I've been a follower of the Nepal Stock Exchange (NEPSE) for the past 4-5 years. Although the companies listed in the share market and investors alike have matured since its inception in 1994, the share market seems to sway rather unnaturally on either side of the bear/bullish trends and does not move in a trend characterized by a gradual rise and fall. It either keeps going up for 6 months straight and then keeps falling for 6 months in succession.

Now again, even though a lot of banks, financial institutions and other companies saw record profits last year, the stock exchange is experiencing continued decline over the past year. Most companies listed on the NEPSE seem to have good market fundamentals, why is this happening?

I think it is because of the low volume of transactions in the NEPSE. With low volume it is rather like a tap which opens and shuts than a river whose rises and falls have a characterization.

I'd say lack of liquidity, and market ineffciency