6th October 2025, Kathmandu
The Nepal Stock Exchange (NEPSE) has implemented a staggered resumption of its operations following the government’s swift revocation of the two-day public holiday, which was initially declared nationwide due to the risks associated with heavy rainfall, flooding, and landslides.
NEPSE Office Reopens Today
The strategy involves a phased return to normalcy, prioritizing internal administrative functions before fully engaging in public-facing market activities. This approach, as outlined in the official notice this morning, is a pragmatic move designed to ensure system stability and operational readiness before exposing the sensitive secondary market to potential volatility.
1. Phased Reopening Strategy: Office First, Trading Second
NEPSE’s decision to open its office today (Ashwin 20) but resume share trading activities only from tomorrow (Ashwin 21) is a standard risk-mitigation measure following an unexpected closure:
Day 1 (Ashwin 20/Today): Administrative and Readiness Phase: By resuming internal office work today, NEPSE ensures that all critical back-office functions and technical infrastructure are fully operational and error-free. This day is crucial for the following preparatory tasks:
System Integrity Checks: Technicians must verify the stability of the trading platform, the data servers, and the connectivity with all Stock Broker firms and the Central Depository System (CDS and Clearing Ltd.). Any technical issues caused by the emergency shutdown or power fluctuations during the holiday must be resolved before the market opens.
Settlement Backlogs: The two-day holiday (Ashwin 19 and 20) would have accumulated a backlog of pending share settlements and payments from the last trading day. NEPSE personnel, along with the Central Depository, will utilize today to process, reconcile, and settle these obligations, ensuring a clean slate for the start of trading tomorrow.
Regulatory Alignment: Office work is required to fully align all procedures with the latest directives from the Securities Board of Nepal (SEBON) and the Nepal Rastra Bank (NRB), both of which have also resumed their operations today. This ensures the market is ready to comply with any new financial or operational instructions issued by the regulators following the emergency.
Broker Communication: The day is used to communicate formally with all brokerage firms and market participants, confirming the trading schedule and addressing any immediate operational questions they may have. This reduces the risk of confusion or technical errors when the market opens.
Day 2 (Ashwin 21/Tomorrow): Trading Resumption Phase: Resuming secondary market trading tomorrow ensures that the market opens in a controlled and prepared environment. Investors will have had a full day’s notice, and all supporting financial and technical infrastructures will have been stress-tested during the administrative reopening.
2. Market Impact of the Delayed Trading
While the delay in trading is only one day, it has several implications for the capital market:
Managing Volatility and Investor Sentiment: A sudden, unscheduled closure of the stock market can generate uncertainty. Analysts often observe a “post-holiday effect,” where trading activity immediately following a multi-day closure can exhibit abnormal price movements due to a rush of pent-up demand or supply. By using today for administrative readiness, NEPSE attempts to cushion the market against potential shock by ensuring smooth execution of trades when they resume.
Liquidity and Settlement Cycle: The concurrent reopening of the Nepal Rastra Bank (NRB) and commercial banks today is essential for the market’s payment infrastructure. NRB’s immediate return to full operation ensures that the flow of funds for the settlement of transactions that occurred before the holiday, and for transactions that will occur tomorrow (Ashwin 21), is restored without delay. If trading had resumed today without a full day of banking system normalization, there could have been liquidity bottlenecks, hindering the timely T+2 settlement cycle.
Response to Flood-Related News: The two-day break has prevented the market from reacting to all the news concerning the flood and its economic impact (e.g., on hydropower, insurance, and manufacturing companies). The trading resumption tomorrow will be the market’s first collective opportunity to price in this new information. The administrative day today allows NEPSE and SEBON to monitor the news flow and be prepared for potential high volatility in specific sectors, such as the insurance and hydropower indices, which are directly affected by the floods.
3. Government and Regulatory Synchronization
The overall context is a synchronized return to operations across all government and financial sectors, triggered by the Kathmandu District Administration Office’s late-night directive. The NRB and Beema Pradhikaran (Insurance Authority) are back today, as are general banks and financial institutions (BFIs). NEPSE’s decision to separate its administrative reopening from its trading resumption is a tactical pause within this broader, coordinated effort. It highlights the unique technical and settlement demands of a modern stock exchange, where a full day is required to transition from a state of emergency closure back to full market readiness, even when the regulatory landscape has instantly normalized.
This phased reopening is a prudent measure to ensure a stable and orderly resumption of the secondary market, prioritizing the technical integrity of the system and the smooth settlement of funds before allowing billions of rupees in trading volume to flow.
For More: NEPSE Office Reopens Today