Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Among investors in Nepal’s stock market, one persistent question stands out: Which stocks offer safer and more profitable returns in the long run? In a market where sentiment, speculation, and sudden trends often influence decisions, choosing the right stock at the right time has become increasingly challenging. Analysts emphasize that long-term investing requires careful evaluation of market conditions, company fundamentals, and broader economic policy environments.
Market analysts and brokerage firms suggest that commercial banks currently appear to be among the more stable investment sectors for long-term investors. While short-term gains may be modest, the sector is displaying improving financial indicators, relatively lower price volatility, and stronger capacity to distribute dividends compared to other groups.
Price Corrections Have Opened Entry Opportunities
Nepse reached an all-time high of 3,226 points in 2021. Since then, the market has undergone multiple corrections. Data from mid-2024 (2081 BS) shows that share prices of commercial banks have declined significantly:
Out of the 19 commercial banks listed in the market, the share prices of 11 banks have dropped by 20% to 40%.
The overall sector remains in a lower price range than previous peaks.
According to brokers,“The current phase is favorable for long-term entry, as prices are relatively low and less exposed to speculative volatility.”
Commercial banks generally have large paid-up capital, which naturally reduces unnecessary price manipulation and keeps share price fluctuations comparatively stable.
Sector Showing Gradual Recovery After Policy Tightening
Following the pandemic and periods of aggressive credit expansion, Nepal Rastra Bank implemented stricter monetary and banking regulations. This slowed loan growth and increased stressed loans across banks. However, recent financial data indicates signs of gradual recovery.
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