The Nepal Stock Exchange (NEPSE), located in the heart of Kathmandu, is the only stock exchange in the country. It was established in 1983 and began operations in 1986. The NEPSE is a member of the South Asian Federation of Exchanges (SAFE) and the Asia and Pacific Federation of Exchanges (APFE), as well as the World Federation of Exchanges (WFE).
The NEPSE is home to over 200 listed companies, spanning various sectors of the Nepalese economy such as banking, finance, insurance, hydropower, and manufacturing. The market capitalization of the NEPSE as of 2021 is around NPR 1.5 Trillion.
Investors in Nepal can participate in the stock market through various means, such as opening a Demat account, buying shares directly from the company, or through stockbrokers. The Securities Board of Nepal regulates the stock market.
Despite being a small market, the NEPSE has been performing well recently, with the Nepal Stock Exchange Index (NEPSE) reaching an all-time high of 2,314.96 in 2020. However, as with any stock market, it is subject to fluctuations and market risks. Investors are advised to conduct thorough research and consult with financial advisors before making any investment decisions.
In recent years, the government of Nepal has been working to improve the overall investment climate and the stock market. Efforts have been made to make it easier to start a business and to improve infrastructure. Additionally, the government has been working to improve the stock market’s overall transparency and increase the number of listed companies.
Although the potential for growth as Nepal’s economy continues to develop, there are still challenges to be addressed such as lack of liquidity, lack of investor education, and lack of proper regulation.
Overall, the Nepalese stock market is a small but growing market with a lot of potentials. Investors who are willing to take on some risk and do their due diligence may find it to be a worthwhile investment opportunity.
When does NEPSE open?
As of June 15, 2022, the Nepal Stock Exchange (NEPSE) is open from 11 am to 3 pm from Sunday to Thursday. Meanwhile, the market will remain open from 11 am to 1 pm on Friday.
Technical Analysis of NEPSE
Technical analysis is a method used to evaluate securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts believe that the historical performance of a security, as well as market trends and indicators, can be used to predict its future performance.
The Nepal Stock Exchange (NEPSE) Index is a stock market index that measures the performance of the Nepalese stock market. The index is calculated based on the market capitalization of all listed companies on the exchange, and is considered a key indicator of the overall performance of the Nepalese economy.
One technical indicator commonly used to analyze the NEPSE is the moving average. A moving average is a trend-following indicator that calculates the average price of a security over a certain period of time, such as 50 days or 200 days. By analyzing the relationship between the current price and the moving average, investors can determine whether a stock is in an uptrend, downtrend, or neutral trend.
Another popular technical indicator is the Relative Strength Index (RSI). The RSI is a momentum indicator that compares the magnitude of recent gains to recent losses in order to determine overbought and oversold conditions. A stock is considered overbought when the RSI is above 70 and oversold when it is below 30.
Bollinger Bands is also a popular technique which is used to determine overbought and oversold conditions. Bollinger Bands are lines plotted two standard deviations away from a simple moving average. The bands automatically widen when volatility increases and narrow when volatility decreases.
Additionally, the Fibonacci retracement is a popular technical analysis tool that is used to identify levels of support and resistance. By identifying these key levels, traders can make more informed decisions about when to enter or exit a trade.
In conclusion, Technical analysis is a popular method used by investors to evaluate securities, including the NEPSE index. By analyzing historical performance, market trends, and indicators such as moving averages, RSI, and Fibonacci retracement, traders can make more informed decisions about when to buy or sell a security. However, it is important to note that technical analysis should not be used in isolation and should be combined with fundamental analysis to make a better investment decision.
Fundamental Analysis of NEPSE
Fundamental analysis is a method used to evaluate securities by analyzing the financial and economic factors that affect a company’s performance. The goal of fundamental analysis is to determine the intrinsic value of a security, which is the value that is inherent in the company’s assets, earnings, and growth potential.
When it comes to analyzing the Nepal Stock Exchange (NEPSE) Index, fundamental analysis involves analyzing the financial and economic factors that affect the performance of the Nepalese economy. This includes analyzing the performance of individual companies that are listed on the exchange, as well as broader macroeconomic factors such as GDP growth, inflation, and interest rates.
One important aspect of fundamental analysis is analyzing a company’s financial statements. This includes the balance sheet, income statement, and cash flow statement. By analyzing these statements, investors can gain insight into a company’s revenue, profits, and growth potential. Additionally, investors can analyze a company’s valuation metrics such as the price-to-earnings ratio (P/E) and the price-to-book ratio (P/B) to determine if a stock is overvalued or undervalued.
Another important aspect of fundamental analysis is analyzing a company’s management and industry trends. By understanding a company’s management team, investors can gain insight into their vision, goals, and overall strategy for the company. Additionally, by analyzing industry trends, investors can determine if a company is well-positioned for growth in the future.
In addition to analyzing individual companies, it is also important to consider broader macroeconomic factors that can affect the performance of the Nepalese economy. For example, GDP growth, inflation, and interest rates can all have a significant impact on the performance of the stock market. Additionally, political stability and government policies can also affect the performance of the Nepalese economy and the NEPSE index.
In conclusion, fundamental analysis is a powerful tool for evaluating securities, including the NEPSE index. By analyzing the financial and economic factors that affect the performance of individual companies and the Nepalese economy, investors can gain insight into a company’s intrinsic value and make more informed investment decisions. However, it is important to note that fundamental analysis should not be used in isolation and should be combined with technical analysis to make a better investment decision.