NEPSE Live Market Update: Investors React to NRB’s 6-Month Investment Rule

Nepal Rastra Bank’s new circular — allowing banks and financial institutions (BFIs) to sell listed shares after six months instead of one year — has immediately energized investor sentiment across NEPSE. The policy shift, combined with the removal of the NPR 25 crore cap on share-backed (margin) loans, is being viewed as one of the most market-friendly decisions in recent times.

As trading opened today, the NEPSE index showed early signs of recovery, rising modestly after several sessions of volatility. Investors interpreted the circular as a signal of liquidity expansion and greater institutional flexibility. Banking, hydropower, and investment holding sectors led the early rebound, as institutional investors began repositioning portfolios to capitalize on short-term opportunities.

Analysts say that the 6-month investment rule will enable BFIs to engage in more dynamic trading strategies — allowing them to rebalance holdings semi-annually instead of waiting a full year. This, in turn, is expected to enhance market turnover, liquidity, and depth. Similarly, the relaxation on share-loan limits may boost margin trading, increasing transaction volume and investor activity.

However, despite the optimism, experts caution that such flexibility may also invite short-term speculation and over-leveraging. They stress that regulators must ensure robust risk-management practices to prevent instability. The real test for the market, they argue, will come when this initial enthusiasm meets fundamental realities like earnings reports, remittance trends, and NRB’s monetary policy stance.

As of mid-session, NEPSE was trading slightly higher, hovering near the 2,560-point level with mixed sentiment — buyers active in blue-chips, while smaller stocks remained subdued. Whether this momentum can build into a sustained rally will depend largely on follow-through volume in the next few sessions and institutional re-entry momentum.