NEPSE retreats as the banking and finance sector weakens

Week in NEPSE: Dec 7 - 11

This week, the NEPSE index slipped into the red.

The trading floor opened at 2,629.69 on Sunday (Dec 7) and closed slightly lower at 2604.62 on Wednesday (Dec 11),  building on last week’s decline. Daily highs and lows stayed within a narrow range, with the peak of 2,636.97 on Sunday and the trough of 2,596.7 on Wednesday.
 

NEPSE price movement [Dec 7- 11]

Turnover volume tells a similar tale. 

Sunday saw the highest activity at NRs 5.33 billion, the momentum gradually fell to NRs 3.73–3.75 billion midweek, only to collapse at just NRs 3.49 billion on Thursday.

In short, the NEPSE showed a gradual decline, as prices and market turnover dropped.

Index highlight

The recent week (Dec 7-11) closed with a gentle retreat at the NEPSE. While all the major indices fell marginally, the sensitive-float index faced the most noticeable drop, which suggests that freely traded large capital-based listed shares bore the brunt of the market weakness.

Index Performance (% change)

On the contrary, several stocks, including MABEL, SAGAR, and BUNGAL, that had shown consistent growth weeks prior experienced notable declines this week, marking a reversal in sentiment. MLBBL and HIMSTAR featured repeatedly among the top losers, with declines ranging from 2% to over 9%, while MKCL and TSHL also slipped after earlier rallies.

Trading spotlight: IPOs and listed companies

Reliance Spinning Mills opens IPO for Nepalese working abroad

Reliance Spinning Mills, one of Nepal’s largest spinning mills, opened its foreign-employment IPO allotment on December 8th, offering 115,596 shares to Nepali citizens working abroad. The shares were priced at NRs. 820.8 each, 10% discount from the institutional cut-off price of NRs. 912, in line with SEBON’s book building procedure.

The company has faced long issues in issuing its IPO, with repeated delays due to legal and regulatory hurdles. IPO was halted on July 10, 2024, right before its issue for foreign Nepali workers, following a writ petition filed citing concerns over its undisclosed liabilities to the Nepal Electricity Authority and irregularities in the valuation of Qualified Institutional Investors (QII) allocation.

SEBON had suspended its issuance, justifying its halt on administrative grounds. However, the Patan High Court, in an interim order, stated SEBON's decision as legally invalid. On November 6th, the court dismissed all petitions, allowing the IPO process to continue with a revised prospectus for the public.

Despite the court’s ruling, SEBON delayed approval, prompting Reliance to file another writ on May 24, 2025. The court again ruled in favor of the company. On December 2, 2025, SEBON instructed the issue manager of Global IME Bank to resume its IPO.

The company, established in 1994, manufactures international-quality polyester, viscose, acrylic, and cotton in various blends, including grey, dyed, melange, and DTY yarns. Employing more than 4,000 workers, 1,300 of whom were women, it is considered one of the largest industrial employers in the country. The company also exports USD 50 million worth of goods annually, reinforcing its position as a leading player in Nepal’s textile sector.

The IPO window was opened for Nepali’s working abroad from 8th to 11th December. These shares were oversubscribed within half an hour.

Finance Minister confirms support for NRN Nepal Development Fund

A delegation from the Non-Resident Nepali Association (NRNA) met with Finance Minister Rameshwor Prasad Khanal this week to address operational challenges facing the NRN Nepal Development Fund.
Minister Khanal assured to clear regulatory hurdles to bring the fund amounting to NRs 10 billion into mobilisation. The fund will be mobilised in infrastructure development across the construction, energy, and transport sectors.
NRNs will be contributing 95% to the fund, while the government will hold the remaining 5%. The association aims to secure 85% diaspora participation in the planned IPO of the fund.

SY Panel Nepal debuts on NEPSE trading floor

This week, SY Panel Nepal successfully listed its IPO shares on the Nepal Stock Exchange (NEPSE), injecting a fresh momentum into the manufacturing and processing sector. A total of 1.3 million units of shares were registered on the stock market, including both promoter and public allocations, traded under the SYPNL symbol. The company had previously issued 40,76,156 units at NRs 100 each for the general public, on November 5, drawing strong demand throughout the subscription period.

Following the listing, SYPNL saw robust trading activity, opening at NRs 319.8 on 10 December and closing at NRs 386.8 on 11 December, reflecting a gain of nearly 10% within the week. Daily trading volumes also picked up, rising from 102,647 to 122,242 shares, signaling strong investor interest.

Independent audit firm Howaladar Yunus flags risks in 10 major commercial banks, says reports

Several reports this week have highlighted Howaladar Yunus and Co.’s preliminary briefing to the central bank on the performance and risks within commercial banks. According to these reports, the audit firm has flagged a high level of risk, including double-digit non-performing loans (NPLs) among the audited banks, confirming long-standing concerns over the evergreening practices.

NRB had appointed the Bangladesh-based audit firm to carry out an independent asset quality review of ten major commercial banks as part of Nepal’s commitments under the IMF’s Extended Credit Facility (ECF) program.

Reports suggest NRB is expected to tighten supervision, enforce corrective actions, and scrutinise executive performance.

NRB continues to absorb excess liquidity from the banking system

This week, NRB sought to absorb a total of NRs 130 billion in liquidity through deposit collection auctions for NRs 90 billion and NRs 40 billion on 7 and 10 December, respectively. The auction was extended to ‘A’, ‘B’, and ‘C’ categories of banks and financial institutions.