RSP’s Rise Sparks Stock Market Optimism as Investors Expect Major Reforms

The recent parliamentary election in Nepal has significantly reshaped the country’s political landscape, with the rise of the Rastriya Swatantra Party (RSP) creating new optimism in the capital market. On the first trading day after the election, the Nepal Stock Exchange (NEPSE) surged sharply and triggered three circuit breakers within minutes, forcing the market to close for the rest of the day. The index initially jumped 4 percent within a minute of opening, activating the first circuit breaker and halting trading for 20 minutes. After trading resumed, the market climbed further and hit the second circuit breaker, suspending trading for another 40 minutes. When the market reopened again, the index surged to a 6 percent gain compared to the previous day, triggering the third circuit breaker and closing the market for the day. NEPSE ended the session up by 162.93 points at 2,875.43. During the brief trading period, shares of 261 companies were traded, with 1.143 million shares exchanged worth about NPR 555.9 million.

RSP’s election manifesto has generated significant expectations among investors as it outlines ambitious plans to modernize and reform Nepal’s capital market. The party has pledged to restructure the Securities Board of Nepal (SEBON) to ensure independence from political interference, introduce strategic private sector participation in NEPSE and CDSC, and gradually launch advanced financial instruments such as intraday trading, short selling, futures, and options. It has also promised strict action against insider trading and market manipulation, reforms in the IPO issuance process to make it more transparent, and policies to encourage institutional investors such as pension funds and mutual funds to play a greater role in the market. In addition, the manifesto highlights plans to allow Non-Resident Nepalis (NRNs) to invest in the stock market, develop a bond market, establish a commodity exchange, and expand digital access to the capital market across the country.

However, analysts note that implementing these ambitious reforms may not be easy. Nepal’s bureaucratic delays, policy inertia, and political influence in regulatory institutions could slow the reform process. Resistance from entrenched interest groups and individuals benefiting from insider trading practices may also create obstacles. Moreover, building the required technological infrastructure and ensuring coordination with Nepal Rastra Bank’s monetary policy will be crucial. Therefore, the success of RSP’s capital market reform agenda will largely depend on strong political commitment, clear policy direction, and effective institutional collaboration.