KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Recent developments across Nepal highlight varied economic activities and challenges.
The Nepal Stock Exchange (NEPSE) recorded a slight decline of 4.62 points after a previous increase, reflecting mixed investor outcomes with profits in 95 companies and losses in shares of 141 companies.
Trading concluded with 10 companies’ share prices unchanged, and total transactions amounted to Rs 4.57 billion. Concurrently, domestic gold prices dropped by Rs 400 per tola, settling at Rs 145,000 for fine gold and Rs 144,700 for standard gold, while silver prices remained stable at Rs 1,890 per tola.
These shifts were influenced by global economic conditions, emphasizing ongoing volatility in the commodities market amidst local and international uncertainties.
NEPSE declines by single digit
The Nepal Stock Exchange (NEPSE) experienced a slight decline, dropping by 4.62 points on Monday, marking the second trading day of the week. This followed a previous increase of 21.27 points on Sunday, the first trading day of the week.
During Monday’s trading session, investors saw profits in 95 companies while experiencing losses in shares of 141 companies. The share prices of 10 companies remained unchanged throughout the day.
A total of 10,475,181 shares were traded, amounting to Rs 4.57 billion in transactions.
Among notable movements, investors in Samaj Microfinance gained the highest profits, contrasting with those in Mailung Khola Hydropower who faced the most significant losses.
NRB presents five-point plan to tackle financial cooperative issues
Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari has proposed a comprehensive five-point strategy to resolve ongoing issues.
In a recent meeting of the parliamentary probe special committee addressing financial cooperative mismanagement, Governor Adhikari recommended a phased approach for returning depositor savings: the first phase covers savings up to Rs 100,000, the second up to Rs 500,000, and the third for amounts exceeding Rs 500,000.
Additionally, he advocated for the formation of a dedicated group to oversee the resolution process, emphasizing the need for stricter regulatory measures and geographical restrictions on cooperative operations.
Capital expenditure at 52%, revenue shortfall of Rs 319 billion
As the fiscal year draws to a close, Nepal’s government has spent Rs 1.322 trillion, exceeding its revenue collection of Rs 1.023 trillion by Rs 319 billion.
Capital expenditure, at Rs 157.69 billion, accounts for only 52.2% of the allocated budget, while current expenses have consumed 80.93%.
The government’s total expenditure target for the year was Rs 1.751 trillion, with a mid-year review projecting an expenditure of 87.3%.
Gold prices drop; silver holds steady
The Nepal Gold and Silver Dealers’ Association on Monday reported a Rs 400 decrease in domestic gold prices, with fine gold priced at Rs 145,000 per tola and standard gold at Rs 144,700 per tola, down from Rs 144,300 per tola on Sunday.
This decline reflected current market adjustments influenced by global economic conditions, investor sentiment, and currency fluctuations.
Gold, traditionally a safe-haven asset, often experienced price volatility amidst changing economic outlooks and speculative trading.
In contrast, silver prices remained stable at Rs 1,890 per tola, suggesting a distinct market response possibly driven by different supply-demand dynamics or investor preferences.
The precision of pricing in tolas, approximately 11.66 grams, underscored the meticulousness in precious metal transactions, providing clarity amidst market fluctuations and economic uncertainties.
Department of Mines and Geology authorizes exploration of 80 mines across Nepal
The Department of Mines and Geology (DoMG) has authorized exploration activities at 80 mines across Nepal, granting mining prospecting certificates to several companies for the fiscal year from mid-July 2023 to mid-June 2024.
Additionally, permits for excavation have been issued for eight mines, while the department monitored 107 mines nationwide, revoking permits at 114 locations during the same period.
In collaboration with the Chinese government, ongoing drilling operations in Dailekh have reached a depth of 951 meters, focusing on potential petroleum reservoirs.
The DoMG also recorded over 57 earthquakes above Richter scale 4 across the country, conducting earthquake awareness programs in Barpak, Gorkha, and geological studies in Jitpur, Simara, Province 2. Furthermore, initial efforts to promote limestone mines in Surkhet have yielded revenue of Rs 587.4 million.
Floods and landslides trigger surge in Kathmandu vegetable prices
Recent floods and landslides across Nepal have severely disrupted the vegetable supply chain to Kathmandu Valley, causing prices to soar dramatically over the past two days.
According to the Kalimati Fruits and Vegetable Market Development Board, numerous crops have been inundated, leading to significant price increases for kitchen staples such as tomatoes, potatoes, cabbage, and cauliflower.
Wholesale prices at Kalimati market have surged, with some vegetables experiencing price hikes exceeding 200%. The ongoing rainfall has also slowed transportation and reduced fresh vegetable supplies to the market, exacerbating the price volatility.
Insurance policy surrenders surge to Rs 1.21 billion amid economic pressures
Insured individuals in Nepal surrendered insurance policies totaling Rs 1.21 billion between mid-May and mid-June this year, contributing to a larger trend where 98,136 policies worth Rs 11.91 billion were surrendered over the first 11 months of the fiscal year.
According to the Nepal Insurance Authority (NIA), economic slowdown pressures likely escalated surrenders, particularly as individuals seek to address tax obligations towards the fiscal year-end.
Policies typically cannot be surrendered until three years of premium payments have been made, and life insurance policies must mature for at least five years.
Nepal Life Insurance Company recorded the highest withdrawals at Rs 2.71 billion during this period, followed by Rastriya Beema Company, National Life Insurance, Asian Life Insurance, and Surya Jyoti Life Insurance.
Despite the rise in surrenders, overall premium collections across Nepali insurers grew by six percent to Rs 170.32 billion in the review period, with life insurers seeing a 7.40 percent increase to Rs 133.75 billion and non-life insurers rising by 1.02 percent to Rs 36.56 billion.
FNCCI moves to direct election for President
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has decided to elect its president through direct election, marking a departure from the previous practice where the senior vice president automatically assumed the top post.
The decision was made during a meeting of the FNCCI working committee on Monday, where amendments to the statute were unanimously passed.
According to FNCCI President Chandra Prasad Dhakal, the new amendment will come into effect after the current vice president serves as president, and it introduces two senior vice presidents alongside the direct election of the president.
Minor fluctuations in foreign currency exchange rates
The Nepal Rastra Bank announced foreign currency exchange rates for Tuesday, showing minor fluctuations compared to yesterday. The US dollar’s buying rate rose to 133 rupees 30 paisa and selling rate to 133 rupees 90 paisa, slightly higher than yesterday’s 133 rupees 28 paisa and 133 rupees 88 paisa, marking stability after three days.
The Euro’s rates shifted to 144 rupees 35 paisa for buying and 145 rupees for selling, down from yesterday’s 144 rupees 45 paisa and 145 rupees 10 paisa respectively. The British Pound’s rates increased to 170 rupees 96 paisa for buying and 171 rupees 73 paisa for selling, compared to yesterday’s 170 rupees 73 paisa and 171 rupees 50 paisa. Today’s rates reflect various fluctuations in the foreign exchange market.
(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.
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