Tell me about market crisis in Nepal share market,how to tackle
As of 2025-09-19:
Nepal’s share market is currently facing a significant crisis due to political instability and social unrest predominantly driven by Gen Z protests. Below are the key factors and events related to this situation:
Key Events and Impacts
- Gen Z Protests: These erupted in early September 2025, largely due to a government-imposed social media ban and frustration over corruption and economic disparities. The widespread demonstrations culminated in the resignation of Prime Minister K.P. Sharma Oli.
- Trading Halts and Market Closure: To protect market integrity amidst instability, the Nepal Stock Exchange (NEPSE) suspended trading multiple times. The market was last closed on September 18th due to a sharp 6% decline in the benchmark index, and is expected to stay shut until September 21st.
- Economic Consequences: The crisis has disrupted normal economic activities, hurt business confidence, and raised significant concerns about Nepal’s economic outlook, as noted by Fitch Ratings.
Factors Contributing to the Crisis
- Political Instability: The political turmoil, induced by protests and the change in government, has created uncertainty and diminished investor confidence.
- Economic Issues: Persistent issues such as corruption and income inequality have been exacerbated by the current political crisis.
- Market Sentiment: The political events have prompted fragile market sentiment, sharply impacting Nepal’s capital markets.
Potential Path Forward
- Government Reforms and Stability: Restoring political stability and addressing the root causes of the protests will be crucial for investor confidence.
- Economic Recovery Measures: Proactive policies for economic recovery are essential, including measures to boost the tourism sector disrupted by the unrest.
- Long-Term Outlook: Despite short-term setbacks, long-term prospects remain hopeful in sectors like hydropower and remittances, provided foundational issues are tackled.
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