Insurance and bank stocks sizzled after the newly released monetary policy narrowed the profit potential of micro-finance companies (MFIs) and investors turned towards shares of insurance companies and commercial banks as a better bet, stockbrokers said.

The insurance index jumped to an all-time high of 618.42 points and the commercial banks index surged 40.79 points on the Nepal Stock Exchange (Nepse) on Monday.

Investors were also attracted by the possibility of insurance companies hiking their paid-up capital and commercial banks posting good profits at the end of the fiscal year.

Priya Raj Regmi, president of the Stockbrokers’ Association of Nepal, said investors who had been buying shares of MFIs had started considering these two groups to be the best alternatives for them.

“In particular, the possibility of banks showing a good financial health in their annual financial report and further public offerings (FPOs) by insurance companies to hike their capital base have lured investors to these groups,” he said.

The insurance index closed at 9,292.64 points. Among the 18 insurance companies whose shares were traded on the secondary market, almost all of them gained three points each. Shikhar Insurance gained the most with 283 points. The company’s shares worth Rs62.52 million were traded.

The index of commercial banks also soared 40.79 points to close at 1,664.47 points. The group’s stocks worth Rs873.9 million changed hands on Monday.

With a rise in the indices of insurance companies and commercial banks, the Nepse also rose 40.83 points to close at 1,786.57 points. Transactions totalled Rs1.83 billion.