KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s stock market experienced a pullback after a nine-day rally, with the NEPSE index dropping by 13.62 points on Monday as investors secured profits following a significant gain.
Alongside this, gold and silver prices remained stable for several days. In other financial news, the government prioritized transmission line expansion to attract loans from the Asian Development Bank, while Nepal Rastra Bank tightened electric vehicle loan policies.
The Ministry of Finance issued new budget guidelines emphasizing project feasibility and financial planning. Meanwhile, the government announced plans to fund medical treatment for critically injured road accident victims.
The reinsurance sector also showed strong performance, with Himalayan Reinsurance hitting a record high, contrasting with rising complaints about delayed insurance claims.
However, several infrastructure projects, like the Kali Gandaki Corridor, faced delays, further fueling local frustrations. Additionally, Nepal signed an MoU with India to enhance water and sanitation cooperation, while investments in airport infrastructure continue, including the expansion of Tarigaun and Biratnagar airports.
Additionally, Nepal Telecom appointed actress Swastima Khadka as its brand ambassador to promote its services.
Stock market pulls back after nine-day rally
Nepal’s stock market saw a decline after a nine-day surge, with the NEPSE index dropping by 13.62 points to 2,876.66 on Monday.
This break in the upward trend followed a 211.78-point gain. The index reached a high of 2,929.21 earlier in the day before investors decided to secure their profits.
The total turnover increased to NPR 14.28 billion, with Himalayan Reinsurance leading the trades with NPR 1.38 billion.
Gold and silver prices stable
Gold prices remained stable for three consecutive days, holding at NPR 168,100 per tola, according to the Nepal Gold and Silver Dealers’ Association. Silver prices have also been unchanged at NPR 1,915 per tola.
Transmission line expansion prioritized for ADB loans
Nepal’s government has placed a strong emphasis on expanding its transmission lines to attract loan investments from the Asian Development Bank (ADB).
The Ministry of Energy has updated its project list and submitted it to the Ministry of Finance, proposing eight projects aimed at strengthening the country’s transmission and distribution systems.
Nepal Rastra Bank tightens electric vehicle loan policy
Nepal Rastra Bank has imposed stricter loan policies for electric vehicles (EVs), reducing the loan-to-value (LTV) ratio to 60%.
Buyers will now need to provide a 40% down payment, compared to the previous requirement of just 20%. This move is seen as benefiting sellers of internal combustion engine (ICE) vehicles, who have long called for restrictions on EV financing.
Finance Ministry sets budget guidelines for FY 2082/83
The Ministry of Finance has issued new guidelines for the preparation of the budget for fiscal year 2082/83. These guidelines stress the importance of feasibility, financial planning, and project implementation.
They also require that budget proposals stay within limits, ensure foreign-aid projects align with execution schedules, and manage multi-year liabilities efficiently. The guidelines prioritize national pride projects and emphasize intergovernmental financial transfers.
Calls for fair telecom royalty distribution grow
Stakeholders are calling for a more equitable distribution of telecom frequency royalties to provincial and local governments, noting that frequencies are a natural resource.
Despite a 2022 recommendation from the National Natural Resources and Fiscal Commission, the Finance Ministry has not acted on the suggestion.
Chhimek Laghubitta opens sale of 100,000 promoter shares
Chhimek Laghubitta has opened the sale of 100,000 promoter shares, with a minimum price of NPR 445 per share.
The sale is open to existing promoter shareholders for the next 35 days. If no applications are received during this period, the shares will be offered to other individuals or institutions.
Govt to fund medical treatment for severe road accident injuries
The government has announced that it will cover the treatment costs of critically injured road accident victims through the Road Safety Fund, as part of the National Road Safety Policy 2081.
The policy will enhance health insurance coverage, raising compensation for medical treatment to NPR 25 lakh, up from the current NPR 3 lakh for injuries and NPR 5 lakh for fatalities.
Himalayan Reinsurance hits record high
The reinsurance sector in Nepal is gaining momentum, with Himalayan Reinsurance hitting a record high in the secondary market.
Himalayan Re has a paid-up capital of NPR 10.4 billion and a reserve fund of NPR 6.16 billion, posting a net profit of NPR 616.9 million.
The company reported an earnings per share (EPS) of NPR 11.86, reflecting strong performance. On the other hand, Nepal Reinsurance, which has a larger capital base, reported a profit of NPR 737 million but a lower return on equity (ROE).
Kulman Ghising receives zero performance score from Energy Ministry
Kulman Ghising, Managing Director of Nepal Electricity Authority, received a zero performance score for fiscal year 2080/81 from the Ministry of Energy, Water Resources, and Irrigation.
The score, given by a committee led by Joint Secretary Jivach Mandal, was based on Ghising’s failure to submit timely performance reports, despite claiming near-total achievement in his earlier report.
Former Chairpersons urge Insurance Authority Chief to act decisively
Former chairpersons of the Nepal Insurance Authority have called on current Chairman Sharad Ojha to make bold decisions and act without fear of political interference.
In a discussion, they emphasized the need for decisive leadership to protect the authority’s integrity, prevent undue demands, and strengthen the sector’s regulation.
Insurance complaints rise over delayed claim payments
Complaints against insurance companies for delayed claim payments have surged, with 141 new cases filed in mid-January of this fiscal year.
Last fiscal year, the total number of complaints reached 244, continuing an upward trend over the last six years. With 371 unresolved cases, the Insurance Authority is under pressure to enforce stricter regulations.
Kali Gandaki Corridor completion delayed
The Kali Gandaki Corridor, Nepal’s shortest national pride project, is only 65% complete after 15 years of construction.
Delays have been caused by budget limitations, natural disasters, COVID-19, and inefficiencies by contractors.
The project, which began in FY 2066/67, is expected to cost NPR 30.57 billion, with NPR 20 billion already spent. Local residents are frustrated by delays in the project, which has impacted irrigation, water supply, and transportation.
Nepal and India sign MoU for enhanced water and sanitation cooperation
Nepal’s Minister for Water Supply, Pradip Yadav, and India’s Minister of Jal Shakti, C.R. Patil, signed an MoU to strengthen cooperation in water, sanitation, and hygiene (WASH).
The agreement aims to improve access to clean water, sanitation, and waste management in Nepal while fostering technological collaboration and capacity building between the two countries.
Govt allocates Rs 10 million for Tarigaun Airport expansion
The Ministry of Culture, Tourism, and Civil Aviation has allocated NPR 10 million for the development of Tarigaun Airport in Tulsipur, Dang.
A request for an additional NPR 990 million has been made to further improve the airport, which currently accommodates only 19-seater aircraft. A planned expansion will allow 72-seater planes to land. Prime Minister KP Sharma Oli recently visited the airport to review the project.
Biratnagar Airport’s new terminal construction progressing well
The construction of a new terminal at Biratnagar Airport is progressing rapidly, with 47% physical and 37% financial completion, according to CAAN engineer Sanjeev Khadka.
The Rs 3.12 billion project, started in 2079, is expected to be completed by 2082 Mangshir. The new terminal will handle 550 passengers per hour and feature 17 check-in counters, VIP lounges, and commercial spaces.
Swastima Khadka appointed as Nepal Telecom’s Brand Ambassador
Nepal Telecom has appointed actress Swastima Khadka as its brand ambassador. The agreement was signed today by Managing Director Sangita Pahadi (Aryal) and Khadka.
The one-year contract will involve promoting the company’s services, with the option for an extension by mutual consent.
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