The Impact of Finance Minister Appointments on NEPSE (2018–2025)

Chronological Analysis of Leadership Changes

For each Finance Minister appointment, two graphs are used: one showing the NEPSE Index and another showing sectoral indices rebased to 100 to capture relative changes. A vertical dotted line indicates the date of the Finance Minister’s appointment.

Sectoral analysis is limited to Hydropower, Manufacturing, Banking, and Finance. All data are sourced from the NEPSE Monthly Reports, published by the Nepal Stock Exchange. https://www.nepalstock.com/reports/monthly-reports

1. March 16, 2018 – Dr. Yuba Raj Khatiwada 

• Market Signal: Regulatory Fear (Bearish).
• NEPSE Impact: Index fell by about 12% in early weeks.
• Pre-Appointment: All sectors were unstable but generally trending downwards.
• Immediate Reaction: Negative. The downward slope steepened following the appointment.
• Post-Appointment Trend: Prolonged bearishness. Every sector fell significantly below the base of 100.
• Key Finding: This was the most bearish reaction. Hotels/Tourism and Hydro Power were the hardest hit, dropping to ~86 index points.
• Reason: His reputation as a strict regulator caused immediate capital flight from high-risk sectors.

2. October 14, 2020 – Bishnu Prasad Paudel 

• Key Finding: This was the most bearish reaction. Hotels/Tourism and Hydro Power were the hardest hit, dropping to ~86 index points.
  
• Reason: His reputation as a strict regulator caused immediate capital flight from high-risk sectors.
• Market Signal: Regulatory Fear (Bearish).
  
• NEPSE Impact: Index fell by about 12% in early weeks.
  
• Pre-Appointment: All sectors were unstable but generally trending downwards.
  
• Immediate Reaction: Negative. The downward slope steepened following the appointment.
  
• Post-Appointment Trend: Prolonged bearishness. Every sector fell significantly below the base of 100.