Nepal Stock Market Sees Volatility Amid Regulatory Moves and Investor Caution: Weekly Review (June 22–27, 2025)

The Nepal Stock Exchange (NEPSE) experienced a turbulent week from Ashar 8 to 13 (June 22–27), 2025, marked by fluctuating indices, reduced transaction volumes, cautious investor sentiment, and regulatory interventions. The market hovered around the psychological 2600-point mark for most of the week, reflecting uncertainty and a “wait and watch” approach by investors.

📉 NEPSE Index Movements – Day-by-Day Summary:

• Sunday (Ashar 8): The index fell by 32.93 points to close at 2,595.97, with a turnover of NPR 9.14 billion. Only 23 companies posted gains, while 225 declined.

• Monday (Ashar 9): A mild rebound of 4.78 points pushed the index to 2,600.76, though trading volume declined to NPR 6.47 billion.

• Tuesday (Ashar 10): The index dropped by 0.22 points to 2,600.53. Turnover stood at NPR 5.76 billion.

• Wednesday (Ashar 11): A marginal loss of 0.33 points brought the index to 2,600.20. Turnover increased slightly to NPR 5.94 billion.

• Thursday (Ashar 12): The index slid by 4.45 points, falling below 2600 to close at 2,595.74, with a turnover of NPR 7.78 billion.

• Friday (Ashar 13): A strong rally of 41.43 points lifted the index to 2,663.30, with all 13 sector indices in the green. Total turnover was NPR 5.22 billion.

🔍 Sector-Wise Highlights:

• Hydropower: Key driver of early-week gains, with several companies hitting the upper circuit.

• Hotel & Tourism: Continued to underperform with notable declines mid-week.

• Banking & Finance: Mixed performance; banks showed a slight uptick on Tuesday.

• Trading: Recorded the highest sectoral gain on Friday, surging by 6.9%.

📈 Top Gainers and Losers:

• Top Gainers: OMPL, GRDBL, Guras Laghubitta, Joshi Hydropower, Shri Janashil Laghubitta

• Top Losers: PURE Energy, Reliable Sambriddhi Yojana (RSY), NIC Asia Debenture, Saptakoshi Dev Bank, Kumari Sabal Yojana

🧠 Investor Sentiment and Market Psychology:

Investors adopted a cautious stance amid:

• Anticipation of the upcoming monetary policy

• Quarter-end interest payment burdens

• Awaited fourth-quarter earnings reports

Analysts described the market’s movement around 2600 points as a reflection of psychological resistance.

⚠️ Market Manipulation & Unethical Practices:

Reports by analysts and stock-focused media revealed persistent issues such as:

• Coordinated Trading: Artificial demand creation in low-float stocks

• Multiple Demat/TMS Accounts: Used to simulate buying pressure

• Insider Trading: Exploiting non-public corporate decisions

• Social Media Misinformation: Fake ‘experts’ misleading retail investors via YouTube, Facebook, and Clubhouse

• Broker Credit Overuse: High daily turnover from borrowed funds, not real liquidity

• Lack of Institutional Support: Weak mutual fund presence fails to absorb selling pressure

🏦 Regulatory & Monetary Developments:

• NRB: Announced a withdrawal of NPR 50 billion via deposit auctions to manage excess liquidity.

• SEBON: Set to tighten rules prohibiting investment companies from participating in secondary market share purchases. Also, introduced new 8-point IPO guidelines.

• Bankers Association: Requested NRB to adopt flexible loan classification, allow short-term share trading, and improve liquidity channels in the upcoming monetary policy.

• NRB Governor Bishwa Paudel: Publicized asset details including NPR 140 million in shares; also moved to ease loan restructuring for the private sector.

🆕 IPO & Right Share Updates:

• IPO Closures/Launches: Him Star Energy (closed), Darmakhola Hydropower (opened), Swastik Laghubitta (approved), Citizens Sababhahar Mutual Fund (launched)

• Upcoming Rights Issues: Chhyangdi Hydropower, Barun Hydropower, People’s Power, Asian Life Insurance

• Nabil Bank: Approved to issue NPR 3 billion worth of 7% debentures

• Pipeline Alert: 76 companies are preparing to issue IPOs under new SEBON leadership

💰 Other Financial Indicators:

• Gold & Silver Prices:

  • Gold dropped by NPR 2,900 per tola on Ashar 13.

  • Earlier in the week, it had gained NPR 500 and then dropped NPR 1,500.

• Commercial Bank Investments:

  • Banks have invested over NPR 1.4 trillion in various securities, with Rastriya Banijya Bank and Global IME Bank leading.

• Government Fiscal Activity:

  • The federal government spent NPR 9.09 billion on June 25 alone.

  • However, revenue collection lags 27% behind the target.

📌 Conclusion:

The NEPSE index remained highly reactive throughout the week, shaped by speculation, external liquidity shifts, policy expectations, and institutional inaction. Investors are now keenly watching the monetary policy announcements and company earnings that will define short-term sentiment and long-term direction.

Amid growing concerns about stock manipulation and unethical practices, analysts urge investors to rely on credible sources, conduct due diligence, and invest with a long-term outlook.