Economic Digest: Nepal’s Business News in a Snap « Khabarhub
Monday, July 15th, 2024

Economic Digest: Nepal’s Business News in a Snap

21 June 2024  

Time taken to read : 7 Minute

  • A
  • A
  • A

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) saw a significant downturn with the main index dropping 10 points, particularly affecting the life insurance sector which plummeted by 82 points, contrasting with resilience in the finance sector which gained 42.02 points.

Concurrently, gold prices surged, reaching Rs 142,800 for fine gold, amid global market fluctuations. Prime Minister Pushpa Kamal Dahal proposed involving foreign companies in managing Nepal’s international airports to address operational challenges, especially in Pokhara and Gautam Buddha International Airports.

Meanwhile, Nepal’s Tax Reform Committee recommended phasing out LPG subsidies over three years due to significant losses, alongside proposing revisions in electricity tariffs and new environmental taxes.

Lastly, due to heightened monsoon flood risks, the Melamchi Water Supply to Kathmandu Valley has been suspended to protect infrastructure, amidst ongoing efforts to stabilize operations following previous flood damages.

These reports illustrate a complex economic landscape with efforts towards stability, international collaboration in infrastructure, and environmental sustainability measures.

NEPSE faces downturn: Index drops 10 points

The Nepal Stock Exchange (NEPSE) on Thursday witnessed a substantial downturn, with the main index falling by 10 points by the close of trading.

The most pronounced decline occurred in the life insurance sector, which plummeted by 82 points. Trading activity was subdued, with 86,63,699 shares valued at NPR 3,087,074,000 changing hands in 53,017 transactions.

However, the finance sector showed resilience, recording a gain of 42.02 points, driven by increases in share prices for 11 companies, while 3 remained unchanged and 1 saw a decrease.

Overall, NEPSE reported declines across 186 companies, affecting share prices in 12 out of 13 sectors, with stability observed in 8 listed companies. Index-wise, the sensitive index dropped by 2.69 points, the float index by 0.73 points, and the sensitive float index by 0.93 points.

This downturn reflects the challenges currently faced by NEPSE amidst broader economic uncertainties, highlighting cautious investor sentiment and sector-specific vulnerabilities in the market.

Gold prices surge in Nepali market

The Nepali market saw a rise in the price of gold on Thursday, which increased by Rs 600 per tola, reaching Rs 142,800 for fine gold and Rs 141,500 for standard gold, as reported by the Federation of Nepal Gold and Silver Dealers’ Association.

This increase contrasted with Wednesday’s rates of Rs 142,200 and Rs 142,100 per tola respectively, indicating a notable fluctuation.

Meanwhile, silver was priced at Rs 1,840 per tola. These adjustments were meticulously calibrated to reflect shifts in global market conditions, underscoring the sensitivity of local prices to international trends.

The precision in daily price setting by the Federation underscored their role in stabilizing the market amidst volatile external influences, thereby shaping investor sentiment and consumer behavior in the precious metals sector.

PM Dahal proposes foreign management for three int’l airports

Prime Minister Pushpa Kamal Dahal has proposed the involvement of foreign companies in overseeing all three of Nepal’s international airports, including Pokhara International Airport.

Responding to lawmakers’ queries in the House of Representatives on Thursday, PM Dahal disclosed ongoing discussions on international partnerships for airport operations.

He expressed optimism following talks with the concerned ministry, highlighting potential benefits from foreign involvement amid operational challenges, particularly with Pokhara and Gautam Buddha International Airports facing restrictions on Indian air routes.

Nepal’s Tax Reform Committee recommends phasing out LPG subsidies

The high-level tax reform committee has proposed phasing out Liquefied Petroleum Gas (LPG) subsidies for citizens within three years, citing significant losses faced by the Nepal Oil Corporation (NOC) in this sector.

Additionally, the committee recommended revising household electricity tariffs to promote hydropower use and eliminating current LPG subsidies. It suggested implementing green taxes on aviation fuel and expanding taxes on environmentally harmful coal imports.

Furthermore, the committee advised introducing green taxes on previously excise-duty taxed goods and promoting the establishment of waste recycling centers in industries to foster a green economy, suggesting tax incentives and facilitative measures for such initiatives.

Melamchi Water Supply to Kathmandu Valley suspended

The Melamchi Water Supply Development Board has decided to halt water supply to Kathmandu Valley from the Melamchi River starting Friday due to heightened flood risks during this year’s monsoon, which could potentially damage tunnel structures with increased river water levels.

Executive Director Ratna Lamichhane explained the necessity to prevent slurry from entering the tunnel amidst rising waters. The project, inaugurated in April 2021 but disrupted by floods in June of the same year, particularly damaging key structures like the headworks at Ambathan and the sedimentation pond, has struggled to resume full operation.

As a precautionary measure since the incident, MWSDB closes the main tunnel gate annually at the onset of monsoon, only reopening it after the monsoon season concludes.

Despite aiming to supply 170 million liters daily, the board currently manages about 200 million liters. Meanwhile, the Asian Development Bank (ADB) has allocated over Rs 2 billion to reconstruct the project’s headworks, relocating them uphill from the original site, a move expected to take four years and cost approximately Rs 3 billion.

Forex: USD and Euro Surge, GBP Steadies, Qatari Riyal Gains

The Nepal Rastra Bank (NRB) has fixed the exchange rates for several key foreign currencies. According to the latest rates, the US dollar, euro, and Qatari riyal have all seen their exchange rates increase, signaling a strengthening against the Nepalese rupee. In contrast, the British pound has experienced a decline but has stabilized at a consistent level.

Specifically, the buying rate for one US dollar has risen to NPR 133.55, with the selling rate reaching NPR 134.15. For the euro, the buying rate stands at NPR 143.28, and the selling rate at NPR 143.92.

The buying rate for one British pound is NPR 169.47, and the selling rate is NPR 170.24. Meanwhile, the buying rate for one Qatari riyal has been set at NPR 36.63, and the selling rate at NPR 36.79.

These adjustments reflect the NRB’s efforts to manage currency valuations in response to economic conditions and external factors impacting Nepal’s 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.

Publish Date : 21 June 2024 08:55 AM

Indian PM Modi congratulates PM Oli

KATHMANDU: Indian Prime Minister Narendra Modi has congratulated KP Sharma

Prime Minister Oli sworn in

KATHMANDU: Prime Minister (PM) KP Oli took the oath of

JSP leaders Pradeep Yadav and Nawalkishore appointed as ministers

KATHMANDU: The Janata Samajwadi Party (JSP), led by Ashok Rai,

Writ petition filed against appointment of UML Chair Oli as Prime Minister

KATHMANDU: A writ petition has been filed at the Supreme

Gold price up by Rs 200 per tola today

KATHMANDU: The price of gold increased by Rs 200 per