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Factors Affecting Share Market in Nepal

As a matter of fact, with correct analysis, we can gain profit from the share market with comparatively less loss. Similarly, investing without proper knowledge, study and research can lead to maximum risk in the business. In this article, you will find what are the factors affecting share market in Nepal.

Definitely, share market is trending these days. Everyone wants to know about the share market.

In the first place, the share market can be a full-time income or part-time income for us. However, it requires patience, control of emotions and sentiments, and fundamental and technical analysis about the companies. 

Find here Some Basic Terms used in the Share Market

We know that the share market is directly related to the country’s economy and condition.

Now, let’s discuss factors affecting the Nepalese share market in brief. So, here are some of the factors that affect the share market.

Here are some Factors Affecting Share Market in Nepal

Economic condition; in terms of Share Market in Nepal

The economic condition of a country is directly related to the share market. Good economic condition resembles a better share market while a bad economy shows a bad trend in the share market.

Change in the political situation- Nepalese Share Market

Likewise, change in the political situation also directly influences the share market. Simple changes in Political situations also affect the share market. For instance, we all know when the Parliament was dissolved in Nepal; the share market went down for a few days. Therefore, from this example too, we can assume how political changes affect the share market.

Interest Rate – Impact on Share Market Nepal

When the interest rate of banks is high, fewer investors are attracted to the share market. However, when the interest rate of a bank is low, then investors are highly attracted to the share market. So, the interest rates of banks also affect the share market.

How is the trend of Share Market in Nepal? Click here to know more.

Liquidity – in terms of Share Market in Nepal

Liquidity also affects the share market. If the liquidity of shares is higher than that of lands, buildings, or any other assets then many investors are attracted to the share market. Liquidity in the share market is very high. Investors can easily convert their shares or stocks into cash whenever he/she wants.

News and Rumors – Impact on Nepalese Share Market

Next up, news and rumors are also major factors affecting the share market. Likewise, news and rumors about share price, share market in T.V., radio, newspaper, and also social media. Fake and false news in the market directly affects the share market permanently.

Inflation – Affecting Share Market in Nepal

An increase in inflation increases investors in the share market. In contrast, a decrease in inflation decreases investors in the share market. So, inflation also directly influences the share market.

Find here the Top Brokerage Firms in Nepal

Dividend – Effect on Share Market

A dividend is a certain part of the profit paid by a company to its shareholders. Dividend also influences the share market highly. If any company is performing well and giving dividends, then, in that case, investors will be directly attracted to the share market.

Whenever someone has shares of a certain company, a certain proportion of profit is divided to shareholders annually. This also attracts and develops an interest in new investors to invest in the share market.

Disaster/Calamities – Impact on Share Market

Disaster or calamities are also factors that affect the share market. Whenever any disaster occurs, more than other industries, the share market is affected the most. In addition, it affects the new entrepreneurs. Consequently, more investors show their interest in the share market. For instance, during the COVID-19 pandemic, the share market was in a bullish trend.

Image Source: Sharesansar.com

Policies and laws in the share market – in terms of Share Market Nepal

Different new laws and policies also affect the share market. Rules and laws by the government affect the share market temporarily or permanently. While rules like circuit limit, T3 and T2, the monetary policies of Nepal Rastra Bank, etc. 

These were factors affecting the share market. Traders can now analyze companies they want to invest in more easily and faster.

Moreover, the share market index is also now improving compared to the past.

Click here to know the Basic Mechanism of Share Market

Reasons Youths are attracted towards Share market in Nepal

Equally important, the share market is attracting more and more youths these days. Some of the reasons for this are:

Easy Entry and Easy Exit

A share market is very easy to enter and easy to exit. There are not any barriers in the market to enter and exit. One can simply enter the share market by creating a bank account, Demat Account, Customer Reference Number (CRN), and a broker account easily whenever they want. Moreover, they can exit anytime they want by simply converting their stocks into cash.

Diversification

The share market has the feature of diversification. One can invest in any industry he/she likes. They can invest in insurance, banks, the tourism industry, hydro powers, finance, or manufacturing industries. One can simply cover their losses from one industry by collecting profit from another sector.

High Return

As a matter of fact, Every market and business has risks, we all know that. But in the share market with risk, there is a very high return of profit. This is attracting new investors to invest in stocks.

A Step-Wise Guide on How to Register a Business/Company in Nepal

These reasons are attracting many youths and new investors to the share market. New investors have a question in their mind that “Is the share market a good opportunity to earn?” the answer is YES.

On the End Note…

A share market can be a good opportunity to earn. With better knowledge and research about the market, one can benefit from the share market. Nevertheless, there are some risks as well.

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