NEPSE's Two-Month Rally Sees Index Surge from 1800 to 2000 Levels, Yet Banking Sector Faces Decline Amidst Overall Surge

In the wake of the first quarterly monetary policy review on Mangsir 22, the Nepal Stock Exchange (NEPSE) has undergone a remarkable upswing. Showcasing a notable surge over the two months' trading days initially ascending from the 1800 levels to the impressive 2100 levels, the NEPSE Index experienced a brief downturn in the past couple of days, subsequently settling around the 2020 levels.

Despite the fluctuations in the overall NEPSE Index, a discerning analysis reveals that the Commercial Bank sub-index has remained relatively stable during this period. The resilience displayed by the Commercial Bank sub-index stands out amidst the market's dynamic shifts.

Over the span of two months, the NEPSE Index exhibited a noteworthy ascent, with an increase of 196.69 points, reflecting a positive change of 10.77%. This positive trajectory unfolded from the November 5 closing level of 1,826.23 to the January 07 closing level of 2,022.92. A detailed examination of sectoral performances highlights the Hydropower Index as the standout performer, witnessing a substantial positive shift of 28.78%. Originating from 1,907.10 levels, the index soared impressively to 2,456.02 levels within this two-month timeframe. Additionally, the Investment Index and Life Insurance Index followed suit with significant upswings, posting increases of 24.53% and 22.57%, respectively.

In contrast, closer scrutiny of the Banking Index reveals a modest decline, experiencing a 0.77% negative change during these two months of trading days. Despite the overall market's fluctuations, it is notable that the Commercial Bank sub-index has faced challenges, performing less favorably compared to its counterparts in the NEPSE sector indices.

The banking index's stagnant performance can be traced to an oversupply in the market, a consequence of commercial bank mergers that reduced the total number to 20, with 19 listed on NEPSE (excluding Rastriya Banijya Bank Limited). Despite paid-up capital varying from Rs. 9 Arba to Rs. 36 Arba, the sector is grappling with decreased investor interest, as supply surpasses demand. This shift is further fueled by investors seeking opportunities in sectors with higher demand. Additionally, adjustments for bonus shares are contributing to the subdued performance of the banking index, accentuating the challenges faced by this sector in recent trading periods. 

Here is the list of commercial banks that have proposed dividends for the fiscal year 2079/80

*Note that as of the present moment, neither ADBL nor NIMB has made any official announcement regarding the declaration of dividends for the fiscal year 2079/80.

Book Closure and Price Adjustment:

Commercial Banks Price Change:

Among the 19 commercial banks listed on NEPSE, only 7 banks witnessed positive changes in their stock prices. Kumari Bank Limited (KBL) maintained a steady value, closing at Rs. 155 as of January 7. On the other hand, Everest Bank (EBL) experienced the most significant positive change, with a surge of 8.87%, bringing its price to Rs. 503 on the same date.

Contrastingly, 11 other commercial banks observed negative changes in their stock prices. Nabil Bank Limited (NABIL) recorded the most substantial decline, with a negative change of 14.47% or Rs. 82.9, resulting in a closing price of Rs. 490 as of January 7. This diverse performance across banks underscores the varied dynamics within the NEPSE-listed commercial banking sector during this period.