Stocks - Nepal

  • Nepal
  • In Nepal, the market capitalization in the Stock market is projected to reach US$6.06bn in 2025.
  • It is expected to exhibit an annual growth rate (CAGR 2025-2026) of 6.60%, resulting in a projected total amount of US$6.46bn by 2026.
  • The market volume in the Stock market in Nepal amounts to US$178.10m in 2025.
  • From a global comparison perspective, it is noted that the highest market capitalization is achieved the United States, with US$54,880.0bn in 2025.
  • In the Stock market of Nepal, the number of trades is anticipated to amount to US$1.52m by 2026.
  • Nepal's stock market is witnessing increased investor interest, driven by optimism around government reforms and the potential for economic growth.
 
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Analyst Opinion

The Stocks Market in Nepal has shown negligible growth, influenced by factors such as limited investor participation, lack of financial literacy, and regulatory challenges. Additionally, economic instability and political uncertainties further impede market expansion and investor confidence.

Customer preferences:
Investors in Nepal are increasingly gravitating towards sustainable and socially responsible investment opportunities, reflecting a growing awareness of environmental and social issues. This trend is particularly prominent among younger demographics, who prioritize companies with ethical practices and a positive community impact. Additionally, the rise of digital platforms for trading has made stock market participation more accessible, fostering a new generation of tech-savvy investors eager to explore diverse investment avenues despite existing market challenges.

Trends in the market:
In Nepal, the stock market is experiencing a notable shift towards sustainable investments, with a growing number of investors prioritizing companies that demonstrate environmental responsibility and social impact. This trend is particularly evident among younger investors, who are increasingly leveraging digital trading platforms to engage with the market. As accessibility improves, these tech-savvy individuals are diversifying their portfolios while advocating for corporate transparency and ethical practices. This evolution signifies a potential shift in the investment landscape, compelling industry stakeholders to adapt their strategies to align with these emerging values.

Local special circumstances:
In Nepal, the stock market is influenced by unique geographical and cultural factors, including a strong emphasis on community and collective well-being. The mountainous terrain limits access to traditional financial services, prompting a rise in digital trading platforms that cater to remote investors. Additionally, cultural values prioritize sustainable practices, leading to increased interest in companies committed to social and environmental responsibility. Regulatory frameworks are evolving to support this shift, encouraging ethical investment strategies and fostering a more inclusive market environment, distinct from global trends.

Underlying macroeconomic factors:
The performance of Nepal's stock market is significantly shaped by overarching macroeconomic factors such as economic stability, inflation rates, and foreign investment trends. Nepal's national economic health, characterized by steady GDP growth and remittances, bolsters investor confidence, while inflation control is crucial for maintaining purchasing power. Fiscal policies promoting infrastructure development and investment incentives further enhance market attractiveness. Additionally, global economic trends, such as commodity price fluctuations and geopolitical dynamics, impact investor sentiment and capital flows. The interplay of these factors creates a unique investment landscape that distinguishes Nepal's stock market from other emerging markets.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on market capitalization/ market volume/ number of trades/ number of listed domestic companies data within the stock market.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data from Company Insights, World Bank, the Federation of Exchanges as well as stock exchanges, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer price index (CPI), total investment (% of GDP), trade (% of GDP), household income, internet penetration, deposit interest rate, lending interest rate, central bank interest rate, unemployment rate, internet penetration and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In the market, we use both the HOLT-damped Trend method and the ARIMA method to forecast future development. The main drivers are GDP per capita, consumer price index (CPI), and central bank interest rate. The scenario analysis is based on a Monte Carlo simulation approach generating a range of possible outcomes by creating random variations in forecasted data points, based on assumptions about potential fluctuations in future values. By running numerous simulated scenarios, the model provides an estimated distribution of results, allowing for an analysis of likely ranges and confidence intervals around the forecast.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

Overview

  • Market Capitalization
  • Market Volume
  • Number of Trades
  • Number of Listed Domestic Companies
  • Distribution of Market Capitalization
  • Analyst Opinion
  • Methodology
  • Key Market Indicators
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