From Rigid Stance to Liberal: Capital Market gains Political Priority

It was in 2008 when Dr Baburam Bhattarai, serving finance minister under the leadership of his party chair Pushpa Kamal Dahal “Prachanda”, called the stock market a “gambling house”, causing the market to fall sharply in a V-shape to as low as to 292 points.

Dr Bhattarai represented the then CPN (Maoist), which had emerged as the largest party in 2008 polls, transitioning from the decade-long insurgency to mainstream politics and government leadership. Coming from a hardline Marxist-Leninist background, he considered the stock market as “unproductive” and “speculative”.

However, later in 2009, he softened his stance, assuring that the government was committed to developing the capital market. This softened remark pushed the market upward.

Now, fully shifting his earlier firm rhetoric, the Pragatisheel Loktantrik Party, with which Dr Bhattarai is currently associated, has emphasised the scientific development of the capital market in its manifesto for the March 5 election.

Unlike in the previous elections, many parties -including the major Nepali Congress, CPN-UML and Rastriya Swatantra Party, have highly prioritised the stock market, targeting the upcoming polls.

Previously, parties often viewed the market with skepticism or treated it as a minor part of the financial sector. Now, they have accorded high priority to the market, recognising it as a national financial pillar and a primary economic engine.

In their March 5 poll manifestos, proposals range from restructuring the Nepal Stock Exchange (NEPSE) and making the Securities Board of Nepal (SEBON) fully accountable and empowered to introducing new financial instruments and attracting Non-Resident Nepali investors.

The radical shift among major political parties, analysts observe, is natural with the growing number of market participants. With increasing public interest in the stock market, parties are, to some extent, forced to prioritise the sector.  

During every election, parties seek to consolidate strong vote banks. The rapidly expanding base of market participants could serve as a significant electoral constituency, they say.  

According to the CDS and Clearing Limited (CDSC), as of the first week of December, 2025, the total number of demat accounts surpassed 72 lakh, up from approximately 69 lakh in June 2025. The number of Meroshare users stand at around 63 lakh. Similarly, out of over 45 lakh TMS users, 27 lakh are actively trading.

Chartered accountant and stock market analyst Manish Aryal said the shift in leadership from older guards to a younger and more financially literate new generation, who are more financial literate, has contributed to a more liberal stance towards the capital market.  

“Currently, the younger generation dominates the market. As a result, political leadership is strategically adjusting its stance towards the capital market.”

He noted that political parties are under pressure to retain and expand their vote banks, especially as the number of market participants is rapidly growing.

Countering rhetoric that labels the market as a “gambling den”, he describes the market as a strong pillar of the national economy. He urged authorities to have a positive outlook towards the capital market and refrain from underplaying it.

 “In fact, the market is not a game to play. It is a major source of investments, financial growth and capital mobilisation,” he says.  

Investment strategies have also shifted over time. In 2017, there was a strong priority on attracting investors to the hydropower sector. For the March 5 elections, the focus appears to have expanded to the real estate such as manufacturing, IT and tourism.

“Overall, growing financial literacy and awareness of the capital market among political leadership is good for the holistic development of the market,” Aryal says, adding that such awareness could lead to favourable policies and strong regulatory frameworks.

He however pointed out that political intervention in regulatory bodies have limited their autonomy and reform capacity, which he said would have negative impact on the overall market growth.

He called for strict measures in controlling such political intervention.