Rasuwa flood sends hydropower and insurance stocks tumbling

The impact of Wednesday’s devastating flood in the Bhotekoshi River has spilled over into the stock market, triggering sharp declines in hydropower and non-life insurance stocks.

The Nepal Stock Exchange (NEPSE) index fell 35.92 points, or 1.38%, to close at 2,558.35 points on Wednesday. Of the 348 securities traded, prices of 252 companies declined, while 23 advanced and three remained unchanged.

The hydropower sub-index fell 2.84%, while the non-life insurance sub-index recorded the steepest decline, dropping 3.90%. Investors have been particularly cautious about companies directly affected by the flood.

Shares of Rasuwagadhi Hydropower and Mailung Khola Hydropower hit the lower circuit, falling around 15% each. Rasuwagadhi Hydropower’s 111-megawatt project suffered major damage, with the flood reportedly washing away its dam.

The Nepal Electricity Authority has reported damage to around a dozen hydropower projects in the affected areas. Concerns over the financial impact of the damage have put additional pressure on the shares of affected companies.

Non-life insurers have also come under heavy selling pressure. Flood damage to hydropower projects, vehicles, infrastructure and goods being imported into Nepal could result in substantial insurance claims. Investors appear concerned that insurers could face unexpectedly large liabilities as a result of the disaster.

Chilime Hydropower recorded the highest turnover of the day, with shares worth NRs 205.6 million changing hands. Its share price fell 10.12% to NRs 427. Sanima Middle Tamor Hydropower followed with turnover of NRs 193.2 million.

Despite the broad market decline, Sarbottam Paints gained 15% to NRs 1,212.90, the day’s strongest advance. Upper Hewakhola Hydropower also rose 10.43% to NRs 667.

Overall trading turnover increased to NRs 4.77 billion, compared with about NRs 4.10 billion on Tuesday. The broad-based decline reflects growing investor concern over the potential financial consequences of the Bhotekoshi flood, particularly for hydropower companies and insurers exposed to the affected assets.