KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The financial and economic landscape in Nepal has shown mixed performance across various sectors.
The NEPSE Index declined by 51.37 points (1.91%) to close at 2,630.91, continuing a downward trend from the previous session, with a noticeable decrease in market capitalization, reflecting weak investor sentiment.
Meanwhile, government revenue and expenditure for FY 2024/25 have also underperformed, with only 28% of the annual revenue target collected and 30% of the budget spent by mid-December.
Capital expenditure has been particularly sluggish, with just 11% of the allocated amount utilized.
On the commodities front, gold prices saw a modest increase of Rs 400 per tola to Rs 151,200 after a recent dip, but the market remains volatile with fluctuations in recent weeks.
In the corporate sector, Shivam Cements proposed a 9% dividend, including bonus shares and cash, as part of its annual shareholder payout.
Additionally, commercial banks revised their interest rates for the month of Poush, with NIC Asia offering the highest rate for fixed deposits at 6.6%, while Laxmi Sunrise Bank recorded the lowest at 5.5%. In the telecom sector, Nepal Telecom expanded its reach with a new tower in the remote Palanta village of Kalikot, enhancing connectivity for the rural population.
Overall, the economy and markets are experiencing fluctuations, with mixed trends in government performance, corporate activity, and commodity prices.
NEPSE Index drops 51.37 points, closes at 2,630.91
The NEPSE Index experienced a significant decline on Monday, falling by 51.37 points (1.91%) to close at 2,630.91, extending the losses from the previous session, which saw a dip of 33.42 points.
The market opened at 2,684 and saw fluctuations throughout the day, reaching a high of 2,684.32 and a low of 2,622.76. The day’s total turnover amounted to Rs. 5.93 billion, with 67,648 transactions involving 12,745,777 shares from 304 companies.
Market capitalization decreased to Rs. 4.36 trillion, while the float market capitalization was recorded at Rs. 1.44 trillion, indicating a decline in overall market activity and investor sentiment.
Capital Expenditure at 11% and Revenue Collection at 28%
Both the government’s income and expenditure have been weak in the first five months of the current fiscal year 2024/25.
As of December 15, the government has collected 28% of its annual revenue target while spending around 30% of its budget, according to data from the Office of the Comptroller General.
The data reveals that development expenditure has been particularly sluggish. For the current fiscal year, Rs 352.354 billion was allocated for capital expenditure, but only Rs 40.8006 billion (11.58%) has been spent so far.
Gold prices sees modest increase
Gold prices saw a slight recovery today, increasing by Rs 400 per tola to reach Rs 151,200, following a drop of Rs 2,200 on Sunday, when the price had fallen to Rs 150,800.
Despite this modest rebound, silver prices remained steady at Rs 1,840 per tola. Gold prices have been volatile recently, having risen by Rs 4,500 last week before experiencing declines of Rs 2,200 on Sunday and Rs 1,200 on Friday.
This follows a sharp drop of Rs 18,500 per tola three weeks ago, highlighting the ongoing fluctuations in the precious metals market.
Shivam Cement proposes 9% dividend
Shivam Cements Limited has announced a 9% dividend for the fiscal year 2080/81, with plans to hold its Annual General Meeting (AGM) on Poush 29, 2081.
The company’s board of directors, in its 133rd meeting on Mangsir 27, proposed an 8.55% bonus share distribution worth Rs. 42.98 Crores and a 0.45% cash dividend, amounting to Rs. 2.26 Crores (for tax purposes).
With a paid-up capital of Rs. 5.02 billion, the book closure date is set for Poush 17, meaning that investors holding shares before this date will be eligible for the dividend and can participate in the AGM.
Banks update interest rates
Commercial banks in Nepal have updated their interest rates for the month of Poush, with some raising their rates, others lowering them, and most keeping them unchanged compared to Mangsir.
Out of the 20 commercial banks, 14 have maintained their maximum interest rates on individual term deposits from the previous month, while three banks have reduced their rates, and three others have increased them.
NIC Asia Bank offers the highest interest rate for individual fixed deposits in Poush, with a rate of 6.6%, although this marks a decrease of 0.19 percentage points from the previous month.
On the other hand, Laxmi Sunrise Bank offers the lowest rate, with a maximum of 5.5% for the month.
NT reaches in remote Palanta village in Kalikot
Nepal Telecom has launched its services in the Palanta rural municipality in Kalikot with the installation of a new communication tower.
The NT tower, located at Palanta-4, aims to improve connectivity in an area that was previously disconnected from telecommunication services.
According to Prem Singh Bista, the head of the Kalikot Telecommunication Office, the tower is expected to provide communication services to around 10 per cent of Palanta population.
He added that the service will eventually extend to rural municipalities 2, 3, 4, 5, and 6, and will also reach Pachaljharana rural municipality.
(Prepared by Srija Khanal)
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