Industry Metal Derivatives - Nepal

Nepal

The nominal value in the Industry Metal Derivatives market is projected to reach US$17.89bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 3.54% resulting in a projected total amount of US$21.29bn by 2029.
The average price per contract in the Industry Metal Derivatives market amounts to US$0.07 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in China (US$2,835.00bn in 2024).
In the Industry Metal Derivatives market, the number of contracts is expected to amount to 300.30k by 2029.

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Analyst Opinion

The Industry Metal Derivatives market in Nepal is witnessing a notable shift in recent times, reflecting the evolving dynamics of the financial sector in the country.

Customer preferences: Investors in Nepal are increasingly showing interest in diversifying their portfolios beyond traditional investment options. This shift in customer preferences is driving the demand for metal derivatives as a strategic tool for risk management and investment opportunities.

Trends in the market: One prominent trend in the Nepalese metal derivatives market is the growing awareness and adoption of these financial instruments among retail and institutional investors. As the market matures, more participants are exploring the potential benefits of metal derivatives in hedging against price volatility and speculating on future price movements.

Local special circumstances: Nepal's unique geographic location and limited access to international markets play a significant role in shaping the metal derivatives market in the country. The landlocked nature of Nepal presents challenges in terms of accessing physical metal markets, making derivatives an attractive alternative for market participants looking to gain exposure to metal prices.

Underlying macroeconomic factors: The overall economic growth and stability in Nepal have a direct impact on the metal derivatives market. As the economy continues to develop, there is a corresponding increase in disposable income and investment activities, further fueling the demand for diverse financial products like metal derivatives. Additionally, regulatory reforms and government policies aimed at enhancing the financial infrastructure are creating a conducive environment for the growth of the metal derivatives market in Nepal.

Methodology

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.