KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy reflected mixed signals this week, with the Nepal Stock Exchange (NEPSE) showing marginal recovery as it closed at 2,788.36, supported by a turnover of Rs. 74.6 billion, signaling cautious optimism among investors.
In a significant boost to infrastructure, MCA-Nepal signed $154.5 million in contracts to advance power transmission projects under the MCC Compact, reaffirming bilateral cooperation with the U.S.
Meanwhile, Nepal Airlines continued its struggle to turn a profit despite revenue growth, highlighting persistent inefficiencies in state enterprises. Gold and silver prices saw modest increases, while the government intervened in the agricultural sector by setting a minimum support price for paddy and revealing an inability to meet fertilizer demand due to budget constraints.
The Cabinet also approved toll rates for the Nagdhunga Tunnel Road and accepted foreign aid for vocational infrastructure, indicating fiscal prioritization of long-term development. On the industrial front, nearly 200 new businesses registered in Nawalpur, reflecting grassroots entrepreneurial activity, while delays in dairy payments prompted warnings of protests, underlining liquidity issues in the supply chain.
The announcement of dividends by Kumari mutual funds and NAC’s joint aircraft purchase plan with provinces further underscored the evolving dynamics across Nepal’s financial, transportation, and agricultural sectors.
NEPSE inches up to 2,788.36; market turnover reaches Rs. 74.6 billion
The Nepal Stock Exchange (NEPSE) closed slightly higher on Thursday, ending at 2,788.36, after recovering from a previous loss. The trading session began at 2,789.54, reaching an intraday high of 2,802.14 and dipping to a low of 2,784.15. Throughout the day, approximately 19.26 million shares were exchanged in over 76,500 transactions involving 320 companies. The total trading volume amounted to 74.6 billion rupees. By the end of the session, NEPSE’s overall market capitalization stood at 4.656 trillion rupees, while the float market capitalization was recorded at 1.576 trillion rupees.
MCA-Nepal signs $154m contracts to advance power line project
The Millennium Challenge Account Nepal (MCA Nepal) signed two major contracts under the Compact’s Electricity Transmission Project, jointly funded by the governments of Nepal and the United States. Following the successful completion of the foreign aid review, the Millennium Challenge Corporation (MCC) Nepal Compact resumed work with renewed momentum and shared commitment from both governments, a statement issued by MCA-Nepal said. After a competitive international bidding process, MCA-Nepal awarded Lot 2 contract (Ratmate to New Damauli) to Angelique-Skipper JV and Lot 3 contract (New Damauli to New Butwal) to WAIBA-SALASAR JV. Combined, these contracts are valued at approximately US $154.5 million and will cover the design, installation, testing, and commissioning of 180 kilometers of high-voltage transmission lines.
Nepal Airlines struggles to turn profits despite revenue gains
Nepal Airlines Corporation (NAC), the government-owned airline, has long struggled to achieve profitability, even as other state-owned enterprises report gains. Established in 1958, NAC has recently faced criticism over operational inefficiencies and rising losses, despite operating six aircraft, including two wide-body, two narrow-body, and two twin-otters. According to audit data, NAC’s losses, though still significant, have decreased over the past two fiscal years. In FY 2021/22, the airline recorded a loss of Rs 1.71 billion. By FY 2022/23, it had reduced its deficit to Rs 665 million. For FY 2023/24, NAC projected total revenue of Rs 20.5 billion, largely driven by international flights, which generated Rs 14.2 billion, and ground handling services, which contributed Rs 5.49 billion.
Gold prices up marginally
Gold prices went up marginally on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of gold increased by Rs 100 per tola. With this, the price of gold was set at Rs 196,800 per tola. The price of silver also went up by Rs 15 and was sold at Rs 2,340 per tola.
Govt sets minimum support price for paddy, approves AI policy
The government fixed the minimum support price for paddy for the current fiscal year. Government Spokesperson Prithvi Subba Gurung announced that the Cabinet meeting held on August 11 decided to set the price at Rs 3,463.81 per quintal for coarse paddy and Rs 3,628.33 per quintal for medium paddy. The meeting also decided to accept a US$9 million grant from the South Korean government for infrastructure development at Gandaki Technical Institute and appointed Dr. Ramesh Prasad Chaulagai as an expert member of the National Cooperative Regulatory Authority.
Cabinet approves toll rates for Nagdhunga Tunnel Road
The government has approved toll rates for the Nagdhunga Tunnel Road: Rs 65 for cars/vans entering Kathmandu and Rs 60 when exiting; Rs 115 for minibuses/minitrucks entering and Rs 80 when exiting; Rs 260 for large buses/trucks entering and Rs 200 when exiting; and Rs 600 for heavy equipment entering and Rs 250 when exiting.
Dairy Development Board to pay Rs 1 billion, private sector Rs 3 billion to dairy farmers
Dairy Producers’ Cooperatives have complained that they have not received payment for milk supplies. The 31st Board of Directors meeting of the Central Dairy Producers’ Cooperative Association, held in Chitwan, has warned of launching a phased protest from August 20 if the payments are not made. The cooperatives say they have been unable to pay farmers due to non-payment from buyers. Association President Ambar Bahadur Kunwar said that a meeting of District Cooperative Association chairpersons will be held on Bhadra 4 to decide further steps.
About 200 new industries registered in Nawalpur
NAWALPUR: Nearly 200 new industries were registered in Nawalparasi (Bardaghat-Sustapur) during the last fiscal year 2024/25, according to the Tourism and Industry Office, Nawalpur. A total of 191 new industries were registered, including 174 private, seven partnerships, and nine private limited companies. Industries and business firms with a capital of up to Rs 150 million are registered at the office. Information Officer Khadak Bahadur Thapa said the highest number of registrations were service-oriented industries (79), followed by agriculture and forest product-based industries (67), manufacturing-oriented industries (38), tourism industries (3), information and technology-based industries (2), and construction-related industries (1).
KEF proposes 11.50% cash dividend
Kumari Equity Fund (KEF), Kumari Dhanabriddhi Yojana (KDBY), and Kumari Sabal Yojana (KSY) have announced their dividends for the fiscal year 2024/25. The meeting of the board of directors of Kumari Capital Limited has decided to distribute a 11.50% cash dividend to the unitholders of Kumari Equity Fund (KEF), 10.5% cash dividend to the unitholders of Kumari Dhanabriddhi Yojana (KDBY) and a 9% cash dividend (including tax) to the unitholders of Kumari Sabal Yojana (KSY).
NAC plans to jointly purchase aircraft with provincial governments
Nepal Airlines Corporation (NAC) is preparing to purchase aircraft in partnership with provincial governments to operate provincial-level flights. Under the plan, each province would receive one STOL (Short Take-Off and Landing) aircraft, purchased through NAC management with financial investment from the respective provincial government. According to the Corporation, the initiative follows special directives from Culture, Tourism, and Civil Aviation Minister Badri Prasad Pandey. Discussions with all provinces are underway, with funding expected to come from both provincial and local governments, while ownership and operations will remain with NAC. Each aircraft is estimated to cost up to USD 7.4 million.
No budget to meet fertilizer demand: Agriculture Minister
Minister for Agriculture and Livestock Development Ramnath Adhikari has said that the government lacks sufficient budget to fully meet fertilizer demand. Responding to lawmakers’ questions in Thursday’s House of Representatives session, Minister Adhikari explained that high subsidies on fertilizers make it difficult to procure enough within the available budget. Currently, urea receives an 82 percent subsidy, DAP 84 percent, and potash 49 percent, he said. The ministry plans to supply 600,000 tons of fertilizer this fiscal year, while the annual demand stands at 1.3 million tons.
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