KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The recent economic developments in Nepal showcase a mixed performance across various sectors.
The Nepal Stock Exchange (NEPSE) saw a decline of 32.21 points, reflecting broader market challenges, though the Development Bank Index showed growth.
Commercial banks are aggressively expanding margin lending, signaling higher risk appetite, while development banks reported strong profits.
However, industrial capacity utilization hit a low of 48.3%, indicating ongoing structural challenges, such as inadequate infrastructure and labor migration.
Meanwhile, foreign education spending remains high despite efforts to retain youth, and the declining interest rates are reducing the appeal of fixed deposits.
On a positive note, initiatives like the launch of the Consumer Court and growing banana farming in Gulmi demonstrate attempts to strengthen local industries and create jobs.
Additionally, Nepal’s environmental challenges are highlighted as it ranks seventh in global air pollution levels. These factors collectively reflect an economy facing both growth opportunities and significant hurdles.
NEPSE declines by 32.21 points
The Nepal Stock Exchange (NEPSE) on Tuesday experienced a decline of 32.21 points (1.17%) today, closing at 2,719.20 after a previous drop of 20.68 points. The total turnover for the day was Rs. 8.39 billion, with 15.09 million shares traded across 92,031 transactions.
Himalayan Reinsurance Limited (HRL) led the turnover with Rs. 58.65 Crores. Mahalaxmi Bikas Bank (MLBL) saw a gain of 9.98%, while Nesdo Sambridha Laghubitta (NESDO) dropped by 6.69%. The Development Bank Index rose by 1.93%, while the Manufacturing and Processing sector fell by 2.49%.
Gold price drops by Rs. 500 per tola
Gold prices in Nepal decreased by Rs. 500 per tola on Tuesday, bringing the price of hallmark gold to Rs. 169,900 per tola, down from Rs. 170,400 on Monday.
Silver prices also dropped by Rs. 15 per tola, and traded at Rs. 1,970. This drop reflects fluctuations in the market.
Development banks report over Rs. 3 billion in profit in seven months
According to Nepal Rastra Bank, 15 listed development banks earned a total profit of Rs. 3.18 billion in the first seven months of the current fiscal year, a 27.41% increase from Rs. 2.49 billion in the same period last year.
Garima Development Bank led with Rs. 638.2 million in profit, followed by Muktinath (Rs. 629.5 million) and Shine Resunga (Rs. 446.6 million). Excel Development Bank recorded the highest loss of Rs. 189 million, while Sindhu Development Bank showed the highest profit growth at 188.52%.
Commercial banks expand margin lending by Rs. 93 billion
Commercial banks have aggressively increased share mortgage loans, disbursing Rs. 93.12 billion over seven months, marking a 39.84% increase compared to last year.
Nabil Bank led with Rs. 12.96 billion (10.70% growth), followed by Global IME with Rs. 11.64 billion (75.72% growth). Nepal SBI, Machhapuchhre, and Kumari Bank reported the highest growth rates. In contrast, NIC Asia and Himalayan Bank saw decreases of 43.61% and 20.62%, respectively.
Consumer Court to begin operations on March 15
Nepal’s Consumer Court will begin operating on March 15, as announced by Minister Ajaya Kumar Chaurasiya in Parliament.
The court, established under the Consumer Protection Act, 2075 BS, will handle consumer cases in Kathmandu, Lalitpur, and Bhaktapur. Judge Ram Prasad Sharma will serve as the chairperson, with Gehendra Raj Regmi and Ananda Raj Pokharel as members.
The initiative aims to strengthen consumer rights and ensure timely legal actions against unfair trade practices.
Stock market will operate for only four days this week
The stock market will be open for just four days this week, with Wednesday (Falgun 28) being the final trading day.
Due to the Holi holiday on Thursday and the weekend, trading will resume on Chaitra 3.
Investors speculate that market activity may pick up after Nepal Rastra Bank Governor Maha Prasad Adhikari begins his leave next week.
Patan High Court suspends Bishal Bazar’s AGM
Patan High Court has issued an interim order halting Bishal Bazar’s annual general meeting (AGM), which was scheduled for Falgun 29. The order, issued on Falgun 26, follows a writ petition filed by shareholder Sunil Kumar Shakya.
The court ruled that the AGM could potentially harm shareholder interests and directed Bishal Bazar to maintain the current status and submit a written response within 15 days.
Nepal’s industrial capacity utilization falls to 48.3%
Nepal’s industrial capacity utilization dropped to 48.3% in FY 2023/24, marking the lowest level in eight years, according to Nepal Rastra Bank (NRB).
Challenges such as inadequate infrastructure, lack of investment, and skilled labor migration continue to impact industrial growth.
Pashmina industries reported the highest utilization at 97.9%, while vegetable ghee plants showed just 0.9%. While some industries, such as cement and processed food, reported growth, sectors like oil, textiles, pharmaceuticals, and steel saw declines.
Foreign education expenditure reaches Rs. 64.15 billion
Nepal Rastra Bank reports that Rs. 64.15 billion was spent on foreign education in seven months, a slight decrease from Rs. 66.64 billion last year.
Meanwhile, spending on travel increased by 10.6%, reaching Rs. 115.88 billion. Despite efforts to improve local education quality and retain youth, significant outflows continue, contributing to a Rs. 50.22 billion decrease in net service income.
Declining interest rates lower fixed deposit appeal
With banks continuing to lower deposit interest rates, savers are losing interest in fixed deposits. Over the past year, fixed deposits have decreased by Rs. 1.42 trillion, with funds shifting to regular savings.
Due to falling rates, many depositors now prefer regular savings or short-term three-month fixed deposits. Banks, facing excess liquidity, are unwilling to offer higher interest rates on long-term deposits.
Nepal Rastra Bank reports an average deposit interest rate of 4.62% and a lending rate of 8.55% as of the end of Magh. Nepal Bankers’ Association President Santosh Koirala indicates that depositors are awaiting higher rates before renewing fixed deposits.
Nepal ranked 7th in Global Pollution Index
Nepal has been ranked the seventh most polluted country in the world, according to IQAir’s World Air Quality Report 2024, with an average PM2.5 concentration of 42.8 µg/m³—more than eight times the World Health Organization’s safe limit.
Kathmandu ranked 193rd among polluted cities, with PM2.5 levels exceeding WHO guidelines by over ten times in five months. Chad, Bangladesh, and Pakistan topped the global pollution rankings.
Om Megashree Pharmaceuticals Launches IPO for Public Investment
Om Megashree Pharmaceuticals Limited has opened its IPO for 14,76,000 shares at Rs. 100 per share from Falgun 27, 2081. The early closing date is Chaitra 3, with a possible extension until Chaitra 12.
Prabhu Capital Limited is the issue manager. The company, based in Chitwan, manufactures pharmaceuticals and began partial operations in February 2024. CARE Ratings Nepal has assigned a ‘CARE-NP BB- (Is)’ rating, indicating moderate default risk.
Banana farming kicks off in Gulmi
Bhagwati Agricultural Firm has started banana farming on 20 ropanis of barren land in Resunga-4, Gulmi. Operator Jhabi Pandey has planted 300 banana plants, with plans for gradual expansion.
Mayor Khil Dhoj Panthi assured support for commercial farmers. The initiative is creating local employment and promoting banana cultivation to meet market demand.
One-day potato exhibition held in Jumla
A one-day potato exhibition was held in Khalanga, Jumla, featuring potatoes from high-altitude areas of all eight local levels.
The event, organized by the Agriculture Development Office, Land Problem Resolution Commission, and Nepal Journalists Federation, emphasized encouraging farmers and enhancing potato marketability. This year, potato farming in Jumla expanded to 2,290 hectares, yielding 35,930 metric tons, a rise from last year’s 34,450 metric tons.
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