Nepal sees economic revival post-CA polls

Nepal's economy, hobbled by prolonged wrangling among the nation's political leaders, has begun to show signs of recovery following the successful conduct of the Nov 19 constituent assembly polls.

One positive economic indicator of the return of confidence among investors was the behaviour of the Nepal Stock Exchange (NEPSE) whose index rose by more than 100 points within a span of just a week, reports Xinhua.

The index shot up by 33.88 points (5.64 percent up) in a single trading day last Thursday, the first trading day after the polls and closed at 634.3 points. In Thursday's trading, the index surged to 707.41 points.

The increase in the NEPSE index during the period of one week is the highest since Aug 31, 2008.

During this period, market capitalisation in Nepal went up from 6.43 billion Nepalese Rupees (NPR) ($64.9 million) to 7.17 billion NPR ($72.4 million). With the boost in the market capitalisation, the total capital of shareholders has increased by 68 billion NPR ($686 million), the highest figure recorded so far.

Stakeholders said factors like successful conduct of the polls, the lead position taken by the rightist Nepali Congress party, and the high expectations of the successful drafting of Nepal's constitution has boosted investors' confidence and the surge in the NEPSE indices is just an expression of this confidence.

"The upcoming government should strive to keep these positive developments so that the economy could be revitalised," said economist Chirinjavi Nepal.

The stock market is the main indicator of the vitality of the economy of any given country. When more investors put their money in the market, it means they have confidence in the country's economy.

"The zeal seen in the stock market is already a manifestation of Nepal's economic revival," Nepal said.

The NEPSE index on Aug 31, 2008, jumped to 1,175 points, a record high in the country's history. It, however, suffered a continuous decline thereafter as the country became embroiled in political infighting.