Week in review: NEPSE rises; SEBON releases draft directive on margin lending

Week in NEPSE: November 23-27

The NEPSE index demonstrated a clear upward trend over the week, closing at 2676.03 points on Thursday, marking a cumulative gain of nearly 76 points from the week's opening. Daily turnover averaged  NRs six billion, reflecting steady participation from both retail and institutional investors.

From the start, the market showed a bullish trend, each trading day contributing to gradual gains. In the first two days, the close remained near the daily high, signalling strong buying pressure and minimal selling throughout the week. 

The index steadily climbed, moving from 2,600.93 points on Sunday to 2,676.03 points on Thursday, indicating a 2.9% increase. The gradual rise in both highs and lows over the week confirms that the market experienced sustained growth rather than short-term volatility.

NEPSE Index Movement [November 23-27]

Overall, NEPSE displayed a clear bullish trend, supported by robust turnover.

Market watch: News, policies, and listings

SEBON rolls out draft margin lending directive

This week, SEBON released a draft Margin Lending Directive 2025. Once approved, the directive will pave the way for investors to borrow from brokers to buy shares by pledging their holdings as collateral. 

Under the draft provisions, brokerage firms must meet stricter requirements to qualify for margin trading. They must have at least NRs 200 million in paid-up capital, along with clearing and depository memberships and any other approvals required by the stock exchange. Firms already approved by NEPSE for margin trading do not need a new licence, but they must submit documentation to comply with updated standards.

The draft allows brokers to lend up to five times their net worth. No client, or their immediate family, may receive margin loans exceeding 20% of the broker’s net worth. Firms are also responsible for ensuring sufficient diversification in their margin lending portfolios.

Meanwhile, only companies with a minimum of five million listed public shares will qualify for margin trading. Eligible firms must have a net worth at least equal to their paid-up capital, must have distributed dividends in at least two of the last three years, and must have been listed for at least two years following their IPO.

Similarly, brokerage firms are required to collect initial margin from investors based on the 180-day average price or the current market price of the shares. Shares held as initial margin, along with those purchased under margin, will be marked to market daily, though additional lending will not be allowed solely for price gains. 

Margin calls may be issued based on the client's risk, market conditions, and share-specific risks. Maintenance margin must be maintained at or above the specified minimum percentage throughout the trading period in line with market conditions.

If implemented, these rules could expand leverage trading in Nepal, providing investors with new opportunities.

Team Ventures moves towards public listing

Team Ventures, one of Nepal’s early private equity pioneers, is now going public. The company has recently appointed Siddhartha Capital as issue manager and will be floating 2.5 million shares to the public. This will mark the first PE company in Nepal to list on the stock exchange. Team Ventures' entry into the stock exchange also demonstrates the rapidly evolving landscape of alternative investments in Nepal, particularly private equity.

Founded in 2016, Team Ventures invests in growing businesses across diverse sectors with its sector-agnostic approach. The investment institution boasts a paid-up capital of more than NRs one billion and a broad base of high-net-worth individuals. 

The firm has built a portfolio across hydropower, manufacturing, agriculture infrastructure, logistics, and technology—investing in companies such as Pashupati Renewables, Upper Syange Hydropower, Bizbell, Hulas Infra, Laxmi Steels, Nepal Warehousing Company, Foodmandu, and Wiseyak Solutions.

Trading spotlight: IPO and listed companies

Shreenagar Agritech Industrial Limited (SAIL) made its NEPSE debut last Friday, signalling a milestone for Nepal’s SMEs in the manufacturing sector. The company had floated 25.10 lakh units to the public, receiving applications for over 2.02 crore units—an oversubscription by over seven times. 

SAIL is known for its poultry, cattle, and fish feed under ‘Sunaulo’ and ‘Himdana’, with an annual capacity of 135,780 metric tonnes at its Rupandehi plant. ICRA Nepal has upgraded SAIL’s issuer rating from B- to B, a grade that still signals higher credit risk but reflects marginal improvement in financial stability.

Following its listing, SAIL has maintained a strong upward trajectory in the session that followed. After opening at 301.7, the stocks have climbed steadily, hitting consecutive highs throughout the week.

Shreenagar Agritech Industrial Limited (SAIL) Index Movement

From 331.8 on November 24, SAIL surged to 441.4 on November 27 — a 32.8% rise within four trading days. Turnover expanded from NRs 81.7 lakh on November 24 to NRs 2.15 crore.

The sharp increase in turnover value suggests SAIL's initial price rise is supported by active market participation. This is an encouraging signal for an SME manufacturer that has newly entered the capital market.