Stocks slide again dropping to 2,601, SEBON commits to reform

The stock market extended its losing streak on Thursday, with the benchmark NEPSE index falling 19.67 points to close at 2,601.92. The decline followed a sharp drop of more than 30 points a day earlier, while trading activity also weakened amid continued uncertainty among investors.

The total turnover stood at NRs 4.61 billion, down from Rs 4.82 billion on Wednesday. During the session, 87.51 million shares of 361 listed securities changed hands.

Market sentiment remained weak throughout the trading session. Shares of 229 companies declined, while 42 companies gained and six remained unchanged.

All major sectoral indices ended in negative territory. The Trading sector led the decline, falling 2.36%, followed by Manufacturing and Processing (1.19%), Development Banks (1.11%), Investment (0.95%), Hotels and Tourism (0.76%), Hydropower (0.70%), Microfinance (0.69%), Non-life Insurance (0.66%), Life Insurance (0.61%), and Banking (0.50%).

Limited gains amid broad-based decline

Despite the overall market weakness, some companies recorded gains. Upakar Laghubitta Bittiya Sanstha posted the highest increase, rising 12.68%, while the recently listed Snow Rivers gained 11.76%. Janutthan Laghubitta and Trishuli Hydropower also advanced by 3.09% and 2.77%, respectively.

Among the major losers, Salapa Bikas Bank declined 8.28%, Three Star Hydropower dropped 7.92%, and Om Megashree Pharmaceuticals fell 5.76%.

Debt instruments dominated the turnover list. The debenture of Global IME Bank Limited recorded the highest transaction volume, with shares worth Rs 355.8 million traded. The 10.75% SBL Debenture 2089 followed with turnover of Rs 286.5 million.

Investor confidence remains fragile

The latest decline came after Nepal Rastra Bank unveiled its monetary policy earlier this week. Investors have expressed uncertainty over the policy provision that allows share-backed lending limits to be determined based on the financial strength of individual institutions.

Currently, banks provide margin loans of up to 70% of the lower value between a stock’s 180-day average price and its current market price.

Market participants also pointed to year-end financial pressure as another factor behind the selling trend. With banks seeking loan repayments before the fiscal year closes, some investors may have increased share sales to arrange funds for principal and interest payments.

Government assurances fail to revive market sentiment

The market also failed to respond positively to Prime Minister Balendra Shah’s recent meeting with private-sector representatives.

The meeting had raised expectations that government assurances to address concerns of entrepreneurs and businesses would improve investor confidence. However, the market moved in the opposite direction, indicating that investors remain cautious.

Since the formation of the current government, NEPSE has fallen by over 359 points, declining from 2,960 points on March 24 to the current level. The prolonged downturn has significantly reduced market capitalisation. 

SEBON prepares capital market development roadmap

Amid growing concerns over the market downturn, the Securities Board of Nepal (SEBON) has announced plans to introduce a comprehensive capital market development roadmap.

Issuing a press release on Thursday, SEBON said it is working on measures to address market-related issues and strengthen investor protection. The regulator plans to unveil a time-bound action plan within a week and begin implementing reforms immediately.

The proposed measures include improving the implementation of margin trading, streamlining public share issuance procedures, and reviewing existing securities laws, regulations, and corporate governance guidelines.

SEBON has urged investors to avoid making investment decisions based on rumors or speculation and instead rely on proper research, market analysis, and their own risk-taking capacity.

The regulator said it is working on both policy and structural reforms aimed at building a more stable, transparent, and efficient capital market.