NEPSE 2016: A Year In Review

Nepal Stock Exchange went through numerous ups and downs in 2016. While it went mostly up, it has been in a bearish mood lately. It opened at 1151.38 points on the first day of 2016 and closed positively at 1443.38 on the last trading day of 2016 on December 29, a growth of 25.36%. It also reached the highest point of 1881.45 on July 27.

NEPSE signals positive growth

A 5-year trend comparison of the NEPSE index signals a positive growth. Prices of major companies have come down to the values when the NEPSE index was just at 1100 points. This means that the prices of these companies will further increase, and this might be a good time for new investors to enter into the market safely. The year-on-year growths of market indices are presented below:  

Index measuring development banks has risen the highest by 40.42%, while Hydropower has plunged 11.04%

Charm in commercial banks seems to have been shifted to development banks. The sub-index measuring development banks increased by 40.42% while the commercial bank rose by 30.50%. Hotels, Finance, Insurance and Manufacturing & Production all posted a positive growth while Hydropower plunged a further 11%. 2015 was also not a good year for hydropower with only Sanima Hydropower reporting a positive growth in market price. Similarly, Trading and Others sector also decreased slightly in 2016. A number of hydropower companies are coming up with IPOs. Api Power is expanding by developing solar power projects and building one more hydropower project. One of the most anticipated hydropower companies, Upper Tamakoshi, has yet to float IPO for the general public – which should increase attraction towards hydropower sector.

Central Depository System came into full-fledged operation in 2016

Although the implementation of CDS was done in 2015, it came into a full operation in 2016. Central Depository System made it possible to transfer the ownership of shares within 4 days instead of 2-3 months. High turnovers of almost Rs. 3 billion were possible only because of CDS.

Heading into 2017

The first trading day of 2017 closed on a positive note. Number of improvements in the stock market are in pipeline for 2017. ASBA system and online trading system will immensely help investors which are going to attract more investors and NRNs in the stock market. Brokers have also reacted positively to decentralize the secondary market and open branch offices throughout the nation, which will further benefit the industry. If the regulatory authorities are able to make better decisions for the betterment of the investors and the industry, the market is sure to reach new heights in 2017 as well.