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The Nepal Stock Exchange (NEPSE) plunged by 16. 67 points to close at 1,871.88 points on Monday. Similarly, the sensitive index dropped by 3. 05 points to close at 352. 71 points. A total of 2,829,426-unit shares of 260 companies were traded for Rs 920 billion. Meanwhile, Kalinchowk Darshan Limited was the top gainer today with its price surging by 10. 00 percent. Likewise, Prabhu Bank Debenture was the top loser with its price dropped by 10.00 percent. At the end of the day, the total market capitalization stood at Rs 2. 71 trillion.

The cabinet expansion and the appointment of a new finance minister have failed to lift the confidence of stock market investors. The Nepal Stock Exchange (Nepse) plunged by double-digit on Sunday, the first trading day of the week. Prime Minister Pushpa Kamal Dahal on Friday expanded the cabinet, inducting 11 ministers, in which Nepali Congress leader Dr. Prakash Saran Mahat was given the Finance Ministry portfolio. Unlike the appointment of Bishnu Poudel as finance minister in December 2022, the appointment of Dr. Mahat has received a cold response from the share market. The benchmark index fell by 20 points on Sunday. On the contrary, when Poudel took charge of the Finance Ministry on December 27, 2022, the Nepse index surged by 59.87 points. During Poudel’s tenure, the stock market had risen by 427 points. And, the market lost 180 points following his exit from the Finance Ministry. On Sunday, the benchmark index had again fallen below 1900 points as the Nepse index closed at 1888.55 points. On Sunday, the Nepse opened at 1,910.49 points and hit an intraday high of 1,928.66 points before rising to the intraday low of 1,883.04 points and settling at 1,888.55 points. The Nepse recorded a daily turnover of Rs 1.20bn on Sunday which was slightly higher than Thursday. The stock market has been on a downward spiral after the mid-term review of the monetary policy and the central bank tightening the dividend distribution of microfinance institutions (MFIs). Along with the daily turnover, the number of trade shares also increased on Sunday. The number of shares traded decreased to 3.78 million scripts from 2.75 million on Thursday. Kumari Bank Promoter Shares were traded the most on Sunday while NIC Asia Bank recorded the highest turnover of Rs 50.5 million. All the sub-indices turned red on Sunday with the trading sub-index losing the most. On Sunday, Kalinchowk Darshan Limited, Citizens Mutual Fund-1, Jeevan Bikas Laghubitta, NIC Asia Flexi CAP Fund, and Swet-Ganga Hydropower & Construction Limited led the market as top gainers while Swabhimaan Laghubitta, Prabhu Bank Debenture 2087, Kalika Laghubitta, Vijaya Laghubitta, and Maya Khola Hydropower Company were the top losers. Top Five Gainers 

A committee formed by the board of the Nepal Rastra Bank (NRB) to identify and resolve the problems concerning microfinance institutions (MFIs) has sought feedback from the public. The committee headed by NRB Executive Director Prakash Kumar Shrestha, who is the Chief of the Economic Research Department of the central bank, issued a notice on Sunday for feedback to be submitted by May 3. As protests erupted over alleged excesses by MFIs in various parts of the country, the central bank decided to form the committee which has been mandated to identify the problems and make necessary recommendations by mid-July this year. A committee member said that the problems appear to have arisen mainly due to multiple banking by MFIs to the single borrower. “Even though many borrowers have complained about the high borrowing rate, it should not be a big issue as the MFIs cannot charge interest rates exceeding 15 percent,” the committee member said. Because of the cap imposed by the central bank, MFIs could not raise the interest rate beyond 15 percent despite the rise in the cost of funds sharply amid the liquidity crunch. Borrowers who protested against the alleged misconduct of MFIs claimed that the institutions have been charging exorbitant interest rates, high service charges, and misbehaving with the borrowers. But promoters and high officials of MFIs have been rejecting the accusations of charging high interest rates while admitting that multiple banking transactions might have taken place. “Profit motives of many MFIs and a high target of lending assigned to the staffs might have led to multiple banking,” the committee member said. Many borrowers had managed to pay the loans in the past despite taking multiple MFIs in the past. But because of the closure of the businesses caused by the Covid-19 pandemic, they could not pay the loans immediately, but their liability continued to grow as cash flow halted due to the closure of the businesses, say officials of NRB and MFIs. With the borrowers failing to pay the loans, MFIs are being compared to loan sharks who charge very high interest rates for the money loaned informally to borrowers. With controversial businessperson and hospital owner Durga Prasain calling for physical attacks against the employees of the banks and financial institutions, a number of offices of MFIs and their staff faced physical assaults and vandalism in recent weeks.  

The price of gold has dropped by Rs 600 per tola in the domestic market on Monday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 108, 000 per tola today. The yellow metal was traded at Rs 108, 600 per tola on Sunday. Meanwhile, tejabi gold is being traded at Rs 107, 500 per tola. It was traded at Rs 108, 100. The price of silver has dropped by Rs 20 and is being traded at Rs 1, 390.