Week in review: market moves modestly, NEPSE restructuring gains momentum

Week in NEPSE: November 16-20

Last week, the stock market moved within a narrow band, indicating a restrained yet noticeable upward bias. The market opened at 2,550.18 points on Sunday (November 16), dipping to 2540.18 points by the close—a minor retreat on relatively lighter turnover of NRs 3.42 billion, signaling hesitation rather than broad selling. 

Over the next two days, the index experienced a measured recovery, climbing steadily as turnover value and volume rose. However, the rally faltered, with the index again slipping on November 19 and 20. 

On the closing day, the NEPSE index closed at 2560.29 points, marking a modest growth of 0.4% in a week. Trading activity also intensified sharply as turnover value reached NRs 4.7 billion, with the volume also rising to NRs 9.5 million.

NEPSE Index Movement [November 16-20]

Market watch: News, policies, and listings 

Nepal retains ‘BB-’ sovereign rating despite September unrest

In its second sovereign ratings, which many feared would downgrade Nepal’s rating after unrest in September which involved multiple attacks on private investments, Nepal retained its previous BB- rating with a stable outlook. The rating concluded that the recent protests, followed by political uncertainty, have not affected fiscal balance or external buffers., Fitch’s assessment was based on continued strong foreign reserves, steady remittances, minimal government-guarantee debt l, and external debt carrying favorable concessional terms. However, it warns, “delays in the political transition and a more fragmented party landscape could undermine policymaking effectiveness and further weaken governance standards.”

NEPSE restructuring moves forward

A major structural development emerged this week as the government revived NEPSEs long delayed restructuring plans. . The government has decided to form a five-member committee, headed by Prakash Jung Thapa, former chairperson at Accounting Standard Board,. The committee will also include representatives from NEPSE, NRB and SEBON. They have 50 days to submit their recommendation. 

Reportedly, the recommendation committee will evaluate and recommend on long-standing issues like raising the country’s sole stock exchange’s capital, taking NEPSE public, and partial share divestment to the private sector. NEPSE’s current ownership entails Nepal Government (58.66%), Rastriya Banijya Bank (11.23%), Employees Provident Fund (10%), NRB (9.5%), and Laxmi Sunrise  and Prabhu Bank (5% each), and broker companies (0.6%). 

Nabil bank to issue first ‘Perpetual Non-cumulative Preference Share’

SEBON last week permitted Nabil Bank to issue "Nabil 8% Perpetual Non-cumulative Preference Share", which will be the first time such debenture will be issued in Nepal. These preference shares cannot be repurchased by the company. The step marks a significant step in the banking sector’s capital raising strategy. 

Trading spotlight: IPOs and listed shares

One new company: Jhapa Energy Limited (JHAPA), a renewable energy company currently operating a 10-MW solar power plant in the Jhapa district, made its market debut on NEPSE on November 14. The listing follows a heavily oversubscribed IPO by over 38.38 times, despite its rating downgrading to B- rating, signalling elevated repayment risk.

After its listing, JHAPA surged sharply, reflecting the optimistic momentum that often characterises the newly-listed renewable energy shares. The stock opened at 293.4 price on debut, only to climb over subsequent trading sessions, eventually closing at 455.5 price, showcasing a cumulative gain of 55.24%.

Last week, Bungal Hydro (BUNGAL), Bandipur Cablecar and Tourism (BANDIPUR), and Swastik Laghubitta (SWASTIK), all achieved significant growth. 

BUNGAL opened at 451.3, extending its rally at intraweek high as 647.6, before a slight decline only to moderately close at 589 on its last trading day with a turnover of NRs 92,764,782. 

BANDIPUR and SWASTIK maintained their upward trajectory, continuing last week's bullish trend. BANDIPUR surged this week opening at 386.7, only to close at 610.5, marking a growth of 57.8%. Similarly, SWASTIK stocks this week rose from 433.2, while achieving a growth rate of 20.86%, only to close at 523.6.

Just a day later, Shreenagar Agritech (SAIL) was listed on the exchange. Trading begins this week. It will be interesting to see how SAIL will perform and influence the rising manufacturing and processing sub-sector.