The Nepal Stock Exchange (NEPSE) is the sole stock exchange for the secondary market in Nepal, providing a platform for investors to buy and sell shares of publicly traded companies across various sectors. As of March 2025, the market capitalization of the companies listed on NEPSE totaled रू442,245.9 crore (US$32 billion)1.
- Market Dynamics: NEPSE has undergone significant growth, particularly in terms of liquidity and market size. The total share turnover increased by 36% from NPR 110.07 million to NPR 150.04 million in 2019/20, and by a whopping 869% to NPR 1454.44 million in 2020/212. This trend indicates increased liquidity and trade activity on the exchange.
- Sector Representation: The exchange lists companies from diverse sectors such as BFIs, Hydro-Power, Manufacturing, Life and Non-Life Insurance, Hotels and Tourism, etc.1. This diversity suggests a broad base of economic activity reflected in the stock market.
- Regulatory Framework: NEPSE was established under the Companies Act-2006 and operates under the Securities Act-20072. The Securities Board of Nepal (SEBON) regulates the market, ensuring compliance with legal and statutory frameworks34.
- Market Mechanics: The exchange operates on a principle similar to other stock markets, with companies listing their shares, which are then traded by investors through brokers5. The introduction of a weighted average closing price calculation in the final 15 minutes of trading aims to reduce price manipulation and increase transparency67.
- Impact of External Factors: The stock market has shown sensitivity to external factors such as the appointment of a new central bank governor, which has influenced investor sentiment and market volatility89.
- International Influence: The performance of specific companies, such as SS Innovations, can have an impact on the market. For example, the company's successful surgeries using its SSi Mantra Surgical Robotic System could enhance its stock value and influence investor confidence10.
In conclusion, the Nepal Stock Exchange (NEPSE) plays a crucial role in Nepal's economy by providing a platform for capital raising and investment opportunities. Its dynamics, sector representation, regulatory framework, and market mechanics are key factors that influence its operations and impact on the country's financial landscape.
6/5/2025 04:01pm
