MEASURING EFFICIENCY OF STOCK MARKET INDICES AS BENCHMARK OF PORTFOLIO PERFORMANCE

Abstract

The study analyses performance of the Nepalese stock market over three decades. The secondary market helps to indicate the economic health of the country and also they provide adequate resources for a company’s fair valuation. The study mainly focuses on the growth and trend of the secondary market using key indicators of the stock market. The analysis of trends can offer advantages to the investors as it helps to identify the opportunities to trade the securities, minimize risk, and enhance the portfolio performance. All the listed companies whose shares were traded in SEBON and NEPSE are taken as population for this study. Secondary data has been used for the study. All of the information needed for the study is gathered from secondary sources, primarily the websites NEPSE, NRB and SEBON. The collected data have been tabulated and interpreted. The performance of the secondary stock market has been analyzed based on the growth of paid-up capital, market capitalization, number of transactions, number of listed companies, number of traded companies, market day per year, number of issue approved ,daily average turnover ratio, market turnover in volume and value, total amount of issue approved and NEPSE Index. The study has also identified the events causing significant growth. For capital mobilization, the market should develop a trustworthy and sustainable medium, conduct continuous research and study, training and awareness programs. To enhance the stock market factors like effective regulatory framework, sound investment policy, political stability and proper environment plays an important role. Studies and research programs can be held to explore more on the performance of the stock market by introducing different variables.