- Prem Wali
One of the most important pillars of Nepal’s economy is the financial system, and the stock market is an active and sensitive part of it. The stock market is generally thought of as a game for a limited number of affluents, but the reality is much broader. Today, people of different ages, classes, regions, professions and genders are associated with Nepal’s stock market. From students to housewives to middle class to big businessmen, employees to retirees, everyone is participating in the stock market in one way or the other.
Therefore, the fluctuations of the stock market are not only related to the profit and loss of the investors but also have a direct impact on the overall economic activity of the country. When the market is active, it will have a positive impact on trade, tourism, banking, industry, employment and government revenue. Therefore, the question ‘Why should the stock market be active?’ has become a topic directly related to the economy today.
Young Generation and the Stock Market
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Today, a large number of young people under the age of 30 are involved in the stock market. Many youths have started investing small savings in the stock market as the opportunities for part-time employment are limited in Nepal as they are studying abroad. Their aim is not only to become millionaires, but also to support themselves, become self-reliant and gain financial experience.
When a student makes some profit from the stock market, he spends that money on restaurants, travel, clothing, technology equipment, or daily necessities. In this way, the expenditure of the youth is directly supporting small businesses and service-oriented businesses.
Youths pay tax on the income they earn from the stock market. Even when they spend, the government’s revenue through VAT and other taxes increases. This shows that the volatility of the stock market is not just a game of numbers on a screen, but it is an economic cycle that extends to the market, business and government earnings.
Middle-class Investors: The Backbone of the Economy
Another big group in Nepal’s stock market is the middle class investors. They can invest their savings, bank loans or earnings over the years. Some have invested two to four crores, while some have kept their lifetime savings in the market.
When the market is good, their confidence increases. It also increases the ability to spend on building a house, buying a vehicle, family travel, better education or health care. It makes hotels, tourism, real estate, automobile, education and service sectors dynamic.
In Nepal, there is talk of a large amount of money lying idle in the banking sector these days. In such a situation, when the market is positive, investors can take loans from banks and invest in new areas. This increases the flow of credit to the bank and reactivates the flow of money in the economy.
The middle class is the most dynamic class in the economy. They spend, save and invest. Therefore, the stock market can be an important medium to give confidence to this class.
economic empowerment of housewives
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With the development of technology, share trading in Nepal has gone online. This has given a great opportunity, especially to housewives. With the ability to buy and sell shares from home, many women have started getting involved in economic activities.
Women, who previously had a limited role in the financial decisions of the household, have now become investors themselves. They have started actively participating in the stock market along with household chores. There are increasing examples of many women starting with small investments and even earning good income.
The impact of women’s earnings is evident on the standard of living of the family. Housewives spend their income on clothes, gold and silver, beauty products, household items, education and family needs, so many sectors of the market are dynamic. From clothing shops to jewelry shops, beauty parlors to home industries, everyone benefits from it.
When women are financially capable, there is less financial pressure on the family. It can also help reduce unnecessary financial stress and the tendency towards wrong earnings. Therefore, the stock market has also become a modern means of economic empowerment of women.
Large Investors and Industrial Expansion
The role of big investors in the stock market is equally important. They can invest in industries, hydropower projects, manufacturing businesses, and other long-term sectors by investing large amounts of capital.
In Nepal, many hydropower projects, banks and companies have raised capital from the public in recent years. The stock market has already shown the ability to make big projects successful by integrating the investment of thousands of people.
When big investors expand industries, jobs are created. Banks generate large loans, demand for construction materials increases, and economic activity expands from transport to service sectors. Ultimately, the government receives large revenues from taxes.
In this way, the stock market is not only a source of income for the rich class, but also a system directly linked to the production, employment and development of the country.
Effective means of raising capital for companies
One of the biggest features of the stock market is that it gives companies the opportunity to raise capital from the public. An industry or company can raise the necessary capital by selling shares to the public rather than relying only on bank loans. On the one hand, it will be easy to expand the industry and on the other hand, the people will also be able to participate directly in the economic development of the country. Since the value of the company is seen on a daily basis in the secondary market, the promoters of the company are also motivated to strengthen their business.
There are many examples of big projects being implemented in Nepal connecting millions of people. If trust and stability in the stock market can be enhanced, larger national projects in the future can be made possible with public participation.
Why the government’s apathy?
Despite having so much economic potential, the attitude of the government and policymakers towards the stock market in Nepal is often indifferent. When the market falls, it not only lowers the morale of the investors but also affects the overall activity of the economy.
Investors are realizing that the government sometimes sees the stock market only in the interest of a limited group. But the reality is that the savings and hopes of millions of people are linked to the stock market.
If the government and regulators adopt stable policies, clear tax regime, investment-friendly environment and a positive outlook, the stock market can be a powerful tool to stimulate the economy.
Today, Nepal needs production, jobs, investment and economic self-confidence. In such a situation, it is necessary to not only weaken the stock market but also to systematize and strengthen it. Because a volatile stock market can energize not just investors – business, industry, banks, tourism, government and the economy as a whole.
(The writer has been active in the stock market for a long time.) )
