you to do then would be to commence the trading process. The form to buy and sell is as shown below.
If you are a tech-savvy person and would like the freedom to be able to trade shares in your own time and place, there is a mobile app called m-CaMS. The app allows you to do the following;
- Buy and Sell Shares
- View your share balance
- View market movement
In order to avail of the mobile app option, the process is as follows;
- Register with Broker as mentioned above.
- Fill up a form to avail of the app service and submit it to your broker
The mobile app service comes with a yearly charge of Nu. 500 which needs to be deposited with your broker during the time of submitting the form.
