Nepal Stock Market Turnover Falls 53% in First Two Months of FY 2083/84

Nepal Stock Market Trading Falls to Rs. 181.45 Billion

Nepal's secondary stock market has experienced a significant decline in trading activity during the first two months of fiscal year 2083/84. Total securities transactions reached approximately Rs. 181.45 billion between mid-July and mid-September, compared with Rs. 386.74 billion during the same period of the previous fiscal year.

The figures represent a 53.1% year-on-year decline in total stock market turnover, highlighting a substantial slowdown in trading activity across several major sectors of the Nepal Stock Exchange (NEPSE).

The decline in turnover provides an important indicator of market participation and investor activity. However, lower trading volume alone does not establish whether share prices will rise or fall in the coming months.

Nepal Stock Market Turnover: Key Statistics

• Total turnover in FY 2083/84: Rs. 181.45 billion
• Total turnover in the comparable period of FY 2082/83: Rs. 386.74 billion
• Year-on-year decline: Approximately 53.1%
• Highest-turnover sector: Hydropower
• Notable increase: Debt securities trading

These figures indicate that trading activity weakened across much of the market, although the performance varied considerably between sectors.

Sector-Wise Stock Market Trading Analysis

1. Hydropower Sector Remains the Largest by Turnover

Hydropower companies recorded approximately Rs. 86.06 billion in transactions during the first two months of FY 2083/84, making the sector the largest contributor to total market turnover.

However, hydropower turnover declined from approximately Rs. 140.03 billion in the corresponding period of the previous fiscal year, representing a decrease of around 38.5%.

Despite the reduction, hydropower stocks continued to account for a substantial share of Nepal's secondary market activity. Investors should examine individual companies' earnings, debt levels, project progress, valuations and technical indicators before making investment decisions.

2. Manufacturing and Processing Sector

The manufacturing and processing sector recorded approximately Rs. 23.51 billion in trading turnover, down from Rs. 29.80 billion in the same period last year.

This decline suggests reduced trading activity in the sector. Investors evaluating manufacturing companies can compare revenue growth, operating margins, earnings per share and price-to-earnings ratios alongside market trends.

3. Commercial Banks See Lower Trading Activity

Commercial bank stocks recorded turnover of approximately Rs. 20.20 billion during the first two months of the current fiscal year, compared with Rs. 37.88 billion in the previous year's corresponding period.

Banking stocks are often assessed using indicators such as earnings per share (EPS), net worth per share, non-performing loans, capital adequacy and dividend history. Lower turnover does not necessarily mean that every commercial bank stock has weakened fundamentally.

4. Microfinance Sector Records a Sharp Decline

Microfinance companies experienced one of the steepest contractions in trading activity. Turnover fell from approximately Rs. 36.72 billion to Rs. 6.19 billion, a decline of about 83%.

Investors analysing microfinance stocks should pay particular attention to loan recovery, non-performing loans, provisioning, profitability and regulatory developments. Price movements should be evaluated alongside these fundamental factors.

5. Development Banks and Insurance Companies

Development bank turnover declined from approximately Rs. 34.48 billion to Rs. 10.68 billion.

Life insurance turnover fell from around Rs. 12.95 billion to Rs. 3.57 billion, while non-life insurance turnover declined from approximately Rs. 8.09 billion to Rs. 2.33 billion.

These figures show that the reduction in market activity was not limited to one sector. Investors can use both fundamental analysis and technical analysis to assess the strength, valuation and trading behaviour of individual companies.

6. Investment Sector Turnover Also Declines

The investment sector recorded approximately Rs. 8.29 billion in turnover, compared with Rs. 20.25 billion in the same period last year.

Investors should distinguish between reduced trading activity and changes in the underlying value of investment companies. Portfolio holdings, net asset value, earnings and market price relative to book value may all be relevant to company analysis.

7. Debt Securities Trading Rises Sharply

While turnover declined in most major equity sectors, debt securities recorded a significant increase.

Trading in debt securities rose from approximately Rs. 326.5 million to Rs. 2.51 billion, an increase of roughly 670%.

This growth contrasts with the wider decline in share-market transactions. However, the increase in debt securities turnover should not automatically be interpreted as evidence that investors are broadly shifting away from equities; additional information would be needed to establish the reasons behind the change.

What Does Lower NEPSE Turnover Mean for Investors?

Market turnover measures the total value of securities traded during a particular period. It helps investors assess market activity, liquidity and participation.

A sustained decline in turnover may have several implications:

• Reduced market participation: Fewer or smaller transactions may indicate lower trading activity.
• Liquidity considerations: Some shares may become harder to buy or sell at desired prices without affecting the market price.
• Sector-specific opportunities: Individual companies can perform differently even when overall turnover falls.
• Greater importance of selectivity: Investors may benefit from comparing company fundamentals, valuations and trading patterns rather than relying solely on market sentiment.

Turnover should be considered alongside the NEPSE index, market breadth, price-volume relationships, broker activity and company-specific announcements.

How Technical Analysis Can Help NEPSE Investors

Technical analysis can help investors study price movements, identify potential support and resistance zones, and assess market momentum. It cannot guarantee future price direction, but it can provide a structured framework for evaluating trading opportunities.

Useful tools include:

• Support and resistance: Identify price areas where buying or selling pressure may emerge.
• Moving averages: Assess short-term and long-term price trends.
• Relative Strength Index (RSI): Evaluate momentum and possible overbought or oversold conditions.
• MACD: Study momentum shifts and potential trend changes.
• Volume analysis: Examine whether trading activity supports a price movement.
• Risk management: Establish entry conditions, stop-loss levels and position sizes before trading.

Investors seeking to strengthen their skills can explore the Technical Analysis Course in Nepal and learn more about share market training in Nepal.

Learn NEPSE Technical Analysis with Sarbaguna

Understanding turnover, price trends and market indicators can help investors make more disciplined decisions. Sarbaguna provides stock-market education for individuals interested in learning technical analysis, chart reading and trading risk management.

For information about a Technical Analysis Course in Nepal, contact Deep Thapa.

Call or WhatsApp: 9849290806

Learning technical analysis can improve your understanding of market behaviour, but no course, indicator or trading strategy can guarantee profits. Always assess risk before investing in Nepal's stock market.

Conclusion

Nepal's stock market recorded approximately Rs. 181.45 billion in turnover during the first two months of FY 2083/84, down 53.1% from the same period of the previous fiscal year. Hydropower remained the largest sector by turnover, while microfinance, development banks, commercial banks and insurance companies experienced substantial declines in trading activity.

Debt securities moved in the opposite direction, recording a sharp increase in turnover. Going forward, investors should monitor market liquidity, sector performance, company fundamentals and technical signals together rather than treating turnover figures as a standalone buy or sell indicator.

Disclaimer: This article is for educational and informational purposes only. It is not a recommendation to buy or sell any security. Investors should conduct their own research and consider their risk tolerance before making investment decisions.

Frequently Asked Questions (FAQ)

1. How much did Nepal's stock market turnover decline in FY 2083/84?

Total securities turnover declined by approximately 53.1% year-on-year to Rs. 181.45 billion during the first two months of FY 2083/84.

2. Which sector recorded the highest turnover in Nepal's stock market?

The hydropower sector recorded the highest turnover, at approximately Rs. 86.06 billion during the first two months of FY 2083/84.

3. Which sector experienced the sharpest decline in turnover?

The microfinance sector recorded a particularly sharp decline, with turnover falling by approximately 83% compared with the same period of the previous fiscal year.

4. Did debt securities trading increase?

Yes. Debt securities turnover increased from approximately Rs. 326.5 million to Rs. 2.51 billion, representing an increase of roughly 670%.

5. Does declining stock market turnover mean NEPSE will fall?

Not necessarily. Lower turnover indicates reduced trading activity, but the direction of the market depends on multiple factors, including demand and supply, company earnings, economic conditions, investor sentiment and price trends.

6. How can investors analyse the Nepal stock market?

Investors can combine fundamental analysis with technical tools such as support and resistance, RSI, moving averages, MACD and volume analysis. Risk management and independent research are also essential.

7. Where can I learn technical analysis in Nepal?

You can explore stock-market education through Sarbaguna and enquire about the Technical Analysis Course in Nepal by contacting Deep Thapa at 9849290806 via call or WhatsApp.