KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape reflects a mix of investor optimism, structural challenges, and strategic developments across key sectors. The NEPSE index surged 4.16%, led by strong performance in hydropower stocks, defying typical mid-Asar sluggishness and signaling robust investor confidence despite fiscal year-end financial obligations.
The government, meanwhile, is actively courting foreign investment, with the Finance Minister urging Malaysian investors to back infrastructure and tourism, while extending regulatory deadlines for broker capital compliance due to merger delays.
However, systemic weaknesses remain evident: microfinance bad loans have risen to 7.25%, over 250 local governments have failed to present budgets on time, and lawmakers are pushing for greater financial transparency amid concerns over insider lending.
Infrastructure expansion and capital market developments continue, with new projects like cable cars in Bandipur and Champadevi, and public offerings including Nepal Insurance rights shares and Siddhartha Bank debentures.
Regulatory oversight is tightening—evidenced by the Supreme Court upholding auditor appointments for IMF-mandated bank loan reviews—while protests from gold and silver traders highlight discontent over recent tax measures. Collectively, the developments underscore an economy balancing reform, investment drive, and governance bottlenecks.
NEPSE climbs 4.16% this week, hydropower stocks lead the rally
Nepal’s stock market saw a strong performance this week, with the NEPSE index rising by 108 points to close at 2,703, up from last week’s 2,595. Gains were recorded across all five trading days, with Wednesday posting the biggest single-day increase of 34.42 points. Despite fiscal year-end concerns over loan repayments and interest dues, investor sentiment remained positive.
Daily turnover ranged between Rs 6.38 billion and Rs 9.74 billion. This mid-Asar rally defied typical seasonal trends, signaling growing investor confidence. Hydropower stocks led the charge, with Sahas Urja generating the highest turnover of Rs 1.82 billion, followed by NRN Infrastructure, Butwal Power, and Radhi Bidyut.
Finance Minister urges Malaysian investors to back Nepal’s infrastructure and tourism
Finance Minister and Deputy Prime Minister Bishnu Prasad Paudel has encouraged Malaysian investors to explore opportunities in Nepal’s infrastructure and tourism sectors. Addressing a delegation from the Malaysia-Nepal Business Council, he highlighted Nepal’s investor-friendly policies and the government’s willingness to support private sector involvement.
Capital deadline for broker companies extended by nine months
The Securities Board of Nepal (SEBON) is set to extend the deadline for securities broker companies to meet their paid-up capital requirements by nine months—from mid-July 2025 to mid-April 2026. SEBON has already submitted an amendment proposal to the Ministry of Finance. The extension comes amid delays in issuing merger guidelines for brokerage firms.
Microfinance bad loans rise to 7.25%
The average non-performing loans (NPLs) in Nepal’s microfinance sector have reached 7.25% as of mid-April 2025, up from 6.17% in the previous fiscal year. This marks a 1.08 percentage point increase in just nine months, with total bad loans standing at Rs 31.53 billion, according to the Nepal Rastra Bank’s third-quarter off-site supervision report.
Tourism Minister calls for split of civil aviation authority for better oversight
Tourism Minister Bed Prasad Pandey has advocated for separating the operational and regulatory roles of the Civil Aviation Authority. Speaking in a parliamentary committee meeting on Friday, he said a single entity should not be responsible for both functions, stressing the need for a separate regulator to improve aviation governance.
Lawmakers call for disclosure of business loan details in parliament
During a parliamentary discussion on proposed amendments to the Bank and Financial Institutions Act (BAFIA), lawmakers demanded a detailed report on business loans, including how much was borrowed by which groups. They also raised concerns about the overlap between bank promoters and businesspeople. The Nepal Rastra Bank governor recently disclosed that 373 individuals hold promoter shares in financial institutions.
Himalayan Reinsurance to acquire Habib Bank’s shares in Himalayan Bank
Himalayan Reinsurance Company is set to purchase promoter shares held by Pakistan’s Habib Bank in Himalayan Bank. Chairman Shekhar Golchha confirmed the deal, describing it as a move to diversify investment portfolios and improve returns amid declining interest rates on fixed deposits.
Nepal Oil Corporation builds fuel depot at Pokhara airport using domestic resources
Nepal Oil Corporation (NOC) has completed the construction of a fuel depot at Pokhara International Airport, a first in its 55-year history done entirely with local contractors, consultants, and internal financing. The facility includes three storage tanks with a combined capacity of 3,600 kiloliters. The announcement was made during a press briefing at the airport on Thursday.
Supreme court rejects petition on auditor selection for bank loan reviews
The Supreme Court has dismissed a writ petition that challenged the selection of auditors for reviewing the loan portfolios of Nepal’s top 10 commercial banks. This audit is part of Nepal’s commitment under the Extended Credit Facility (ECF) agreement with the IMF. The selection process had been stalled earlier when only one firm qualified and quoted a high fee.
Over 250 local governments yet to submit budgets
A total of 257 local governments have not uploaded their policies and budgets to the federal system, despite the legal deadline of June 24. These budgets must be passed by July 16. Political conflicts, administrative disputes, and tensions between mayors and executives are among the main reasons for the delay.
Distressed cooperatives given July 16 deadline to recover loans
The Distressed Cooperative Management Committee has directed 19 troubled cooperatives to recover defaulted loans by July 16. If the dues are not settled by then, outstanding amounts—along with interest and penalties—will be collected starting July 17.
IPPAN to host Power Summit 2025 in October
The Independent Power Producers’ Association Nepal (IPPAN) will organize the 9th Power Summit on October 17–18, 2025. The event will focus on achieving the government’s Energy Development Roadmap 2081 goal of generating 28,500 MW. Domestic and international investors, policymakers, and energy experts will discuss production, transmission, and distribution.
Gold and silver traders protest VAT and luxury tax
Traders and artisans in the gold and silver industry staged a protest on Wednesday, demanding the removal of a 2% luxury tax on gold and a 13% VAT on diamonds and jewelry. The rally, organized by the Nepal Gold and Silver Dealers and Artisans Struggle Committee, began at Maitighar and marched toward Baneshwor, citing negative impacts on both traders and consumers.
Rs 56.2 million bridge completed over Chirkhuwakhola
A new 20.60-meter concrete bridge has been built over Chirkhuwakhola at a cost of Rs 56.2 million. Funded by the Koshi Provincial Government and implemented by the Infrastructure Development Office, the bridge will benefit residents of Shadananda Municipality and Salpasilichho Rural Municipality.
Bandipur Cable Car gets IPO approval
The Securities Board of Nepal (SEBON) has granted approval for Bandipur Cable Car and Tourism Company to issue an IPO. The company will offer 5.86 million shares at Rs 100 each, totaling Rs 586 million. CARE Ratings Nepal assigned a ‘CARE NP BB’ rating, indicating moderate credit risk.
Champadevi cable car project proposed in Kirtipur
Champadevi Eco-Friendly Company has proposed a 2.075-kilometer cable car line from Kirtipur Municipality Ward 4 to Dakshinkali Municipality Ward 1. The environmental impact assessment (EIA) report has already been submitted to the Ministry of Forests and Environment for approval.
Nepal Insurance rights share issue opens July 22
Nepal Insurance Company will issue 6,576,967 rights shares starting July 22 (Shrawan 6). This accounts for 34.783% of its current paid-up capital. Shareholders can apply for 3.4783 shares for every 10 they hold, at a face value of Rs 100. Eligibility is limited to shareholders registered before June 13 (Jestha 30).
Kishor Jung Karki appointed chairman of Prabhu Bank
Prabhu Bank has appointed Kishor Jung Karki as its new chairman. The decision was made during a board meeting held on Thursday. The board also named Ramesh Raj Aryal as an independent director.
Siddhartha Bank to launch SBL Debenture 2091 on July 13
Siddhartha Bank will issue a 10-year bond, titled ‘SBL Debenture 2091’, starting July 13 (Asar 29). The bond will raise Rs 2.5 billion, with Rs 1 billion offered to mutual funds and the general public. It offers a 7.25% annual interest rate—higher than current fixed deposit rates of around 6%. The minimum application is for 25 units.
Stalls allocated for NADA Auto Show 2025
The NADA Automobiles Association of Nepal has completed stall allocations for the upcoming NADA Auto Show 2025, scheduled for August 19–24 (Bhadra 3–8) at Bhrikutimandap, Kathmandu. The event will feature displays of four- and two-wheelers, light commercial vehicles, auto parts, and special segments including “Made in Nepal,” vintage cars, and policy discussions.
Global Agro records Rs 2.86 billion in sales in nine months
Global Agro Products, known for brands like Global, reported sales of Rs 2.86 billion in the first nine months of the current fiscal year. In comparison, the company posted Rs 3.4 billion in revenue in 2024, Rs 2.82 billion in 2023, Rs 2.44 billion in 2022, and Rs 2.56 billion in 2021.
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