On the day before the formation of the new government led by Balendra Shah ‘Balen’, who secured a clear majority in the general elections, the Nepal Stock Exchange (NEPSE) index stood at 2950 on Chaitra 13. Now, approximately six months after the election and five months into Balen’s administration, the NEPSE index dropped to 2593 on Monday. This decline reflects a loss of over NPR 6 trillion in market capitalization, a key indicator of the country’s financial health. Investors and analysts interpret this as a ‘red signal’ regarding the government’s policies and approach.
The country’s sole stock exchange, NEPSE, has been operating at a sluggish pace for the past few years. The highest point recorded was 3198 on Bhadra 2, 2078 (August 18, 2021). Since then, the index has consistently trended downward. When the Balen government took office, NEPSE’s total market capitalization was over NPR 50 trillion; however, as of Monday, this value has declined to NPR 44 trillion. The index fell by 356.85 points. Experts note that the morale of the private sector and investors, already shaken by last year’s Gen Z protests and destruction, remains fragile.
Share investor Gopikrishna Thapā commented, “Currently, investors lack confidence.” He added, “Our stock market should be in the 4000–5000 range, but the government has failed to implement mature policies.” Radha Pokharel, President of the Nepal Capital Market Investors’ Association, also expressed concern: “Assurances alone are insufficient. There is no tangible improvement, no stability, and no policy clarity.”
Economist Professor Ram Prasad Gyawali highlighted three key signals from the NEPSE decline. He stated, “The most important aspect is that despite ample liquidity and low-interest rates in banks, the lack of credit flow indicates declining confidence among businessmen.” He further remarked that the current government has not gained reliable trust from the business community. Although approximately 7 million demat or beneficiary accounts have been opened for stock trading in Nepal, experts estimate that only about 400,000–500,000 investors actively trade.
