NABIL▲ 2.3%| NICA▼ 0.8%| UPPER▲ 1.7%| NHPC▲ 3.1%| HBL▼ 1.2%| SANIMA▲ 0.6%| NMB▼ 0.4%| NEPSE INDEX▲ 1.4% 2,183.6| NABIL▲ 2.3%| NICA▼ 0.8%| UPPER▲ 1.7%| NHPC▲ 3.1%| HBL▼ 1.2%| SANIMA▲ 0.6%| NMB▼ 0.4%| NEPSE INDEX▲ 1.4% 2,183.6|
BSc(Hons.) IT — APU × LBEF  ·  April 2026

Predictive Analytics for
Nepal's Stock Market

An ML-powered NEPSE prediction system combining historical data, NRB macroeconomic indicators, and NLP sentiment analysis to deliver clear Buy, Hold & Sell signals.

Explore the System View Requirements →
60%
retail investors lose money
85%
NEPSE investors are retail
+12%
accuracy gain via NLP sentiment
32
survey respondents validated
14
user requirements derived

Why NEPSE investors struggle

Three interrelated, validated problems undermine NEPSE retail investor outcomes — none addressed by any existing platform.

Problem 01

Inadequate technical analysis tools

Basic indicators — Bollinger Bands, RSI, moving averages — are insufficient for Nepal's macro-sensitive market. Each 0.1% rise in inflation causes a 0.5% drop in the NEPSE index, yet one-dimensional tools cannot capture this.

Systematic signal errors
Problem 02

No integrated analytical platform

No platform combines NEPSE historical prices, NRB macroeconomic data, and Nepali financial news sentiment. Incorporating sentiment analysis can improve forecasting accuracy by 12% in emerging markets.

Zero integrated solutions
Problem 03

Information asymmetry

Institutional investors use sophisticated proprietary systems. Retail investors rely on social networks and informal information channels, creating a structural disadvantage that directly contributes to the 60% loss rate.

Structural inequality

Four modules, one unified platform

The proposed system integrates data collection, ML prediction, sentiment analysis, and a user-facing dashboard into a cohesive, Nepal-optimised platform.

Data Pipeline Module

Automated scraping of daily news from Sharesansar, Himalayan Times and Kathmandu Post using BeautifulSoup. pdfplumber extracts NRB quarterly macroeconomic PDFs. ETL pipeline feeds PostgreSQL with Z-score outlier detection and min-max normalisation.

BeautifulSoup pdfplumber Pandas PostgreSQL
🧠

ML Prediction Engine

Linear Regression models linear correlations between macroeconomic indicators and stock prices. Decision Tree Classifier captures non-linear market event responses. Both models are combined with sentiment scores to produce final Buy, Hold, or Sell signals.

Scikit-learn Linear Regression Decision Tree MAE / RMSE
📰

NLP Sentiment Module

NLTK-based keyword sentiment classifier assigns positive, negative, or neutral scores to Nepali financial news articles. Domain-specific financial lexicon calibrated for NEPSE terminology. Sentiment scores integrated as a feature input to the ML pipeline.

NLTK NLP Sentiment Analysis Keyword Lexicon
📊

Web Dashboard (User & Admin)

React.js 18 with Chart.js delivers mobile-responsive, interactive price charts, sentiment trend graphs and sector-wise comparisons. Flask 3.0 REST API backend with Redis caching ensures sub-3-second response on low-bandwidth connections. Secure JWT authentication.

React.js 18 Flask 3.0 Chart.js AWS EC2 Redis

Tools selected for Nepal's context

Every technology choice was rigorously justified against six criteria including interpretability, infrastructure fit, and retail investor trust.

Python 3.11
Primary language
Scikit-learn
ML models
Flask 3.0
REST API
React.js 18
Frontend
PostgreSQL 16
Database
Redis 7
Caching layer
NLTK
NLP / Sentiment
AWS EC2
Cloud deployment
Docker
Containerisation

Gap in the market — validated

No existing platform simultaneously addresses NEPSE data integration, retail accessibility, macroeconomic data, and Nepali news sentiment.

Criterion Bloomberg Terminal QuantConnect Sensibull NEPSE Portal Proposed System
NEPSE data support No No No Basic Yes (full)
Retail accessibility No Limited Yes Yes Yes
Sentiment analysis Yes Limited No No Yes (NLP)
Macroeconomic integration Yes Limited No No Yes (NRB)
ML-based predictions Yes Yes Partial No Yes
Buy / Hold / Sell signals Yes Yes Yes No Yes
Cost to end user $24,000/yr Free/paid Free/paid Free Free
Nepal infrastructure fit No No No Yes Yes

The proposed system is the only platform satisfying all eight criteria simultaneously.

Agile — 6 sprints to delivery

Agile was selected for continuous user feedback integration, iterative ML development support, and adaptability to evolving requirements.

S1
Planning & Architecture Weeks 1–2

System architecture, database schema, Docker containerisation, GitHub repository structure, CI/CD pipeline via GitHub Actions. Full product backlog compiled from 14 user requirements.

S2
Data Pipeline Development Weeks 3–5

BeautifulSoup web scraping, pdfplumber NRB PDF extraction, ETL pipeline to PostgreSQL. Z-score outlier detection and min-max normalisation validated on sample datasets.

S3
ML Model Development Weeks 6–7

Linear Regression and Decision Tree trained with 80/20 split on 2020–2024 data. Evaluated with MAE, RMSE, and Directional Accuracy against moving average and Bollinger Band baselines.

S4
NLP Sentiment Module Weeks 8–9

NLTK keyword sentiment analysis with domain-specific Nepali financial lexicon. Calibrated for positive/negative/neutral classification, integrated as feature input to the prediction pipeline.

S5
Backend API & Frontend Dashboard Weeks 10–12

Flask REST API, React.js dashboard with Chart.js interactive charts, sentiment graphs, and macroeconomic correlation visualisations. Redis caching for real-time data access optimisation.

S6
Integration, Deployment & UAT Weeks 13–16

Full system integration, AWS EC2 cloud deployment, and User Acceptance Testing with 20–30 retail investor pilot participants from NEPSE brokerage communities using the System Usability Scale (SUS).

Survey & interview findings

Mixed-methods research — 32 verified NEPSE retail investor surveys plus 5 qualitative expert interviews — grounded every user requirement in empirical evidence.

Key quantitative findings (n=32)

Use only basic technical indicators
78.1%
Dissatisfied with existing tools
68.8%
Prefer Buy/Hold/Sell signals
87.5%
Access platforms via smartphone
62.5%
Would follow ML recommendations
59.4%
Use social media for market info
65.6%

Qualitative interview themes (n=5)

Theme 1: Information lag

Frustration with time lag between macroeconomic announcements and availability in existing trading tools. Directly informed UR-03, UR-04, and UR-05 — push notifications for significant market events.

Theme 2: Trust calibration

Experienced investors require clear confidence levels to trust algorithmic recommendations. This theme was the primary driver behind UR-07 (display model accuracy metrics) and the selection of transparent Decision Tree models over black-box deep learning.

Theme 3: Literacy variability

Significant variance in quantitative financial literacy across participants. Led to the visual-first, simplified signals language design strategy and the requirement to provide explanations alongside every recommendation.

Participants

2 × Retail investors 1 × Brokerage professional 1 × Financial analyst 1 × NRB data officer

14 validated requirements

Derived from quantitative survey analysis, qualitative interviews, domain literature review, and PSF documentation.

ID Requirement Priority Source
UR-01 Provide Buy, Hold, or Sell signals for NEPSE stocks Essential Survey, Interview
UR-02 Display interactive price trend charts with historical data Essential Survey
UR-03 Integrate NRB macroeconomic data into predictions High Literature, Interview
UR-04 Provide daily news sentiment scores with source citation High Survey, Interview
UR-05 Deliver push notifications for significant market events High Survey
UR-06 Allow filtering of predictions by market sector Medium Survey
UR-07 Display model accuracy metrics (MAE, RMSE) to users High Interview
UR-08 Provide mobile-responsive interface design Essential Survey
UR-09 Require secure user registration and login Essential Survey
UR-10 Allow admin to retrain ML models on updated datasets Medium PSF Document
UR-11 Support English interface with Nepali annotations Medium Survey
UR-12 Operate acceptably on low-bandwidth connections High Literature, PSF
UR-13 Provide downloadable prediction summary reports Low Survey
UR-14 Admin can view user activity logs and system usage statistics Medium PSF Document

Tangible & intangible benefits

The system advances both practical investor outcomes and broader societal goals aligned with the UN Sustainable Development Goals.

📈

Trading signal tool

Web-based Buy/Hold/Sell signal generation with NEPSE stock price trend charts and volatility indexes accessible to every retail investor.

🔄

Automated data pipeline

Ingests NEPSE prices/volumes, NRB quarterly PDFs, and Nepali finance media continuously — no manual data entry required.

🗞️

NLP sentiment module

10–12% improvement in prediction accuracy through positive/negative/neutral classification of Nepali financial news.

⚖️

Reduced information gap

Equalises access to sophisticated analytical tools between institutional traders and retail investors — directly addressing structural inequality.

🤝

Financial inclusion

Improved analytical access for the 85% retail investor majority, building evidence-based confidence and reducing loss rates.

🌏

UN SDG 8 alignment

Directly contributes to SDG 8 Target 8.10 — Decent Work and Economic Growth through improved financial market access.

Gaurab Nepali

G
Gaurab Nepali
BSc(Hons.) Information Technology
Student ID NP069821
Intake NP3F2509IT
University APU Malaysia
College LBEF, Nepal
Module CT052-3-3-IR
Date April 2026

Supervisors

Prof. (Dr.) R.N. Thakur
Dean, LBEF · Module Leader · Primary Supervisor
Mr. Ramesh Suwal
Co-Supervisor · System Development Methodology

Project background

This investigation was undertaken to address a critical gap in Nepal's financial technology landscape. With over 85% of NEPSE investors being retail participants — most lacking access to any sophisticated analytical platform — the potential for a data-driven, ML-powered system to meaningfully reduce the 60% loss rate among retail investors is significant.

The investigation combined a rigorous literature review, comparative analysis of four global systems, and original mixed-methods primary research (32 surveys + 5 expert interviews) conducted across Kathmandu's NEPSE brokerage communities between February and April 2026.

Five mandatory supervisory sessions with Prof. (Dr.) R.N. Thakur guided each critical stage: PSF approval, literature review depth, methodology design, critical analysis standards, and final submission readiness.

SDG 8
Decent Work & Economic Growth Target 8.10 — Strengthen financial institutions and expand access to financial services