NEPSE Weekly Update: Market Falls as IPOs and Dividends Drive Investor Focus

NEPSE Market Overview: Weekly Performance Analysis

During the review period, the NEPSE Index declined by 0.90 percent, shedding 23.80 points to close at 2,607.37 points. In comparison, the benchmark index had ended the previous week at 2,631.17 points. The downturn reflects weakening confidence in the Nepal capital market, especially among short-term traders.

Total market turnover dropped by 2.43 percent to Rs 20.99 billion, signaling reduced trading enthusiasm. As a result, market capitalization of NEPSE declined by nearly Rs 40 billion, settling at approximately Rs 4.377 trillion.

From a sector-wise NEPSE analysis, only the Manufacturing and Processing sector and the Life Insurance sector posted weekly gains. In contrast, finance companies and microfinance institutions suffered the sharpest losses. In terms of trading volume, Ngadi Group Power emerged as the most traded stock, while Swastik Laghubitta recorded the highest price appreciation of the week.

IPO and FPO Updates in Nepal Share Market

The primary market in Nepal remained active after December 7, driven by several IPO and FPO announcements. The highlight of the week was the strong response to Reliance Spinning Mills IPO.

Reliance Spinning Mills Limited closed its IPO for Nepalis working abroad on December 11, 2025. The company issued 115,596 shares at a premium price of Rs 820.80 per share, drawing significant attention from foreign employment-based investors.

Meanwhile, the Solu Hydropower IPO allotment was completed on December 10. Through a lottery system, 25,894 applicants received 10 shares each, while 37,053 applicants were allotted 20 shares each.

Salapa Bikas Bank opened its IPO for migrant workers on December 11, while Bhujung Hydropower announced plans to issue shares to project-affected locals and foreign-employed Nepalis starting December 18 (Poush 3). In addition, SY Panel Nepal shares were officially listed on NEPSE, expanding the manufacturing segment of the exchange.

Dividend Announcements by Listed Companies

Several NEPSE-listed companies announced dividends from their previous fiscal year earnings, providing selective support to long-term stock investors in Nepal.

Siddhartha Premier Insurance proposed a 25 percent cash dividend for FY 2081/82. Kutheli Bukhari Small Hydropower announced a 10 percent bonus share, while IME Life Insurance declared a 10.52632 percent cash dividend.

Kamana Sewa Bikas Bank successfully listed its 10 percent bonus shares on NEPSE. On the other hand, Aarambha Chautari Laghubitta decided not to distribute dividends this year. Nepal Life Insurance stood out with a combined 21.05 percent dividend, comprising 16.05 percent cash and 5 percent bonus shares.

Stock Analysis and Financial Performance Update

The latest financial performance of banks and microfinance institutions revealed mixed results. According to data released by Nepal Rastra Bank, commercial banks in Nepal earned a cumulative profit of Rs 19.37 billion by mid-November (Kartik end) of the current fiscal year.

Global IME Bank topped the list with a net profit of Rs 2.51 billion, followed closely by Nabil Bank at Rs 2.46 billion and Prime Commercial Bank at Rs 1.58 billion. However, due to ongoing economic slowdown in Nepal, the overall net profit of banks and financial institutions declined by 14.71 percent.

In contrast, the microfinance sector delivered exceptional growth. Mahuli Laghubitta reported a staggering 7,563 percent surge in net profit during the first quarter. Similarly, Deprosc Laghubitta posted a 197.44 percent profit growth, reaching Rs 202.2 million.

From a technical analysis of NEPSE stocks, Upper Syange Hydropower is currently undergoing resistance level testing, indicating a potential breakout or reversal depending on broader market sentiment.

Macroeconomic Factors Impacting the Nepal Share Market

Several macroeconomic indicators continued to influence the Nepal stock market outlook after December 7. The US dollar exchange rate hit a historic high of Rs 144.37, increasing pressure on Nepal’s import-dependent economy.

At the same time, gold prices in Nepal surged to Rs 256,600 per tola, while silver prices climbed to Rs 3,905 per tola, attracting investors toward safe-haven assets instead of equities.

Although loan interest rates in Nepal declined to a record low of 8.7 percent, private sector credit growth remained sluggish, limiting positive momentum in the secondary market.

Conclusion: Outlook for NEPSE Investors

In summary, the week from December 7 to December 12, 2025 reflected a cautious phase for the Nepal stock market. While falling interest rates, active IPO issuance, and generous dividend declarations offered selective opportunities, weak investor confidence and macroeconomic pressures continued to weigh on the NEPSE Index. Market participants are expected to remain selective and data-driven in the weeks ahead.