KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.

The Nepal Stock Exchange (NEPSE) fell by 19.76 points, closing at 2076.49, with 198 companies’ shares dropping, while significant trading activity amounted to Rs 4.05 billion on Tuesday.

Meanwhile, Kathmandu Metropolitan City has spent only 36.55% of its budget in 11 months. Gold prices remained stable, but silver saw a slight increase. Chinese airlines threatened to halt flights to Nepal over a new VAT on air tickets, potentially affecting tourism.

The government collected Rs 4.85 billion in capital gains tax from share trading in 11 months. The FAO and Agriculture and Forestry University signed an MoU to boost agricultural productivity and sustainability.

Lastly, the third IDA-21 replenishment meeting commenced in Kathmandu, discussing future funding commitments.

NEPSE declines by 19.76 points, share prices of 198 companies drop

The Nepal Stock Exchange (NEPSE) on Tuesday experienced a decline, closing at 2076.49, down by 19.76 points. The overall market capitalization also decreased slightly. Out of 247 listed companies, share prices of 198 companies fell, while 40 companies saw their prices rise.

Nine companies’ share prices remained unchanged. Despite the downturn, trading activity was significant, with 9,544,734 shares traded, totaling Rs 4.05 billion in transactions. Investors in Samaj Microfinance gained the most, while investors in Manakamana Smart Microfinance suffered the highest losses.

Kathmandu metropolis spends only 36.55% of its budget in 11 months

In the first 11 months of the current fiscal year 2080/81, Kathmandu Metropolitan City has spent only 36.55% of its allocated budget.

The metropolis had allocated a budget of Rs 24.0857 billion for the fiscal year, but as of the end of Jestha, only Rs 8.8043 billion has been spent. This leaves a remaining balance of Rs 15.2813 billion.

Within these 11 months, the highest expenditure has been in financial governance, where the metropolis allocated Rs 5.9 million and spent over 76% of it, amounting to Rs 4.527 million.

In the energy sector, out of the allocated Rs 59.6 million, nearly 70% or Rs 41.5 million has been utilized. For office operations and administrative activities, the metropolis had allocated Rs 3.43 billion, of which over 65% or Rs 2.24 billion has been spent.

Gold prices stable, silver sees modest increase

The domestic market displayed stability in gold prices on Tuesday, with fine gold maintaining its rate at Rs 142,200 per tola and standard gold unchanged at Rs 141,500 per tola.

This stable pricing suggests a balanced demand-supply scenario or a muted reaction to global market fluctuations that day.

In contrast, silver saw a modest increase of Rs 15 per tola, reaching Rs 1,815, up from Rs 1,800 per tola the previous day.

This uptick in silver prices hints at specific demand dynamics or market factors influencing silver independently from gold.

The consistency in gold prices may reassure stakeholders, reflecting a steady market environment, while the rise in silver prices prompts further analysis into the underlying reasons behind silver’s movement, highlighting the complexities of commodity pricing and the interplay of global and local market forces in the precious metals sector.

Chinese Airlines threaten Nepal flights over VAT on air tickets

Chinese airlines issued a warning to cease flights to Nepal unless the VAT on air tickets is removed, causing concern among Nepali tourism entrepreneurs aiming to attract Chinese tourists and revive the country’s tourism sector.

Pom Narayan Shrestha, chairman of the Pokhara Tourism Council, highlighted the dissatisfaction expressed by China over the VAT implementation, stressing that halting Chinese flights would significantly impact Nepal’s tourism.

Despite recent promotional efforts in Chinese cities to boost tourism, the introduction of VAT has led to increased airfares, discouraging potential visitors and diverting international tourists to other destinations.

The issue has prompted discussions between Nepali authorities and stakeholders, including Chinese airlines, aiming to resolve the dispute amid concerns about the sector’s future growth.

Govt collects Rs 4.85 billion in capital gains tax from Share Trading

The government collected Rs 4.85 billion in capital gains tax (CGT) from share trading in the first 11 months of the current fiscal year, according to CDS and Clearing Limited (CDSC).

Despite a subdued performance in the stock market due to investor caution, the highest monthly revenue of Rs 972 million was recorded between mid-January and mid-February, while the lowest amount of Rs 84.15 million was collected between mid-October and mid-November.

The market showed signs of improvement in recent months following flexible margin lending policies introduced by Nepal Rastra Bank during its mid-year monetary policy review. The total CGT collection stood at Rs 2.86 billion until mid-February, with an additional Rs 1.99 billion collected in the subsequent four months. The CGT rates vary between 5% and 10% for individual and institutional investors, respectively, depending on the duration shares are held.

FAO and Agriculture University forge partnership for agricultural advancement

The Food and Agriculture Organization of the United Nations (FAO) and Agriculture and Forestry University (AFU) in Nepal signed a Memorandum of Understanding (MoU) to collaborate on enhancing agricultural productivity, supporting farmers and farming communities, addressing climate action, and transforming agrifood systems for improved food security and nutrition in Nepal.

The partnership aimed to fostered research, knowledge exchange, technical expertise provision, and capacity building for young professionals in the agriculture sector. This partnership sought to promote sustainable agricultural practices and livelihood improvements through joint project design and implementation, knowledge development, and information exchange.

These efforts were intended to support evidence-based decision-making and policy development across agriculture, forestry, fisheries, and livestock sectors in Nepal, leveraging shared insights and technologies to achieve meaningful impacts.

IDA-21 replenishment meeting kicks off

The IDA-21’s third replenishment meeting began in Kathmandu, hosted by Nepal.

Over 200 representatives from 61 countries, including World Bank Senior Managing Director Axel Van Trotsenburg, attended the program.

Discussions focused on funding commitments for IDA countries over the next three years, alongside policy frameworks and project updates in sectors like education and energy.

Forex update

Nepal Rastra Bank (NRB) has announced today’s foreign currency exchange rates, revealing a decrease in the exchange rates of the US dollar, Euro, British pound, and Qatari riyal compared to Tuesday.

The rates are as follows: the buying rate of one US dollar is Rs 133.16, and the selling rate is Rs 133.76; the buying rate of one Euro is Rs 142.68, and the selling rate is Rs 143.32; the buying rate of one British pound is Rs 168.93, and the selling rate is Rs 169.69; the buying rate of one Qatari riyal is Rs 36.52, and the selling rate is Rs 36.68.

(Compiled and prepared by Srija Khanal)

Economic Digest is a daily morning economic digest, basically relatable summations of the most important business news, and happenings from Nepal into easy-to-understand summaries.