Nepse posts strongest weekly gain in months as turnover jumps

The Nepal Stock Exchange (Nepse) experienced its most robust weekly performance in months, with the benchmark index climbing 76.76 points, or 2.95 percent, to settle at 2,677.54 on Friday. This surge was fueled by a significant rebound in trading activity and investor confidence, accompanied by a sharp increase in liquidity.

“

the rally was driven by optimism following discussions by the prime minister, finance minister, the Securities Board of Nepal (SEBON) and parliamentary committees on measures to support the stock market.

Weekly turnover saw a substantial jump of 48.5 percent, rising from Rs19.65 billion to Rs29.19 billion. Consequently, the average daily turnover increased to Rs5.84 billion from Rs3.93 billion. The market's total capitalization also grew by Rs140 billion, reaching Rs4.60 trillion from Rs4.46 trillion, thereby enhancing investors' wealth. The broad-based gains were reflected across all sectoral indices, with Non-Life Insurance leading at 3.76 percent, followed by Manufacturing and Processing (3.47 percent) and Investment (3.41 percent). The Banking sub-index, the largest by market weight, gained 3.21 percent.

“

the market has yet to show signs of a sustainable short-term uptrend.

Market analyst Shakti Koirala linked the rally to optimism stemming from discussions between the prime minister, finance minister, the Securities Board of Nepal (SEBON), and parliamentary committees regarding stock market support measures. He also characterized the advance as a technical rebound after a prolonged downturn. However, Koirala cautioned that the market has yet to signal a sustainable short-term uptrend, noting that the benchmark remains below its 200-day exponential moving average and continues a pattern of higher lows and lower highs.

“

many fundamentally strong stocks are trading at attractive valuations and that planned economic reforms and measures to develop the capital market could support sustained growth.

Looking ahead, Koirala expressed more optimism for the long-term outlook, citing attractive valuations for fundamentally strong stocks and the potential for planned economic reforms and capital market development measures to foster sustained growth. Market analyst Manish Aryal echoed this sentiment, highlighting SEBON's recent efforts to encourage greater investment from institutional funds like the Employees Provident Fund and Social Security Fund, which could inject additional liquidity into the market. Aryal emphasized that while these funds already participate, SEBON's intensified facilitation could bolster the current rally.

“

recent active efforts by SEBON to facilitate greater investment from institutional funds, including the Employees Provident Fund, Social Security Fund and Citizen Investment Trust, could provide additional liquidity to the market.