KATHMANDU, July 27: The Nepal Stock Exchange (NEPSE) jumped 386.9 points in the past one month, indicating the bullish trend in the country’s share market.
According to the NEPSE, the market index closed at 2,595.75 points on June 26, while it reached 2,982.65 points on Thursday. During the period, the NEPSE index declined only on five days of trading, while it increased on the remaining days.
Stockbrokers termed the recent surge in the secondary market performance as the bullish trend in the stock exchange. “Investors are encouraged to inject more capital as the market index approaches 3,000 points,” said a stockbroker on condition of anonymity.
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Along with the market index, the transaction volume also inclined by notable amounts. The daily turnover increased to around Rs 18 billion from Rs 5-6 billion. “As the index growth is backed by a good amount of trading volume, it is more likely that the secondary market can take a good leap in the coming days too.”
The investors have regained their confidence towards the market also due to the whopping rise in their capital gains. During the review period, investors earned more than Rs 653 billion from shares transactions as the market capitalization rose to Rs 4.977 trillion.
According to the stockbrokers, there are multiple reasons behind the expansion of the secondary market. The monetary policy for FY 2025/26 has reduced the bank rate from 6.5 percent to 6 percent, the policy rate from 5 percent to 4.5 percent, and the deposit collection rate from 3 percent to 2.75 percent, allowing banks and financial institutions to cut down their interest rates.
As an immediate response to the Nepal Rastra Bank’s monetary policy, 13 out of the 20 commercial banks have reduced their interest rates for this month. On average, the maximum interest rate on deposits has declined by 0.2 percentage points. Similarly, the interest rates of banks on almost all types of loans, including margin loans, stand below eight percent per annum.
The central bank has also reduced the risk weightage of loan against shares to 100 percent from 125 percent. Similarly, the threshold on such loans has been increased to Rs 250 million from Rs 15 million.
