KATHMANDU: During the week of August 18-22, 2024, the Nepal Stock Exchange (NEPSE) index demonstrated a modest recovery following an initial decline.
Starting at 2966.33, the index dropped by 34.47 points on August 18 but rebounded to 2968.44 by August 21 and further increased to 2974.46 by August 22, ending with a net gain of 8.13 points.
This gradual recovery suggests a positive shift in market sentiment. Conversely, gold prices in Nepal experienced significant volatility, dropping by Rs 1,200 from the week’s high, reflecting broader market instability.
Additionally, the Securities Act in Nepal is set for a major update with the introduction of central depository services to modernize the regulatory framework.
Real estate transactions surged, generating Rs 3.83 billion in revenue, while commercial banks have reduced lending rates to a 30-month low due to weak loan demand, with idle funds increasingly deposited with the Nepal Rastra Bank.
NEPSE index showed modest recovery with a net gain after initial decline
In the week of August 18-22, 2024, the Nepal Stock Exchange (NEPSE) index experienced modest fluctuations amidst a generally stable trading environment.
On Sunday, August 18, the index stood at 2966.33, reflecting a notable drop of 34.47 points or 1.14%, signaling initial market weakness.
This decline might have been influenced by external economic factors or investor sentiment shifts. However, by Wednesday, August 21, the index had rebounded slightly to 2968.44, marking a small gain of 2.11 points or 0.07%, which suggests a stabilization or minor correction.
The upward trend continued into Thursday, August 22, with the index reaching 2974.46, an increase of 6.01 points or 0.20%. This gradual recovery indicates a positive shift in market sentiment or improved investor confidence.
Overall, the NEPSE index saw a net increase of 8.13 points over the week, indicating a slight overall upward trend despite early losses.
Gold prices in Nepal plummet by Rs 1,200 amidst week of volatility
In the week of August 18-23, 2024, gold prices in Nepal displayed a volatile and downward trajectory, reflecting both market instability and potential external influences.
The week began with a high of Rs 152,600 on Sunday, but prices fell over the following days, hitting Rs 152,200 by Tuesday.
This early decline suggests a possible initial response to market conditions or sentiment shifts. On Wednesday, the price surged to Rs 153,000, a significant rebound, which could indicate a reaction to short-term factors such as geopolitical events, changes in global gold demand, or currency fluctuations.
However, this spike was temporary, as the price dropped sharply to Rs 151,900 by Thursday and further decreased to Rs 151,400 by Friday.
The net decrease of Rs 1,200 over the week reflects a broader bearish trend in the gold market. This volatility might be indicative of underlying uncertainties in the global economy or market speculation affecting gold prices.
Nepal’s Securities Act to get major update with new central depository services
The “Securities Related (First Amendment) Bill, 2081” has been presented to Parliament to propose significant updates to the Securities Act, 2063, with the goal of modernizing and expanding Nepal’s securities regulatory framework.
This bill aims to address evolving market needs and enhance regulatory clarity. A major proposed change is the incorporation of “central depository services” via the addition of clause (ga1) to Section 2 of the Securities Act, 2063.
This clause defines central depository services as entities responsible for the electronic dematerialization of securities and the maintenance of a centralized record for organized institutions, thereby aiming to streamline the securities process and improve market efficiency and transparency.
Real estate transactions surge in Shrawan; revenue hits Rs 3.83 billion
In Shrawan (mid-July to mid-August), real estate transactions saw a notable increase from the same period last fiscal year, with 43,835 property transfers approved this year compared to 39,263 previously.
During the first month of the fiscal year, land revenue offices issued 127,000 real estate services, marking a modest increase from the previous year but a decline from the Ashar period.
Major activity was observed in Jhapa, Morang, and Saptari districts, which collectively generated Rs 3.83 billion in revenue, including Rs 2.55 billion from property registration.
The service tax contributed Rs 260 million, and capital gains tax yielded Rs 1.34 billion, though this represents a decrease from the Rs 2.91 billion collected in the same month last year.
Commercial banks cut lending rates to 30-month low amid weak loan demand
As of mid-July 2023, commercial banks have reduced their lending interest rates to a 30-month low of 9.93 percent annually, down from a high of 13.03 percent in March 2023. Despite this drop, banks are struggling to grow their loan portfolios due to sluggish demand.
Over the past year, the average lending rate has decreased by approximately 2.4 percentage points. Meanwhile, the base deposit rate is at 8 percent, and average deposit rates are 5.77 percent.
The credit-deposit ratio has fallen to 78.98 percent, falling short of the regulatory limit of 90 percent. With significant idle funds, banks are increasingly channeling money into deposits with the Nepal Rastra Bank, which recently received proposals totaling Rs 200 billion from 80 institutions.
(Prepared by Srija Khanal)
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