Nepse Index Experiences Volatility as SEBON Gains Green Light for New Stock Exchanges and Brokers - Will the Nepalese Market Rebound?

The Nepal Stock Exchange (Nepse) index has been on a bit of a roller coaster lately, slipping by 14.67 points or 0.77 per cent in the trading week between April 23 and 27 to retreat below the 1,900-point threshold. It's not all bad news though, as the Securities Board of Nepal (SEBON) has finally been given the green light to distribute licenses for opening new stock exchanges, commodity exchanges, and new stock brokers. This move is expected to bring in healthy competition, making use of digital technology, intraday trading, auction markets, and short selling.

But not everything is as rosy as it seems. Tighter policies from the Nepal Rastra Bank have hindered growth, and resistance from parliamentarians has affected investor sentiment despite the apex court ruling in favour of SEBON. Furthermore, fundamental investors have been kept at bay due to unchanged interest rates, a risk-weighted average of 150 per cent, and a loan limit of Rs 120 million for shares. All of these issues have resulted in a slowdown in the turnover of shares.

However, there is still hope for the market. Analysts are hopeful that the upcoming Monetary Policy will address these issues and introduce policies that favour the growth of the capital market. With the establishment of new stock exchanges and an increase in the number of brokers, the market is sure to pick up momentum again.

During the review week, 12.44 million shares worth Rs 4.05 billion were traded through 137,674 transactions. The sensitive index, which measures the performance of class 'A' stocks, dropped by 0.56 per cent to 361.09 points, while the float index, which gauges the performance of shares actually traded, fell by 0.77 per cent to 132.36 points. Despite this, there were some bright spots, with hotels and tourism, mutual funds, and development banks all making gains.

All in all, it's been an eventful week for the Nepse index, with its ups and downs, twists and turns. But with the potential for new stock exchanges and increased competition, there's no telling what exciting developments lie ahead for investors in the Nepalese stock market.