During today’s trading session, the Nepal Stock Exchange (NEPSE) Index concluded at 2,019.85 points, marking a significant decrease of 28.40 points or 1.38% in comparison to yesterday’s close. On Monday, the index saw a minor dip of 3.21 points.
The session commenced with an opening index of 2,047.72, briefly reaching a peak of 2,055.31 intraday. However, the market experienced a low of 2,013.37 before settling at the final value of 2,019.85 at the close.
The NEPSE index experienced a decline today, closing at 1,849.79, which marked a decrease of 38.83 points compared to the previous trading day. This equated to a loss of 2.06% in the index value. Over the course of the week, the index has witnessed a decrease of approximately 109.37 points since Sunday.
During the week, the Finance Minister, Dr. Prakash Sharan Mahat, presented the budget for the upcoming financial year, which included several new tax reforms. However, the introduction of these reforms caused some confusion and misinterpretation regarding the restructuring of the existing taxation system in the share market. As a result, panic selling occurred, leading to a decline in the market. Within just two days (Sunday and Tuesday), the market plummeted by 91.99 points.
One of the concerns raised by investors pertained to the treatment of losses incurred during stock market transactions. In response, the Director General of the Inland Revenue Department (IRD), Dirgha Raj Mainali, addressed this issue by announcing a new provision. This provision allows investors to carry forward losses for up to seven years and offers additional tax rebates after adjusting profit or loss for taxpayers. This measure is seen as a positive step to alleviate market concerns and promote investor confidence.
The new tax provisions announced by the Finance Minister include bringing FPO premiums and gains from mergers and acquisitions under the scope of taxation. However, certain sectors such as banking and financial institutions, hydro companies, and insurance companies have consistently maintained their position that such gains should be treated as investments rather than taxable profits.
The market’s decline can be attributed to the uncertainties and apprehensions arising from the new tax reforms. It is important for investors to understand and interpret the provisions accurately to avoid any unnecessary panic selling or volatility in the market. The IRD’s efforts to address investor concerns and provide favorable provisions, such as carrying forward losses and tax rebates, aim to mitigate the impact of the reforms and maintain stability in the market.
During this week, the Nepal Stock Exchange (NEPSE) operated for only four days due to the Bhote Jatra holiday on Thursday. The week concluded with the NEPSE index closing at 1,959.12, showing a gain of 81.80 points or 4.36% compared to the previous week’s closing of 1,877.32. In the previous week, the index had experienced a gain of 2.11% from the week before that.
Throughout the week, the NEPSE index recorded a high of 1,962.55 and a low of 1,866.11, resulting in a volatility of 96.44 points. Comparatively, the previous week had witnessed a volatility of 75.16 points. The fluctuation in the index indicates a certain level of market volatility and movement in stock prices throughout the trading days of the week.