I thought you guys might enjoy a bit of a NEPSE history refresher. I looked at the NEPSE peak of 2008, 2016 and of course, 2021 and had fun piecing together what was happening at the time so as to determine what caused it.

Hint: It’s banking crises. What do you guys think?

Link to article: [https://savingsnepal.com/nepal-stock-market/nepse-index-history/](https://savingsnepal.com/nepal-stock-market/nepse-index-history/)

More at: r/NepalStock by Karmicdoom

5 comments
  1. Good article

    I don’t think they are totally correct on 2008 crash, the great financial crisis 100% played some part to nepse’s crash, however, The main reason for it was Nepal Bank almost going bankrupt.

    Back then Nepal Bank was the main bank of the whole country, It had the most deposits and loans, every citizen had a account, ever significant business used Nepal Bank

    And just like in the USA; Nepal Bank started giving out loans to anybody, Turns out the loan department was corrupt and was giving out loans to any one who gave them bribes and also didn’t expect interest payments from them just, put them in NPL who gives a fuck. right?

    Nepal would of been so fucked if Nepal bank failed alongside the Maoist insurgency, however Nepal bank was saved by the world bank or the IMF I am not sure which.

    Anyways this whole story really came out around 2003 2004 and court cases were final in 2006-7 this is when the public found about the defaulters. To make sure this did not happen again Banks had to raise their capital and all of the commercial banks had to go public.

    All of this lead combined with the GFC and the Maoist insurgency caused 2008. Basically Nepal had it’s own financial crisis thereafter IMF/world bank one of them suggested NRB to make banks increase capital and the aftermath to all is where the article starts.

    Here is the list of Nepal Bank defaulters if you want to see, weird website but all of it is true:
    https://everestuncensored.org/evils-of-the-nation-top-ten-defaulters-uncovered/

    2016 was also due to GFC, Similar to 2008 it started with IMF/World Bank suggesting NRB to take up certain strategies, This time around it was Basel III (A international regulatory accord) in which Central banks made commercial banks to maintain a much larger capital base, increase transparency and improve liquidity (3 pillars). Again don’t know if IMF or world bank suggested this to NRB, I am not a nerd.

    Right shares, FPO and bonus came and caused a big artificial pump and a big dump in the stock market which fucked a lot of investors. “Expert” Investors thought the problem would only stay in banking sector with other sectors hoped to improve but was all fucked everyone got fucked in 2016. I am one of these “experts” hai haha almost lost half my money back then, good times.

    Even lost money in banks People don’t know the pain of getting bonus shares of a company whose stock price is dumping, watch your money disappear but now quickly.

    All of this while there was high inflation in the country ie stagflation, unless you were entirely in Fixed deposits and Land or had your own business- you lost money; either to the stock market or to inflation. Even if you made a salary you were losing to inflation its was fucked that no one really gave a fuck. Look at USA right now everyone there is worried about the same situation we lived through, People here don’t even know they were hit. Nepal is crazy.

    About five years later we are here this time i was smart i did everything right jumped in and out of stocks at the right time and sold almost all of it near the top somehow. Now I am chilling while market is trying to figure out where its all heading.

    Most stocks are going to drop down hard because most stock are wayyyyyy to high, many here talk like PE does not matter.

    I have seen so many talk like yeah broo PE high huda kei hunna future ma profits badcha it’ll be ok, Blue chip ho kindue yeti price ma feri kinna pauna, long term ma… etc etc,

    no no, haat it’s not what you own that matters it’s when you bought it that does

    If you are paying Rs.100 for a stock with PE of 10, If everything goes to plan you’ll get your ROI in 10 years.

    Now if the PE is 100+ and you are buying on margin. well…not great.

    Read that again, do the calculations, if it didn’t make sense and you disagree then your fucked you just don’t know it yet.

    This turned into more of a rant, just annoyed by somethings i have been seeing in the news/socials these days.

    Edit: found some articles for those who want to know more about Nepal banks collapse I guess most here don’t know about what happened.

    http://archive.nepalitimes.com/news.php?id=10996#.YXV3-J5ByUk

    http://archive.nepalitimes.com/news.php?id=8287#.YXV39Z5ByUk

    Craig McAllister former ceo nepal bank interview

    http://archive.nepalitimes.com/news.php?id=4809#.YXV3PJ5ByUk

  2. I think history is going to repeat itself. We are in a housing/land bubble waiting to burst fueled by easy money and funny money

  3. Awesome ????
    Thanks ????
    Enjoyed reading it thoroughly
    To the point. Well researched, well written. Must read for all investors. Especially your reference to Vibor Bikas Bank (VBB). Many have forgotten the debacle that happened there.

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