Market Sentiments and Investor Perspectives: Assessing the Impact of NRB's Monetary Policy Review on Stock Market

The recent monetary policy review by Nepal Rastra Bank (NRB) for the first quarter of the fiscal year 2080/81, released on Friday, Mangsir 22, has sparked discussions among investors regarding its potential impact on the Nepalese stock market. In a conversation with Tulsiram Dhakal, President of the Nepal Investors' Forum, and Rajkumar K.C, Director of NEPSE Alpha, distinct perspectives emerged concerning the repercussions of the monetary policy on the market.

Tulsiram Dhakal expressed optimism about the immediate effects of the monetary review. Notably, the NRB reduced the risk weight of all real estate types held by banks and financial institutions, and the risk associated with share mortgage loans exceeding Rs. 50 lakh has been lowered to 125%. Dhakal emphasized that, despite the reduction in risk weight, he sees no need for risk weight. Given the current low market levels and decreased bank rates, he asserted a positive outlook for the market. Dhakal suggested that the market might experience an upward trajectory, potentially reaching 2200 levels. Presently, the market is situated at 1800 levels.

On the other hand, Rajkumar KC provided a nuanced perspective, distinguishing between short-term and long-term investments. He acknowledged the positive impact of Friday's monetary review on short-term investments. However, KC cautioned that several factors need consideration for long-term investments. With numerous companies recently listed in the stock market, he emphasized that a comprehensive valuation process is yet to be undertaken. KC suggested that while short-term investments might find support in the current market conditions, the advent of favorable conditions for long-term investments is still on the horizon.

In summary, the opinions of Tulsiram Dhakal and Rajkumar KC present a balanced evaluation of the impact of the recent monetary policy review on the Nepalese stock market. While Dhakal foresees immediate positive changes with a potential market upswing, KC advocates a more cautious approach to long-term investments.