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Share trading volume at the Nepal Stock Exchange (NEPSE) declined 18.9 percent in 10 months of the current Fiscal Year (FY) amid depleting confidence of the investors.

According to the NEPSE, the total transaction amount of shares in the country’s secondary market stood at Rs 1.420 trillion during mid-July 2025 and mid-May 2026. The volume was recorded at Rs 1.752 trillion during the same period of the last FY.

The share trading volume decreased in sectors other than hydropower, manufacturing and processing, hotels and tourism, and debentures. Hydropower shares saw the highest trading volume of Rs 642.29 billion, which was 1.66 percent more than amount in the review period of FY 2024/25.

The finance group had the largest fall of 71.37 percent in trade volume of its shares. Stocks worth Rs 46.16 billion of the group were traded in the review period of current FY.

In the early days of FY 2025/26, the market transaction was encouraging with the NEPSE posting the volume as high as Rs 21.46 billion on July 20. The volatility in the share transactions appeared two weeks after the Gen Z protest, when the volume dropped to mere Rs 728.70 million on September 18.

The market bounced back after the general elections on March 5. As a result, the daily turnover soared to Rs 23.59 billion on March 22. However, the market failed to retain its charm for investors after the government launched its move against cases of money laundering.

After the success of the March 5 election, the stock market recorded the lowest daily turnover at Rs 555.96 million on March 9 with the authority imposing single-day circuit breakers. Subsequently, NEPSE revised the rules of circuit breakers and the secondary market posted daily turnover as low as Rs 2.45 billion.

Although the loan issuance of banks and financial institutions (BFIs) are reported to have heavily increased their lending on collateral against shares, the market transaction has declined by a notable amount. According to Nepal Rastra Bank, the BFIs issued additional loans of Rs 18.78 billion alone in nine months of the current FY, taking total lending in the segment to Rs 159.48 billion.

Of the total margin loans, 69 percent was issued to large investors taking loans of more than Rs 10 million, while 11.1 percent growth was recorded in the segment. Similarly, the loan issuance for small investors taking loans below Rs 2.5 million increased 47.2 percent as of mid-April.

The sector’s analysts said the share market has been adversely affected due to eroded investors’ confidence. According to them, the investors are in a wait and watch situation until the annual budget scheduled to be announced on May 29.