Index declines throughout the week despite NRB’s rate cuts

Week in NEPSE: Nov 30 - Dec 3

NEPSE experienced a slide throughout this week. 

It opened at 2,674.69 on Sunday (Nov 30), closing at 2,631.17 on Wednesday (Dec 3), posting a mild pullback of 18.35 points compared to last week’s upward run. 

Turnover mirrored this pattern. 

Sunday recorded the week’s peak turnover at around NRs 7.1 billion, but fell to the NRs 4-5 billion range in the following sessions. Total market turnover was NRs 21.26 billion while total shares traded was 42.98 million. 

The decline comes as a surprise, as the market didn’t respond as expected to the NRB’s latest monetary policy review released this Monday, which has made the borrowing cheaper and easier with interest rates expected to go down further. The central bank has cut policy rates, adjusted the upper bound of the interest rate corridor and doubled the personal overdraft limit. Perhaps the market will gradually soak in the NRB’s latest move. 

More on the policy below: 

Market watch: News, policies, and listings

NRB further slashes policy rate

This week, NRB released its monetary policy review, making some major adjustments, all with the intent to ease piling liquidity pressure in the banking system and boost credit demand. 

NRB has further cut down its policy rate to 4.25% from further from 4.5%. It had lowered the policy rate to 4.5% from the existing 5% when it announced the monetary policy on July 11. It has also reduced the upper bound of the interest rate corridor (IRC) from 6% to 5.75% while keeping the lower bound, the Standing Deposit Facility (SDF), unchanged at 2.75% to prevent a further fall in deposit rates. These moves are expected to lower the interest rates further. 

Additionally, NRB has increased personal overdraft loans from NRs five million to NRs ten million) and increased the microfinance loan limit to NRs 1.5 million from NRs 700,000. 7 lakhs to NRs lakhs) with flexibility for the repayment schedule.

Yet, despite these adjustments, investors' caution is reflected in the banking sub-index, which continues to fall this week.

Other adjustments include:

• Abolition of 1% interest rate gap between institutions and individuals' fixed deposits.
• Disaster-affected businesses can restructure or reschedule their existing loans by paying at least 10% of their outstanding interest as a one-time settlement.
• Banks are permitted to consolidate branches in metropolitan areas for efficiency
• All BFIs are required to implement anti-bribery and corruption policies, enhancing transparency and accountability

Kamana Sewa to issue ‘Perpetual Non-cumulative Preferential Share’

Following the approval to Nabil Bank to issue Perpetual Non-cumulative Preferential Shares a while ago, the Securities Board of Nepal (SEBON) has now approved the same for Kamana Sewa Bikas Bank. 

SEBON gave the green light to issue 3.5 million units of ‘KSBBL 9% Perpetual Non-cumulative Preferential Shares’, marking another addition to the list of perpetual non-cumulative preferential instruments in Nepal’s capital market. 

Trading spotlight: IPOs and listed companies

Nepal’s mutual fund market is all set to welcome a new entrant this week as Machhapuchhre Capital launches an initial offering of Machhapuchhre SIP Yojana, an open-ended mutual fund scheme.

The initial offering is for NRs 200 million, inclusive of promoters' seed capital, with 20 million units priced at NRs 10 each. Being open-ended, the fund carries no maturity period, and its units will not be listed on the secondary market. Instead, investors can buy or redeem units directly from the fund manager, at prices determined by the fund’s Net Asset Value (NAV).

Net Asset Value (NAV): The value of one unit of a mutual fund is calculated by subtracting all liabilities from the total assets (stocks, bonds, or cash) and then dividing by the total outstanding number of shares or units. In other words, NAV tells you how much each unit is worth.

On the listed front, RBB Merchant Bank successfully listed its closed-end mutual fund, RBB Focus 40 (RBBF40) on the Nepal Stock Exchange platform. A total of 120.5 million crore units at NRs 10 each will be traded under the symbol ‘RBBF40’ starting next week on 7th December 2025.