Situated between the two major powers of India and China, Nepal strives to maintain a balanced foreign policy to preserve its independence. The country's geopolitical significance is underscored by its ability to manage critical natural resources and maintain regional stability. Its location ensures it will remain a focal point in South Asian geopolitics, making its political and diplomatic decisions impactful far beyond its borders.
Brief Outlook on Nepal’s Economy
The future outlook for Nepal remains positive. Nepal’s real GDP growth is around 3.9 percent in FY2024, which increased from 2 percent in FY2023 and is expected to accelerate to 5.1 percent in FY25 and 5.5 percent in FY26, according to the World Bank Website.
Tourism, hydropower, and remittance inflows will remain major drivers of the economy in the future. Nepal Rastra Bank’s accommodative monetary policies and relaxed regulations are expected to encourage private investments in the country.
However, the country's major drawbacks are its lack of infrastructure, dependence on Indian ports, and poor accessibility.
MarketVector’s Standpoint on Nepal Equities
MarketVector’s global view includes exploring opportunities in the Nepal stock market. The state-owned Nepal Stock Exchange (NEPSE) is the only exchange in the country offering a trading platform for investors. The NEPSE demonstrates remarkable liquidity for a frontier market, with several companies achieving average daily trading volumes exceeding USD 1 million and the exchange maintaining a market capitalization of more than USD 30 billion. While this liquidity strengthens our investment case, it is worth noting that the market remains largely overlooked by major data vendors.
As of January 1, 2025, NEPSE has 244 listed companies, representing various sectors including banking and financial services, hydropower, manufacturing, hotels, and tourism.
Based on NEPSE's volume and trading data, we selected the most liquid and investable companies listed in the country's only stock exchange. The MarketVectorTM Total Global Equity Index (MVTGLE) includes companies like Himalayan Reinsurance Limited, Himalayan Distillery Limited, and Shivam Cements, which have the largest average daily trading volume and market capitalization.
Relative Price Performance Using Rebased Figures
Source: Nepal Stock Exchange (NEPSE).
The chart includes our selection of stocks in the Nepal universe. While the NEPSE Index shows a 22% return over the time period, the biggest IPO in the country, Himalayan Reinsurance, has shown an 84% return in the same time period.1,2
The MarketVectorTM Total Global Equity Index (MVTGLE) aims to provide comprehensive market insights to explore new investment opportunities.
Source1: The base date is January 8, 2024, the listing date of Himalayan Reinsurance.
Sounrce2: Stock prices are rebased to 100.
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Author: The MarketVector Team.
For informational and advertising purposes only. The views and opinions expressed are those of the authors but not necessarily those of MarketVector Indexes GmbH. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements herein may constitute projections, forecasts, and other forward-looking statements that do not reflect actual results. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. MarketVector Indexes GmbH does not sponsor, endorse, sell, promote, or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. Including security within an index is not a recommendation by MarketVector Indexes GmbH to buy, sell, or hold such security, nor is it considered investment advice.