KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The recent performance of the Nepal Stock Exchange (NEPSE) reflects positive investor sentiment, with the index surpassing 2700 points for the first time, bolstered by strong sectoral growth, especially in banking, hydropower, and finance.
The increase in trading volume suggests heightened market activity, which may signal greater investor confidence.
Simultaneously, the government’s reduction in customs duties on gold has led to a sharp drop in gold prices, benefiting consumers but highlighting the volatility of the precious metal market.
On the regulatory front, Nepal Rastra Bank’s intervention in Karnali Development Bank indicates ongoing efforts to maintain financial stability, while the proposed bonus shares by KBSH and the establishment of a Project Bank by Lumbini Province signal further developments in corporate governance and regional economic planning.
However, the delays in the underground cable project and ongoing infrastructure challenges, like the reconstruction of the Kavre Valley Water Supply Scheme with ADB support, highlight persistent issues in Nepal’s infrastructure sector that could impact long-term economic growth.
NEPSE surpasses 2700 points, trading volume increases
The Nepal Stock Exchange (NEPSE) on Tuesday experienced positive growth, surpassing the 2700-point mark for the first time, with a rise of 33.41 points to reach 2716 points.
Trading volume also increased significantly, with turnover rising from Rs 6.34 billion to Rs 7.44 billion.
Out of the listed companies, 211 saw their stock prices increase, while 32 declined, and one remained unchanged.
This broad market growth was reflected across all sector indices, including notable gains in Banking, Hydropower, and Finance, indicating a robust performance across multiple industries.
Overall, the market recorded a turnover of Rs. 7.44 billion from 14,292,742 shares traded across 312 companies in 75,572 transactions.
The positive momentum came amid the appointment of new leadership at the Securities Board of Nepal (SEBON), potentially contributing to market confidence.
Gold prices plunge by Rs 2,600 per tola
The sharp decline in gold prices in recent days, with a reduction of Rs 18,500 in just two days, reflects the impact of the government’s decision to reduce the customs duty on gold from 20 percent to 10 percent.
This move aims to curb the rising levels of gold smuggling, which has been exacerbated by a decline in official gold imports.
The price of gold has dropped from Rs 167,200 per tola on Sunday to Rs 148,700 today, offering relief to consumers, though it also highlights the volatile nature of the gold market.
In addition, silver prices have also seen a decrease, falling by Rs 25 per tola, further signaling a broader downturn in precious metal prices.
NRB imposes restrictions on Karnali Development Bank
Nepal Rastra Bank (NRB) has imposed restrictions on Karnali Development Bank in Nepalgunj, halting its ability to accept new deposits, open accounts, or issue loans due to its poor financial condition.
An NRB inspection revealed significant issues, including a high non-performing loan ratio of 40.85% and failure to meet capital adequacy requirements.
NRB has given the bank six months to improve its financial health under the “Prompt Corrective Action Regulations, 2074” to protect depositors and the public.
Chandragiri Hills Limited to hold 15th AGM on Dec 18
Chandragiri Hills Limited has announced that its 15th Annual General Meeting (AGM) will be held December 18, at the company’s office in Thankot.
The AGM will cover several key agenda items, including the approval of the annual report, which will be presented by the chairman on behalf of the board of directors.
The shareholders will also review and endorse the auditor’s report, which includes the profit and loss statement, financial reports, and cash flow statements for the fiscal year 2080/81.
Underground cable project faces years of delays
It has been almost half a decade since the government began the project of underground cable management in the Kathmandu Valley.
The Nepal Electricity Authority (NEA) initiated this project in the Kathmandu Valley starting from February 2020.
Although an agreement was made to complete the underground cable management work within two and a half years of the contract, the project remains incomplete.
KBSH announces 10 percent bonus shares
Kutheli Bukhari Small Hydropower Limited (KBSH) has put forward a proposal to issue 10% bonus shares for the fiscal year 2080/81.
The bonus shares, valued at Rs. 1.21 crores, will be allocated based on the company’s current paid-up capital of Rs. 12.18 crores.
The dividend distribution will take place only after receiving approval from the Electricity Regulatory Commission and confirmation at the company’s 13th Annual General Meeting (AGM).
Lumbini Province government to establish Project Bank
The Lumbini Province Government has proceeded ahead for the establishment of a Project Bank, as outlined in its annual policies and programmes for the current fiscal year 2081-82 BS (2024-25).
Chief Minister Chet Narayan Acharya stated that the proposed bank will create a transparent system for selecting projects, with strategic plans aimed at unlocking opportunities for prosperity and self-sufficiency in the province.
The Lumbini Province Planning Commission has begun discussions at various levels to formulate the guidelines for the bank’s establishment.
ADB to support in reconstruction of Kavre Integrated Water Supply Project
The Asian Development Bank (ADB) is to assist in the reconstruction of the Kavre Valley Integrated Water Supply Scheme (KVIWSS) after it was damaged by the floods and landslides triggered by incessant rains on September 27 and 28.
The scheme is under construction for improving the water supply to three old cities in the district – Banepa, Panuti and Dhulikhel.
(Prepared by Srija Khanal)
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