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) experienced a significant decline during the week ending October 24, 2024, with the index dropping from 2697.91 to 2627.14, reflecting a 2.62% decrease.
This downturn was marked by initial steep losses, attributed to investor caution amid macroeconomic uncertainties, including global economic pressures and domestic challenges.
Despite a brief rebound on Tuesday, the subsequent days saw further declines, illustrating a persistent market volatility and fragile investor sentiment.
Concurrently, gold prices fluctuated but stabilized at Rs 166,000, suggesting a cautious market response to ongoing geopolitical risks.
Meanwhile, the latest report from the Nepal Rastra Bank highlighted mixed performance among commercial and development banks, with overall profitability trends indicating growth, albeit with some banks struggling.
Prime Minister KP Oli’s announcement of a Rs 34 billion investment commitment, alongside proposed economic reforms, aims to bolster confidence in the national economy, indicating proactive governmental efforts to address these market challenges.
NEPSE declines this week amid ongoing investor caution and market volatility
In the week ending October 24, 2024, the Nepal Stock Exchange (NEPSE) experienced a downward trajectory, beginning with an index value of 2697.91 on October 20 and closing at 2627.14 on October 24, marking an overall decline of 70.77 points or approximately 2.62%.
The week started with a notable drop, with the index falling by 47.44 points on Sunday and 57.99 points on Monday, reflecting investor caution and possible reactions to macroeconomic factors.
A slight rebound on Tuesday, with an increase of 25.88 points, provided a temporary respite, but subsequent days saw further declines, indicating persistent market uncertainty.
The ongoing fluctuations in NEPSE highlight the fragile investor sentiment amid external economic pressures and domestic challenges, signaling a need for strategic adjustments as market participants navigate this volatile environment.
Gold prices exhibit weekly fluctuations amid market uncertainty
In the week ending October 25, 2024, gold prices in Nepal exhibited a moderate upward trend, starting at Rs 165,000 on October 20 and peaking at Rs 166700 on October 23, before stabilizing at Rs 166,000 for the last two days.
This fluctuation suggests a mix of market sentiment and external economic factors influencing demand.
The consistent rise in prices early in the week may reflect heightened investor interest amid global uncertainties or inflationary pressures.
However, the stabilization at Rs 166,000 indicates a potential resistance level, hinting at a cautious market outlook as investors weigh geopolitical risks and currency fluctuations.
Nepal Rastra Bank report shows profitability gains for commercial and development banks, despite mixed performance
The latest financial report from Nepal Rastra Bank reveals encouraging profitability trends for both commercial and development banks through Bhadra in the fiscal year 2081/82.
Commercial banks reported a total net profit of Rs. 17.69 billion, with Nabil Bank leading the pack at Rs. 1.66 billion, followed closely by strong performances from Global IME Bank and Nepal Investment Mega Bank.
However, Machhapuchchhre Bank lagged behind, posting the lowest profit in the sector. Meanwhile, development banks collectively achieved a net profit of Rs. 1.64 billion, though six out of 17 banks recorded losses.
Muktinath Bikas Bank emerged as the standout performer, illustrating a mixed landscape where a few banks excelled while others struggled, highlighting the need for strategic improvements across the sector.
PM Oli announces Rs 34 billion investment commitment and economic reforms
In the first 100 days of the current government, Prime Minister KP Oli announced a commitment of around Rs 34 billion for investments across 200 industries, indicating positive developments for the national economy.
He introduced a high-level commission tasked with recommending economic reforms tailored to private sector needs, bolstering entrepreneurs’ confidence.
Additionally, the government is in the process of securing Nepal’s Sovereign Credit Rating through an independent expert organization.
Significant agreements have been made, including a partnership between the Nepal Oil Corporation and Indian Oil Corporation to enhance the pipeline for improved petroleum supply and storage.
The Nepal Accreditation Centre has also been established to ensure quality standards for goods and services.
Government expenditures have risen to approximately Rs 329 billion, while revenue mobilization has increased by 13.3%, totaling around Rs 248 billion compared to the same period last year.
Meanwhile on Sunday, the NEPSE index closed at 2,617.95 points, reflecting a decrease of 9.19 points (0.34%) compared to the previous day.
This follows a larger drop of 18.25 points in the last trading session. Starting at 2,629.84, the index fluctuated, reaching a high of 2,632.94 before falling to an intraday low of 2,610.14 points.
The trading included 320 stocks with 56,646 transactions, totaling 11,134,178 shares and resulting in a turnover of Rs. 4.73 billion.
Gold prices surge to record high of Rs 167,400 per tola on Sunday
The price of gold in Nepal soared to a new all-time high on Sunday. The Federation of Nepal Gold and Silver Traders reported that gold prices rose by Rs 1,400, standing at Rs 167,400 per tola, the highest recorded price to date.
Last Friday, pure gold was priced at Rs 166,000 per tola. Additionally, the price of silver has increased by Rs 15 today, now trading at Rs 2,085 per tola, compared to Rs 2,700 last Friday.
NRB entrusts Chinese company to print new 100-rupee notes featuring “Chuchche” map
The Nepal Rastra Bank (NRB) has entrusted a Chinese company with the task of printing new 100-rupee notes that will feature the “Chuchche” (revised) map.
This marks the first time that notes will bear the newly recognized map following the recent constitutional amendments. It should be noted that the Council of Ministers granted approval for the design change of the 100-rupee note.
On May 20, 2020, Nepal issued a new map incorporating Limpiyadhura, Lipulek, and Kalapani through a constitutional amendment. Since the map is now printed on the 100-rupee note, it was necessary to update the design accordingly.
(Prepared by Srija Khanal)
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