Nepal’s economy is undergoing dynamic shifts marked by turbulent stock market performance, aggressive central bank interventions, declining foreign investments, booming exports, and sweeping policy reforms. From NEPSE fluctuations to ginger exports to Europe, here’s a detailed breakdown of the nation’s financial pulse.
📉 Stock Market Swings: NEPSE Dances Around 2600 Mark
Nepal Stock Exchange (NEPSE) has shown signs of stagnation and investor hesitation. On Thursday (Asar 12), the NEPSE index dropped 4.45 points to 2595.74, despite a notable transaction volume exceeding NPR 7.78 billion.
Weekly, NEPSE fell by 1% to close at 2628.91, with total trades worth NPR 52.6 billion. Interestingly, on Monday, the market saw the highest turnover in 3.5 months, crossing NPR 13.18 billion, although the index only rose by a modest 2.80 points.
⚡ Hydropower Shares Electrify Investors
Hydropower stocks are powering the market. Butwal Power Company led the charge with over NPR 620 million in share trades, followed by Radhi Hydropower and Ngadi Group Power. On Monday, the hydropower sector accounted for more than 67% of total trade, or NPR 4.33 billion.
In the past two weeks, hydropower shares gained 7.8%, outperforming all other sectors. Microfinance and trading sectors also saw modest gains.
🚨 Market Manipulation Concerns Rising
NEPSE faces increasing scrutiny over market manipulation. Tactics include spreading false rumors and conducting high-volume trades to create artificial demand or panic.
Proposed solutions include:
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Stronger regulations and penalties
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Investor education via workshops and courses
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Real-time data transparency from listed companies
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Promoting market diversification beyond banking
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Encouraging investors to rely on verified news sources
💹 Calls for a Second Stock Exchange Intensify
Experts are once again pushing for the establishment of a second stock exchange in Nepal. Benefits could include:
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Use of modern trading infrastructure
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Enhanced competition and efficiency
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Introduction of new financial products like green bonds
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Greater NRN investment inflow
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Boost to national revenue through diversified markets
🏦 NRB’s Strategic Moves: Stability, Inclusion, and Oversight
Nepal Rastra Bank (NRB) has rolled out impactful measures:
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Foreign Exchange Rate Update (Asar 27):
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USD: Buy – NPR 136.84, Sell – NPR 137.44
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Euro: Buy – NPR 160.14, Sell – NPR 160.84
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Forex for IT Investors: NRB has allowed foreign exchange access for foreign investors in IT, with strict compliance and legal action for misuse.
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Liquidity Management: Amid liquidity crunch, NRB has started 21, 42, and 63-day deposit collections, withdrawing NPR 50 billion through auction.
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Bank Mergers: Since 2017, mergers have reduced financial institutions by 91 (46 from Class ‘C’, 37 from Class ‘B’, and 4 from Class ‘A’).
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Financial Literacy: Programs like ‘NRB with Students’ and ‘Global Money Week’ aim to promote financial inclusion.
📉 FDI Falls Sharply, Revenue Trends Shift
Nepal’s Foreign Direct Investment (FDI) has plummeted by 70% in the past 6 years, raising concerns about the investment climate.
However, revenue collection remains promising:
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Birgunj Customs Office: NPR 158.6 billion in 11 months (79% of annual target)
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Mechi Customs: NPR 14.43 billion (91.56% of target)
🌿 Nepal’s Exports Bloom: Ginger & Dog Chews
Nepal’s farmers and exporters are tapping new global markets:
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Nisdi, Palpa exported 23,250 kg of fresh and dried ginger to Europe
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Dog chews reached record exports, boosting Nepal’s international profile
🏭 Industrial Woes: Shutdowns and New Launches
While some sectors bloom, others shrink:
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40 industries shut down in Salyan, citing low demand and weak promotion
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In contrast, Everest Fiber Cement Board Industry in Rautahat is now operational, producing 75,000 sq ft per day
🏨 Tourism and Tech: Fresh Momentum
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Royal Tulip Hotel, a global luxury chain, is opening in Gwarko, Lalitpur, offering one of Nepal’s largest event halls
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WorldLink Communications earned NPR 11.12 billion in revenue in 2024
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eSewa Money Transfer partnered with Touch ‘n Go eWallet in Malaysia
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Manjushree Finance launched ‘Smart Deposit’, enabling digital savings via mobile wallet
🚘 EV Push Continues
BYD’s Dolphin-025 electric vehicle is now officially available in Nepal through Cimex Inc., indicating growing EV interest and market expansion.
📜 Policy Shifts & Regulatory Developments
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A new National Civil Aviation Policy 2025 is in the works, replacing the outdated 19-year-old framework
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Controversial ‘Take and Pay’ clause in energy contracts to be revised
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New Electricity Trade Guidelines to enable private sector access to transmission lines
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Cyber Security Bill 2082 still under review; experts urge clarity
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Banking Offense Act Amendment now extends to cooperatives and savings groups
⚖️ Other Key Updates
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One suspect arrested for Asar 12 bank robbery
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Journalists Subba and Shrestha released on bail of NPR 25,000 each in contempt case
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Nepal beat Scotland by 2 wickets in international cricket
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IPO deadlines:
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Chhyangdi Hydropower rights share extended till Asar 27
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Daramkhola Hydro IPO open since Asar 9
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🧾 Conclusion
Nepal’s economy is a landscape of contrasts — bullish hydropower stocks and expanding digital finance collide with falling FDI and struggling industries. With a proactive NRB, evolving trade policies, and a push for capital market reform, Nepal may be on the verge of a financial transformation.
