KATHMANDU, Sept 15: Nepal’s stock market rallied on Tuesday, with the Nepal Stock Exchange (NEPSE) gaining nearly 49 points and daily turnover reaching a two-month high following the government’s announcement of a 21-point plan to revive and strengthen the capital market.
The NEPSE index rose 48.57 points to close at 2,633.62. All sub-indices traded on the day posted gains.
The non-life insurance sub-index recorded the highest gain, rising 2.85 percent. The life insurance sub-index increased 2.60 percent, while the investment sub-index rose 2.52 percent.
Share prices of 265 companies increased on Tuesday, while 12 companies recorded losses. Dhaulagiri Laghubitta Bittiya Sanstha hit the positive circuit limit.
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Trading activity also improved significantly. After daily turnover had remained below Rs 4 billion in recent days, shares worth Rs 8.29 billion were traded on Tuesday.
This was the highest daily turnover in nearly two months. Previously, shares worth Rs 8.41 billion had been traded on June 14.
Reliance Spinning Mills recorded the highest turnover at Rs 327 million, followed by Shivam Cements with Rs 315.6 million.
The market rally came a day after Finance Minister Dr Swarnim Wagle unveiled a 21-point Capital Market Strengthening and Revival Action Plan. The plan was announced as the stock market had fallen by 376 points since the formation of the new government.
Under the plan, the government has proposed cutting the capital gains tax on share transactions by 50 percent. In the budget for the current fiscal year, Wagle had increased the tax on profits from shares held for less than one year from 7.5 percent to 10 percent. The new plan proposes reducing the rate to 5 percent.
For shares held for more than one year, the capital gains tax will be reduced to 3.75 percent.
The revival plan also proposes allowing investors to adjust losses incurred from share investments. Similarly, the investment limit for banks and financial institutions has been proposed to be maintained at 45 days, down from the current six-month period.
The plan also includes a provision allowing companies to buy back their own shares.
