Since the declaration of Federal Democratic Republic of Nepal in 28 May 2008, we have seen 11 governments with 9 different Prime Ministers including an interim one. As stock market index is considered to be an indicator of investors’ confidence upon government policies, we look into how NEPSE index has moved during those 11 different governments.
Post May 28, 2008 Girija Prasad Koirala held PM position for 82 days during which NEPSE crossed 1000 mark for the second time in its history. Post Girija’s tenure, the market slumped down from 1075.9 to 337.2 over the period of 3 years forming 3 different governments under PMs Pushpa Kamal Dahal, Madhav Kumar Nepal and Jhalanath Khanal. It was their maiden term as the Prime Minister. Looking at the percentage change, market suffered the most during the tenure of Madhav Kumar Nepal (-42%) while index reached lowest (292.3) during Jhalanath’s term.
(Numbers inside column chart shows points change between open and close index during each PM’s tenure)
However, the market turned green when Baburam Bhattarai sworn as PM and it continued its bull run for another four years. The index grew the most (+ 61.6%) during Baburam’s term gaining 208.1 points. Index crossed 1000 mark again during Sushil Koirala’s term while gained maximum points (678.6) during KP Sharma Oli’s administration.
Next three governments brought no good for the investors as the market slumped down continuously, losing more than 170 points each time. Market fell during both two tenures of Pushpa Kamal Dahal while that of KP Sharma Oli has seen one up and one down (till now).
In these 11 years, the country went through a phase wherein we had failed constituent assembly, earthquake and undeclared Indian blockade. Many intermittent governments were formed and toppled. Investors may have had low expectations from such governments to reform capital market. But in the present context, with a stable government in place, investors’ expectation from the authority and regulatory bodies has escalated to a new level. But has this government stood up to the expectation? Reduced NEPSE index gives us the clear answer.