KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The economic landscape in Nepal presents a mix of positive and negative trends. While exports have seen a promising increase of 16.5% in the first five months of the fiscal year, this is offset by a growing trade deficit, largely driven by high imports of petroleum products.
Similarly, the stock market has experienced a decline, with the NEPSE index falling by over 13 points, despite substantial trading volume.
Meanwhile, gold prices have risen, suggesting increased demand or shifts in market sentiment, offering a potential opportunity for investors in precious metals.
On the corporate front, Citizen Investment Trust (CIT) and Nepal Telecom (NTC) have announced favorable dividends, while Ghorahi Cement proposes a significant increase in capital through right share issuance.
Additionally, agricultural challenges persist, as evidenced by the decline in paddy production in Bagmati Province due to floods and landslides, underscoring the vulnerability of local industries to natural disasters.
Together, these developments highlight both opportunities and risks within Nepal’s current economic environment.
Export rise in five months
The recent rise in exports, as reported by the Customs Department, is a positive development for Nepal’s foreign trade, with a notable 16.5 percent increase in the first five months of the current fiscal year.
This growth in exports, reaching Rs 73.20 billion, is a significant improvement compared to the Rs 63.54 billion recorded during the same period last year.
However, despite this export boost, Nepal continues to face a substantial trade deficit, which has grown by 4.21 percent to Rs 587 billion.
The largest contributor to this deficit is the import of petroleum products, which amounted to Rs 42.17 billion over the last five months.
While the rise in exports is promising, the persistent trade imbalance, largely driven by high energy imports, underscores the need for more strategic measures to reduce dependence on costly imports and enhance domestic production capabilities.
NEPSE index drops by 13.53 points
The NEPSE Index continued its downward trend, falling by 13.53 points, or 0.52%, to close at 2,583.29, reflecting a sustained period of market weakness following a loss of 31.43 points in the previous session.
The market experienced notable volatility, opening at 2,587.3 and fluctuating between a high of 2,614.28 and a low of 2,569.00.
Despite this movement, trading activity remained robust, with total turnover reaching Rs. 4.51 billion from 57,863 transactions involving over 9 million shares across 319 companies.
River Falls Power stood out as the leading stock in terms of turnover, indicating its significant market influence on the day.
Gold price up by Rs 1,100 per tola
The recent rise in gold and silver prices in the domestic market indicates a positive shift in the precious metals’ value.
Gold has increased by Rs 1,100 per tola, reaching Rs 149,600, up from Rs 148,500 on Friday, reflecting a robust demand or potential shifts in market sentiment.
Similarly, silver saw a moderate increase of Rs 30 per tola, now priced at Rs 1,790. These price changes, reported by the Federation of Nepal Gold and Silver Dealers’ Associations, may be driven by a variety of factors, including global market trends, currency fluctuations, or local demand, suggesting a favorable outlook for investors in precious metals at this moment.
CIT proposes 13% dividend for FY 2080/81
Citizen Investment Trust (CIT) has recommended a 13% dividend for the fiscal year 2080/81.
The decision was made during a board meeting on Poush 7, which proposed a distribution consisting of 7% bonus shares and a 6% cash dividend (for tax purposes).
CIT’s current paid-up capital stands at Rs 6.05 Arba. However, the dividend proposal is contingent upon approval from the Ministry of Finance, the Government of Nepal, and the upcoming Annual General Meeting (AGM).
NTC announces 17th AGM and Rs. 30 per share cash dividend
Nepal Doorsanchar Company Limited (NTC) has scheduled its 17th Annual General Meeting (AGM) for 28th Poush, 2081, to be held at Rastriya Sabha Griha, Pradarshani Marg, Kathmandu, starting at 10 am.
During the AGM, the company will approve a Rs. 30 per share cash dividend for the fiscal year 2080/81, as decided in the 1047th board meeting held on 6th Poush, 2081.
The dividend will be distributed based on NTC’s paid-up capital of Rs. 18 Arba.
Other key agenda items include approval of the auditor’s report, financial statements, and the appointment of an auditor for FY 2081/82.
The book closure for dividend eligibility will be from Poush 18 to Poush 28, meaning investors holding shares before this period will be entitled to the dividend and may attend the AGM.
Ghorahi Cement proposes 75% right shares
Ghorahi Cement Industry Limited (GCIL) has announced its 4th Annual General Meeting (AGM) for 27th Poush, 2081, to be held at Hotel Pauwa, Ghorahi-15, Dang, starting at 9 AM.
In a decision made during the board meeting on 5th Poush, 2081, GCIL proposed issuing right shares in a 1:0.75 ratio, meaning shareholders will be offered 75% additional shares based on their existing holdings.
The company plans to issue 3,42,57,642.75 units of right shares, increasing its paid-up capital from Rs. 4.56 Arba to Rs. 7.98 Arba. However, the issuance of these right shares is subject to approval at the upcoming AGM.
Paddy production declines in Bagmati Province
Paddy production in Bagmati Province has decreased this year.
According to the Bagmati Province Agriculture Development Directorate, the drop in production is attributed to the floods and landslides caused by heavy rains on September 27-28.
In the current fiscal year, paddy was planted on 105,415 hectares of land in Bagmati Province, yielding a total of 408,316 metric tons at an average of 3.87 metric tons per hectare, reported Nabin Kunwar, an agricultural economist at the Directorate.
(Prepared by Srija Khanal)
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