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🇳🇵 Nepal /Economy & Trade

Flood sends hydropower shares tumbling, but damage remains concentrated

From Kathmandu Post · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Ongoing story
  • Flooding in three Nepal districts affected about a dozen hydropower projects and related facilities, including roughly six owned by companies listed on the Nepal Stock Exchange.
  • Nepal’s hydropower sub-index fell about 65 points after the floods, while the broader NEPSE index declined by around 16 points.
  • Analysts and company officials said most listed hydropower projects suffered no direct physical damage, leaving investors to distinguish project-specific losses from wider sector risk.

The Bhotekoshi River’s surge through Rasuwa, Nuwakot and Dhading damaged roads, bridges and hydropower facilities, then sent anxiety through Nepal’s stock market. Hydropower shares fell alongside insurance stocks as investors tried to estimate potential repair costs and claims.

The physical damage, however, remains concentrated. Around a dozen hydropower projects and related facilities were affected along the Bhotekoshi and Trishuli rivers. Only about half a dozen belong to companies listed on the Nepal Stock Exchange. The listed firms with directly affected projects include Rasuwagadhi Hydropower, Chilime Hydropower, Mailung Khola Hydropower and Trishuli 3B Hydropower.

Even so, the hydropower sub-index has dropped by about 65 points since the floods, compared with a roughly 16-point decline in the overall NEPSE index. Non-life insurance, life insurance and the market’s “other” category also weakened. The broad selloff suggests investors are reacting not only to confirmed damage, but also to uncertainty about what further losses may emerge.

The flood was unprecedented, so it was natural for investors to panic initially.

· Bharat RanabhatThe former president of the Stock Brokers Association of Nepal described the initial market reaction.

“ The flood was unprecedented, so it was natural for investors to panic initially,” said Bharat Ranabhat, a former president of the Stock Brokers Association of Nepal. “But the damage to a few projects does not mean the entire hydropower sector is at risk.”

Hydropower accounts for about 17.5 percent of Nepal’s total market capitalisation. Of 302 companies listed on NEPSE as of July 16, 111 were hydropower firms. Banking, financial services and insurance companies together represented another 51.8 percent of market capitalisation, making shocks in either group capable of affecting the wider market.

Niranjan Phuyal, chief executive of NRN Infrastructure and Development Limited, said available information indicated that only around six listed hydropower projects in Rasuwa and Nuwakot had been directly affected. The eventual financial impact will depend on whether dams, headworks, powerhouses, access roads or transmission lines were damaged, and how quickly each facility can return to operation.

But the damage to a few projects does not mean the entire hydropower sector is at risk.

· Bharat RanabhatRanabhat cautioned against treating damage to several projects as a threat to the entire sector.
About this summary

Originally published by Kathmandu Post in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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