KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The financial and tourism sectors in Nepal exhibited notable trends during the first week of December 2024, marked by moderate fluctuations in both gold prices and the stock market.
Gold prices remained relatively stable, oscillating between Rs 149,300 and Rs 150,700 per tola, reflecting investor caution amid global economic uncertainties and rising demand ahead of the holiday season.
Similarly, the Nepal Stock Exchange (NEPSE) index experienced mixed gains and losses, with the market showing optimism early in the week but also undergoing corrective declines, reflecting investor uncertainty amid volatile global conditions.
In the tourism sector, Nepal saw a significant surge in foreign tourist arrivals, with over 114,500 visitors in November 2024, the highest in three years, driven largely by Indian tourists.
Additionally, Prime Minister KP Oli’s visit to China led to the signing of key bilateral agreements, further boosting Nepal’s international trade, infrastructure, and cooperation prospects.
These developments indicate a cautiously optimistic economic outlook, with both global and domestic factors influencing market movements and the broader economic landscape.
Gold prices in Nepal exhibit moderate fluctuations
The gold market in Nepal last week (1st December to 6th December 2024) exhibited moderate volatility, with prices fluctuating within a narrow range between Rs 149,300 and Rs 150,700 per tola, indicating a stable yet cautious market.
The price decline observed on Monday (Rs 149,300) followed by a recovery mid-week (reaching Rs 150,700 on Thursday) suggests a market adjusting to external factors like fluctuations in global gold prices, potential shifts in currency exchange rates, and domestic demand trends.
Despite these fluctuations, the overall trend remained relatively steady, with prices hovering just above Rs 150,000, reflecting both investor caution and ongoing demand for gold amidst global economic uncertainty.
Compared to the previous week, this week’s prices saw a slight increase, reinforcing the stability of the market over recent periods.
However, the marginal decline on Friday indicates that market sentiment remains sensitive to external shocks or investor sentiment, especially as we approach the holiday season, when gold demand typically rises.
Looking ahead, gold prices are likely to remain within a similar range unless influenced by significant global economic developments or changes in the value of the Nepali Rupee, highlighting the need for investors to stay alert to both domestic and international factors shaping the market.
NEPSE experiences volatility with mixed gains and losses
The Nepal Stock Exchange (NEPSE) index last week exhibited a mix of positive and negative movements, reflecting a somewhat volatile but generally stable market.
Starting at 2738.06 on Sunday, the index saw a minor decline of 0.36% on the first day, signaling a cautious investor sentiment at the week’s outset.
However, the following two days (Monday and Tuesday) showed a recovery, with the index rising by 0.72% and 0.64% respectively, reaching 2758.04 and 2775.85.
These gains suggest optimism, potentially driven by positive market sentiment or specific sector performances.
On Wednesday, the index experienced a significant drop of 0.89%, closing at 2750.87, which might indicate market corrections or a response to external factors like global economic conditions or investor profit-taking.
The trend continued on Thursday, with another decline of 0.57%, bringing the index to 2734.93, reflecting continued uncertainty or market adjustment.
The overall fluctuations highlight a market grappling with mixed investor confidence, where brief recoveries are met with corrective measures, possibly due to market volatility, external economic concerns, or sector-specific challenges.
Moving forward, the market seems to be in a phase of consolidation, with investor caution prevailing amid an environment of uncertainty.
Foreign tourist arrivals in Nepal reach 3-year high
In November 2024, Nepal recorded over 114,500 foreign tourist arrivals, the highest in three years, according to the Nepal Tourism Board.
This represents a significant increase from the 108,630 visitors in November 2023 and 72,653 in November 2022. In stark contrast, November 2021 saw just 26,135 arrivals. India emerged as the leading source of tourists, with 19,915 visitors from the neighboring country.
PM Oli’s China visit leads to key bilateral agreements on trade, infrastructure, and cooperation
During Prime Minister KP Oli’s four-day official visit to China, several important bilateral agreements were signed, following a meeting between the two leaders.
These included an Economic and Technical Cooperation Agreement, an MoU on Trade Promotion Cooperation, a protocol on the export of thermally processed buffalo meat from Nepal to China, and a Letter of Exchange on the Tokha-Chhahare Tunnel.
Other agreements covered a 2024-2029 Development Plan, cash assistance, and the completion of the reconstruction of the nine-storey Basantapur Tower.
Additionally, MoUs were signed for the provision of Volunteer Chinese Language Teachers and for collaboration between Nepal Television and China Media Group.
The visit also included discussions on enhancing connectivity, industrial and infrastructure development, and cooperation in diverse sectors such as health, agriculture, trade, tourism, investment, science, technology, sports, and disaster management.
Life and non-life insurance sectors report premium collections
Insurance companies have intensified efforts to boost their premium collections. As of the end of Kartik in the fiscal year 2081/82, life insurance companies had gathered a total premium of Rs 53.39 bilion from 13,349,157 active policies.
According to the Nepal Insurance Authority’s report, Nepal Life Insurance Company (NLIC) emerged as the leader, collecting Rs 15.4 billion from 1,662,403 active policies as of Kartik 2081.
A notable highlight came from Reliable Nepal Life Insurance Co Ltd, which recorded the highest number of active policies—2,514,187. However, the company generated just Rs. 1.55 billionin premiums during the same period.
(Prepared by Srija Khanal)
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