The NEPSE Data Handbook — Historical Almanac

First published 26 Aug 2026 · Last verified 29 Aug 2026

The NEPSE Data Handbook — Historical Almanac

Sunita Koirala keeps a single laminated sheet taped inside the cabinet door beside her desk in Kathmandu. On one side is a hand-drawn timeline of the NEPSE index going back to 2015, with arrows and dates scrawled in three colours of pen. On the other side is a small table of P/E ranges by sector, a column of AGM months, and a short list of regulatory changes she has lived through as an investor — the kind of changes that, at the time, felt like footnotes, and only years later revealed themselves as turning points. She built the sheet slowly, one correction and one recovery at a time, and she updates it every year using the same data pipeline described in Chapter 105. She does not read it the way she reads a book. She glances at it the way a sailor glances at a tide table — not for excitement, but to know roughly where she stands before deciding what to do next.

This chapter is that sheet, expanded into a full reference. It is not meant to be read once and shelved. It is meant to be returned to — before you buy into a rally that feels unprecedented, before you panic in a correction that feels like the end of the market, before AGM season, before a rights issue, before you assume a regulation you remember is still in force. Everything in this chapter should be treated as a set of approximate, illustrative ranges that build intuition for how the Nepali market has behaved historically — not as precise figures to bet on, and not as a forecast of what must happen again. Markets rhyme. They do not repeat exactly, and NEPSE's history is short enough, and its regulatory environment fluid enough, that yesterday's exact numbers are less useful than the underlying mechanics that produced them. Those mechanics — credit cycles and liquidity regimes — are what this chapter keeps coming back to, because they are what actually explain NEPSE's major swings, far more than any single company's earnings ever did.

Lesson 106.1 — The Shape of NEPSE's Cycles: Four Eras in Plain English

If you have read Chapters 0.1 through 0.3 and Chapter 11, you already know the core argument of this book: Nepal's stock market is, more than almost any comparable market in the region, a liquidity market before it is an earnings market. Share prices in Nepal move less because companies suddenly become more or less profitable, and more because the banking system's capacity and willingness to lend expands or contracts, because deposit growth outruns or falls behind credit growth, because interest rates rise or fall, and because margin lending amplifies whatever the underlying liquidity trend already is. NEPSE's history since the mid-2010s is, in effect, a case study in that argument playing out four times.

The first era is the 2016 rally and its peak. In the years leading up to it, the banking system was flush with liquidity, deposit growth was strong, and interest rates were low. Credit was cheap and available, and margin lending — loans taken against listed shares as collateral — expanded quickly. Retail investors could borrow against an existing portfolio to buy more shares, and as prices rose, the value of the collateral rose too, which allowed still more borrowing. This is the leverage spiral described in Chapter 11: rising prices create more borrowing capacity, more borrowing capacity buys more shares, and more buying pushes prices higher still. Add to that a general mood of post-earthquake reconstruction optimism and renewed confidence in the banking and hydropower sectors, and NEPSE ran hard through 2015 and into 2016, approaching and briefly touching levels in the high 1,800s on the index — treat that specific number as an illustrative approximation of where the peak sat, not a verified constant, and check the primary NEPSE historical series if you need the exact print. What matters for your intuition is less the exact index level and more the shape: a multi-year advance built substantially on liquidity and leverage, not on a corresponding multi-year advance in underlying corporate earnings.

The second era is the correction and consolidation that followed, running roughly from later 2016 through 2019. This is where the liquidity story reverses. Nepal Rastra Bank tightened as deposit growth failed to keep pace with credit growth, the credit-to-deposit ratio in the banking system came under pressure, and interest rates — especially fixed deposit rates offered by banks scrambling for deposits — rose sharply. When the cost of money rises and its availability tightens, two things happen to a leveraged market at the same time. First, margin loans that looked comfortable at low interest rates become expensive to carry, and some borrowers are forced to sell to service or repay them. Second, new buying power dries up, because banks have less room to extend fresh margin lending and depositors can earn attractive fixed returns elsewhere instead of chasing shares. NEPSE spent roughly three years in a wide trading range, generally described as the low-to-mid 1,100s to the 1,300s, an approximate band worth treating as a rough recollection of the period rather than an exact statistic. It was not a single sharp crash; it was a long, grinding, liquidity-starved consolidation, punctuated by short rallies whenever liquidity eased briefly.

The third era is the pandemic-era rally of 2020-2021 and its peak. This is the most dramatic example in NEPSE's short history of a liquidity-driven bull market, and it is worth understanding mechanically rather than as a story about optimism. When COVID-19 lockdowns hit, several things happened to Nepal's liquidity picture at once. Remittance inflows, which many analysts expected to collapse, instead held up and in some periods rose, partly because migrant workers unable to travel or spend abroad sent more of their earnings home, and partly because informal channels (hundi) were disrupted, pushing more remittance through formal banking channels where it showed up as deposits. Interest rates fell to some of the lowest levels in NEPSE's modern history as the banking system sat on ample deposits with fewer productive lending opportunities during lockdowns. At the same time, retail Nepalis stuck at home discovered online trading — dematerialized shares, the Trading Management System, and mobile-based Meroshare accounts made it possible to open a demat account and trade shares from a phone without visiting a broker's office. Cheap money, abundant liquidity, and a large new wave of retail participants converged, and margin lending expanded again, again amplifying the move in both directions. NEPSE rallied from roughly the 1,100s in 2020 to a peak commonly cited around the 3,200 mark in mid-2021 — again, treat that figure as an approximate, illustrative recollection rather than a number to quote precisely; pull the exact print from your own data pipeline if precision matters for a specific decision.

The fourth era is the 2022 correction, and it is close to a textbook mirror image of what triggered the 2016-2019 slide, compressed into a shorter and sharper period. Nepal faced balance-of-payments pressure and falling foreign exchange reserves through 2021 into 2022, partly from a surge in imports as the economy reopened. NRB responded with a tightening cycle: policy rates rose, import restrictions were introduced on certain goods, and banks faced credit-to-deposit ratio limits that forced many of them to slow lending and, in some cases, call in margin loans or refuse to renew them. Fixed deposit rates spiked into double digits as banks competed hard for scarce deposits. Margin-financed positions built during the 2021 rally came under pressure exactly when the ability to refinance them evaporated, and NEPSE fell back sharply, into roughly the high-1,900s to 2,000 range by the end of 2022, with further weakness into 2023.

The most recent era, running from roughly 2023 into 2026, has been one of gradual recovery and consolidation rather than a fresh dramatic rally. As NRB's tightening cycle eased, policy rates came down in steps, remittance and reserve positions stabilised, and interest rates on deposits and loans drifted lower again, NEPSE recovered in a choppier, more uneven way than either of its two prior rallies — advancing into the 2,400 to 2,800 range in various stretches, with real volatility around that recovery rather than a smooth climb, and still, as of this writing, below the 2021 peak. Whether that changes by the time you are reading this is exactly the kind of thing this almanac cannot tell you and your own updated data pipeline can.

Lesson 106.2 — Valuation Ranges Across the Cycle: A Sector Reference Table

Because NEPSE's swings are liquidity-driven more than earnings-driven, the same company can trade at wildly different multiples of its own earnings and book value depending purely on where the credit cycle stands — with little change in the business itself. This is one of the most useful and most dangerous things to internalize as a Nepali investor. Useful, because it means valuation ranges are genuinely cyclical and can act as a rough compass. Dangerous, because it tempts people to treat a past cycle's peak or trough multiple as a hard ceiling or floor that a share "must" return to.

The table below gives approximate, historically-informed reference ranges for price-to-earnings (P/E) and price-to-book-value (P/BV) multiples across NEPSE's major sectors, split by roughly what "bull phase" conditions and "bear phase" conditions have historically looked like. These are not predictions, they are not current-as-of-publication quotes, and they should not be used as the sole basis for a buy or sell decision. They exist so that when you see a banking stock trading at 40 times earnings, or a hydropower counter trading below 10 times earnings, you have some sense of whether that sits inside or far outside the range this market has historically shown for that sector, and can ask why.

A few observations worth attaching to that table rather than reading it as a stand-alone fact sheet. First, hydropower multiples deserve their own caution: because many hydropower companies report low or lumpy current earnings (a plant not yet at full generation, a monsoon-dependent revenue swing, or a project still under construction reporting through an associate holding), P/E ratios in this sector can look extreme in both directions for reasons that have nothing to do with market sentiment and everything to do with where a specific plant sits in its own commissioning and hydrology cycle. Do not read a triple-digit hydropower P/E automatically as a bubble signal, and do not read a low one automatically as a bargain, without first checking whether the earnings base itself is temporarily depressed or inflated.

Second, microfinance multiples have historically compressed the hardest during liquidity tightening phases, because the sector's business model — small loans, often to borrowers with thinner collateral cushions, funded by wholesale borrowing from banks — is unusually sensitive to the same interest rate and credit-to-deposit pressures described in Lesson 106.1. When banks tighten, microfinance institutions' own cost of funds rises faster than most other borrowers', and their asset quality assumptions get tested hardest. That is part of why microfinance P/BV multiples have shown some of the widest bull-to-bear swings on the table.

Third, insurance multiples have historically carried their own quirk: this is a sector where regulatory paid-up capital increases (discussed further in Lesson 106.4) have periodically forced fresh capital raises that diluted per-share book value and earnings in the near term, distorting multiples independent of the credit cycle. When you see an unusual insurance multiple, check first whether a recent capital increase or bonus/rights issuance is the real explanation before assuming it reflects a market view on the business.

Lesson 106.3 — The Fiscal Year Clock: AGMs, Book Closure, and Dividend Timing

Nepal's government fiscal year runs from Shrawan 1 to the end of Ashad — roughly mid-July to mid-July of the following Gregorian year — and nearly every listed company in Nepal reports its annual accounts on this same fiscal calendar rather than a January-to-December year. This single fact shapes an entire recurring rhythm in NEPSE that repeats every year, and that a Nepali investor benefits from knowing by heart rather than relearning each season.

Once a company's fiscal year closes at the end of Ashad, it takes time to finalise audited financial statements, get board approval, and secure regulatory sign-off (from NRB for banks and financial institutions, from the Insurance Board for insurers, and from SEBON more broadly) before the company can call its Annual General Meeting. In practice, this means AGM season for most Nepali listed companies clusters in the months roughly corresponding to Poush through Falgun — approximately December through March — though it is common, and normal, for some companies to hold AGMs later in the year, and for the exact clustering to shift somewhat year to year depending on regulatory processing times and each company's own pace. Do not assume every company will hold its AGM in the same month every year; treat the December-to-March window as the period when most AGM-related activity happens, not a fixed date on the calendar.

Before an AGM that will approve dividends (cash, bonus shares, or both), a company sets a book closure date. Shareholders who hold the stock as of that book closure date are the ones entitled to the dividend the AGM subsequently approves; anyone who buys after book closure, even by a single day, does not receive that dividend cycle's payout. This creates a very reliable, recurring pattern in NEPSE trading behaviour: volume and price often firm up in the days and weeks leading into an expected book closure, as investors position to capture an anticipated dividend, and it is common — though not universal or guaranteed — to see some profit-taking or price softness immediately after book closure, as short-term dividend-capture buyers exit. This is sometimes called a dividend-capture pattern, and while it is a real and recurring seasonal tendency, it is not a mechanical law; a stock's price can just as easily keep rising after book closure if the broader liquidity and sentiment backdrop is strong enough to override the seasonal effect. Treat it as one input among several, not a trading system on its own.

Once the AGM approves a dividend, cash dividends are typically credited to shareholders' bank accounts within a defined regulatory window after approval, and bonus shares go through a separate process of regulatory approval, allotment, and crediting to shareholders' demat accounts via CDSC, which historically has taken noticeably longer than cash dividend disbursement — sometimes stretching to weeks or months after the AGM itself. If you are counting on bonus shares to be tradeable by a specific date, build in a real buffer rather than assuming an immediate credit.

There is a second, quieter seasonal pattern tied to the same fiscal year-end: because Ashad-end (mid-July) is when banks and financial institutions close their books for regulatory ratios — capital adequacy, credit-to-deposit ratio, non-performing loan classification — there is a recurring tendency for banking system liquidity to tighten somewhat around fiscal year-end, as banks manage their balance sheets to meet regulatory ratios on the reporting date, and for interest rates on short-term instruments to firm up around the same period. Businesses across the economy also tend to settle tax obligations and loan repayments around fiscal year-end, adding to the seasonal liquidity squeeze. This is a modest, recurring seasonal pattern rather than a dramatic one, but it is worth having on your calendar alongside AGM season, because the two together roughly bookend the Nepali investing year: a liquidity-tightening period around Ashad-end (mid-July), followed some months later by a wave of AGMs, book closures, and dividend announcements clustering in the following Poush-to-Falgun window.

Lesson 106.4 — A Decade of Regulatory Turning Points

NEPSE today looks and functions differently than it did a decade ago, and almost none of that change came from the market itself — it came from regulatory decisions made by NRB, SEBON, and NEPSE's own management, often in direct response to the credit cycles described in Lesson 106.1. Understanding these turning points matters for two reasons. First, several of the mechanical shifts described elsewhere in this book — margin lending amplification, dividend timing, the ease of retail participation — exist in their current form only because of specific regulatory decisions, and those decisions can and do change again. Second, when you read older commentary, older data, or even older chapters of financial history about NEPSE, you need to know which regulatory regime that commentary was written under, because a rule that was true in 2015 may not be true today, and a rule that is true today may not hold by the time you are reading this.

The shift to electronic trading was one of the foundational changes. NEPSE moved from an open-outcry floor trading system to a fully electronic Trading Management System, changing execution speed, transparency, and the practical barrier to entry for ordinary investors. Around the same broad period, dematerialization of shares became mandatory, meaning physical share certificates were retired in favour of electronic holdings recorded through CDSC (the Central Depository System and Clearing company), with investors holding shares in demat accounts rather than paper certificates. Together, these two changes are the infrastructure that made everything else in this chapter — online trading, mobile-based participation, faster settlement — possible. Before this shift, participating in NEPSE meant physical certificates, broker floor visits, and settlement timelines that would feel unrecognizably slow today.

A second major turning point was a wave of NRB-driven capital adequacy changes for banks and financial institutions, most visibly a mandated increase in minimum paid-up capital for commercial banks (and, on a different schedule, for development banks, finance companies, and other BFI categories) that forced a wave of mergers and acquisitions across the banking sector, along with a wave of rights issues and bonus share issuances as banks scrambled to build up capital organically and through the market. For an investor, this mattered on two levels: it changed which specific bank shares existed on NEPSE at all (many older bank names disappeared into mergers), and it produced a sustained period of share count expansion across the banking sector, which is part of why any long-run per-share comparison of Nepali bank shares has to account for repeated bonus and rights dilution, not just price movement.

A third turning point was the tightening and loosening cycle in margin lending rules, discussed mechanically in Lesson 106.1. After the 2016 peak, regulators moved to tighten how margin lending was valued and concentrated — adjusting the basis on which collateral shares are valued for margin purposes, and limiting how concentrated a margin book could be in a small number of scrips — specifically because excessive margin-fuelled concentration had been a visible amplifier of the preceding rally and was seen as a systemic risk once the market turned. A similar tightening occurred again around 2022, this time bound up with the broader NRB credit-to-deposit ratio squeeze, including reduced loan-to-value allowances on margin lending and higher interest rates on margin loans themselves. In both cases, the tightening arrived after the peak, not before it — a pattern worth remembering, because it means margin lending rule changes have historically been a lagging confirmation of a cycle turn rather than an early warning of one.

A fourth turning point has been the ongoing reform of the IPO and rights issue application process, moving from older, more cumbersome application methods toward ASBA (Application Supported by Blocked Amount) and its later online form, C-ASBA, alongside the broader rollout of Meroshare as the standard portal for demat account holders to apply for IPOs, receive allotments, and manage their holdings. These reforms, taken together with SEBON's periodic adjustments to IPO allotment methodology (including lottery-based allotment for oversubscribed issues and minimum retail allocation rules), have made IPO participation dramatically more accessible to ordinary retail investors than it was a decade earlier, while also meaning that IPO allotment odds and processes you may remember from several years ago may already be out of date.

Lesson 106.5 — Reading the Cycle in Real Time: Signals Worth Tracking

An almanac is only useful if it also tells you how to place today somewhere on the map it describes. The four eras in Lesson 106.1 were each recognizable, in real time, to anyone tracking the right handful of signals — not with certainty, and not early enough to catch the very first move, but early enough to matter. The same signals are worth tracking today, on an ongoing basis, using the data pipeline built in Chapter 105.

The single most important signal is the credit-to-deposit ratio across the banking system, and its trend rather than its level. When CD ratios across major banks are comfortably below the regulatory ceiling and trending down (deposits growing faster than credit), the banking system generally has room to extend fresh lending, including margin lending, and liquidity conditions tend to be easy. When CD ratios are pressed up against the ceiling and trending up, banks are constrained, deposit competition intensifies, interest rates rise, and margin lending capacity shrinks. This single ratio, tracked over time, foreshadowed both the 2016-2019 tightening and the 2022 correction well before NEPSE's index confirmed the turn.

The second signal is the trend in fixed deposit interest rates offered by commercial banks. Rates that are falling, or have recently fallen to multi-year lows, are consistent with an easy-liquidity environment that has historically supported NEPSE rallies; rates that are rising, especially rising quickly, are consistent with the tightening environment that has historically preceded or accompanied corrections. This is a signal ordinary investors can track without any specialised data source — bank FD rates are publicly advertised — and it is one of the most reliable, low-effort indicators available to a retail investor in Nepal.

The third signal is remittance inflow growth, published periodically by NRB, because remittances are one of the primary sources of deposit growth in the Nepali banking system and therefore a leading input into the CD ratio and liquidity story above. A period of strong remittance growth tends to feed through into stronger deposit growth, easier system liquidity, and — with a lag — friendlier conditions for equities; a period of weak or negative remittance growth tends to work in the opposite direction.

The fourth signal is margin lending outstanding as a share of total bank lending, where data is available, and more generally the qualitative tone of NRB and SEBON communication about margin lending — whether it is being loosened or tightened. Because margin lending amplifies the underlying liquidity trend in both directions, a rapid expansion of margin lending during a rally is historically a sign that the rally has entered its more fragile, leverage-dependent phase, not a sign that it is safe to lean in harder.

None of these four signals, individually or together, tells you exactly when a peak or trough will arrive. What they do is let you locate roughly which phase of the credit cycle the market is currently in, and therefore what kind of valuation multiples (Lesson 106.2), what kind of dividend behaviour (Lesson 106.3), and what kind of regulatory posture (Lesson 106.4) are more or less likely to be operating at that moment. That is the entire and modest purpose of tracking them.

Lesson 106.6 — Using This Almanac: A Living Reference, Not a One-Time Read

This chapter was never meant to be read once. Sunita's laminated sheet works because she looks at it every year, updates the numbers that have changed, and adds a line for whatever new regulatory shift or cyclical marker occurred since her last update. That habit — not the specific numbers on the sheet at any given moment — is the actual value of an almanac chapter like this one.

Use it in three concrete ways. First, before you make a significant portfolio decision — adding a large new position, taking on margin, or panic-selling into a drawdown — glance at Lesson 106.1 and ask which era this current moment most resembles: easy liquidity and rising leverage, or tightening liquidity and forced deleveraging. Second, before you judge whether a stock's current valuation looks rich or cheap, glance at the ranges in Lesson 106.2 and ask whether the multiple in front of you sits inside or outside historical norms for that sector, and why. Third, keep the fiscal year calendar in Lesson 106.3 live in your own tracking sheet, and revisit the regulatory table in Lesson 106.4 whenever you read older material about NEPSE, so you can judge whether the rule being described is still the current rule.

None of this replaces the primary sources. NRB's periodic reports on monetary policy, banking sector liquidity, and remittance flows; SEBON's notices on IPO, rights issue, and margin lending regulation; and NEPSE's own published historical index and turnover data are the ground truth, and this chapter is a compass pointing you toward them, not a replacement for checking them. The Canon Data Pipeline built in Chapter 105 is precisely the tool for keeping this almanac current: the same spreadsheet or system you built there to pull NEPSE index data, sector indices, and company disclosures is where you should also be logging book closure dates, AGM outcomes, interest rate trends, and any regulatory notice that touches margin lending, capital adequacy, or IPO process — so that a year from now, or five years from now, this chapter's approximate figures can be checked, updated, and corrected against your own running record rather than trusted blindly.