KATHMANDU: Welcome to Nepal News’ Evening Economic Brief—your go-to update on Nepal’s key financial developments. Stay informed with concise insights on market trends, economic indicators, and policy shifts. Here are today’s top highlights:

Real Estate Slowdown Impacts Banks and Financial Sector: A decline in the real estate sector has begun to affect the banking and financial sectors in Nepal. According to Nepal Rastra Bank’s Annual Supervision Report for fiscal year 2023/24, the increase in non-performing loans (NPLs) and non-bank assets is largely attributed to the slowdown in real estate transactions.

The report highlights factors such as reduced purchasing power, weakened demand, a sluggish economy, and inefficiencies in credit utilization as key reasons for the rise in NPLs. As of the second quarter of the current fiscal year (till the end of Poush), the commercial banks’ NPLs stand at 4.99%.

Banks Increase Investment in Construction Sector by 6.90%: In the first seven months of the current fiscal year, banks’ investment in the construction sector has risen by 6.90%, totaling NPR 201.28 billion. Notably, Nabil Bank made the largest investment of NPR 24.62 billion, a 12.03% increase from the previous fiscal year. NIC Asia and Laxmi Sunrise Banks also contributed significantly. However, six banks reduced their investments. Overall, commercial banks are focusing on the construction sector, despite some declines in specific bank contributions.

Challenges in Repaying Loan Interest on Life Insurance Policies: Policyholders who have taken loans against life insurance policies are struggling with regular interest payments, as failure to do so results in capitalized interest, increasing debt. Many are unaware of the requirement to pay every six months due to insufficient information and reminders from insurance companies. Additionally, the minimum NPR 5,000 payment for digital wallet transactions has become an obstacle. This issue raises concerns over whether the policies serve the interests of policyholders or the businesses involved.

Supreme Court Declines Interim Order for Kulman Ghising: The Supreme Court has refused to issue an interim order in favor of Kulman Ghising, who was removed as Nepal Electricity Authority’s Managing Director. Justice Abdul Aziz Musalman scheduled a hearing for both parties on Sunday. Meanwhile, newly appointed NEA chief Hitendra Dev Shakya has requested the court to resolve his four-year-old case regarding his previous removal. Both petitions are being heard in the same bench, with Shakya’s case still pending.

India Increases Electricity Supply to Nepal, Ending Load Shedding in Industries: Following India’s decision to provide an additional 600 MW of electricity at night from the Indian Energy Exchange, industries in Nepal have started receiving 24-hour electricity supply, ending the 12-hour load shedding that was previously in place. The decision, facilitated through diplomatic efforts by Energy Minister Deepak Khadka and Foreign Minister Dr. Arzu Rana, allows for reduced load shedding. The power will be delivered from the Dhalkewar-Muzaffarpur transmission line, easing the energy supply in Nepal.

Nepal Cement Producers’ Association Welcomes End to Load Shedding: The Nepal Cement Producers’ Association has expressed positivity and happiness regarding the end of the daily 12-hour load shedding faced by industries. In a press release, the association welcomed India’s decision to provide 600 MW of electricity at night, which is expected to help ease the electricity shortage. The association highlighted the adverse impact of prolonged load shedding on cement production, production costs, machinery damage, and overall industrial output, affecting employment, revenue, and export promotion.

Shree Airlines Reports Significant Growth in First Half of FY 2081/82: Shree Airlines has achieved notable growth, with a 27% increase in revenue, reaching NPR 2.57 billion in the first six months of the current fiscal year. The airline’s net profit surged by 122%, reaching NPR 357 million. It expanded its fleet with three new Q400 turbo-prop planes, which improved operational efficiency. While the company focuses on long-distance routes, it has 16% of the market share and continues to prioritize profitability despite rising fuel costs.

Pro-Monarchy Protesters Set Fire to Jadibuti Factory, Spark Violence in Kathmandu: A group of pro-monarchy protesters set fire to the Jadibuti Factory in Koteshwor after clashes with the police near Tinkune. The fire destroyed several vehicles in the factory’s garage. The violent protest, organized by royalists at the behest of medical entrepreneur Durga Prasai, escalated into vandalism, damaging private homes and media offices, including those of Kantipur Television and Annapurna Post. The protesters also torched the CPN (Unified Socialist) headquarters. In response, the Kathmandu District Administration imposed a curfew in the area.

Royalist Protesters Target Private Properties in Vandalism Rampage: Royalist protesters have escalated their acts of vandalism, targeting private properties including personal homes, restaurants, media houses, and supermarkets. The protesters, particularly those connected to the royalist cause, have focused their anger on individuals associated with Prime Minister and CPN-UML Chairman KP Sharma Oli, especially those perceived to be linked to him in some way.

One of the targets was the Bhattarai Supermarket chain, run by businessman Min Bahadur Gurung, who had donated around 1 billion Nepali rupees for the construction of the CPN-UML’s central party office. Protesters also attacked the Bhattbhateini store in Koteshwor, causing extensive damage. The outlet in Koteshwor was severely damaged with broken windows, and protesters even set fire to parts of the store. The rampage continued as the protesters hurled stones and engaged in destructive actions, further intensifying the turmoil.

Owner of Fire-Damaged Building in Three-Kune Blames Police for Weakness: The owner and operator of the building in Kathmandu’s Three-Kune, which was severely damaged in a fire during a royalist protest on Friday, has accused the police of negligence. Prem Bahadur Shrestha, the building’s owner and a cooperative operator, claimed that the fire started after the police deployed tear gas.

“I heard that the fire started after the tear gas was used by the police, which is why I rushed here,” Shrestha told the media after the fire was controlled by the fire brigade. He explained that the building, which he had purchased for 25 million rupees just a few years ago, was now completely destroyed. Shrestha has demanded compensation for the significant damage caused by the incident.

Kavrepalanchok District Police Blocks Vehicle Movement to Kathmandu Valley: Kavrepalanchok District Police has imposed a complete halt on vehicles entering the Kathmandu Valley from Kavre. The police have stopped vehicles at Sanga Bhanjyang and Nala Bhanjyang. Additionally, vehicles traveling to Kathmandu via the BP Highway have been held at Bhaktundebeshi, while those coming via the Araniko Highway are being held at Phakhel.

Minister Prithvi Subba Gurung Stresses the Importance of Research in Development Initiatives: Minister for Communications and Information Technology, Prithvi Subba Gurung, emphasized the significance of research for successful development projects. Speaking at a program organized by the Nepal Family Court Study, he highlighted the need to move away from haphazard development policies. He advocated for research-based approaches in sectors like health and education, to correct past mistakes and ensure effective implementation. Gurung also underscored the importance of a clear budget and needs identification for successful policy execution.

Five-Bed Hospital Built in Lomanthang, Upper Mustang, Faces Challenges in Full Operation: A five-bed basic hospital has been constructed in Lomanthang rural municipality, Upper Mustang, with a joint investment from the rural municipality and the federal government under the Integrated Health Infrastructure Development Programme. The 27-room hospital, completed at a cost of Rs 71.9 million, features an operation theatre, X-ray room, lab, maternity ward, and more. However, Lomanthang’s Chairperson, Tashi Narbu Gurung, highlighted the lack of medical equipment and staff, stressing the need for federal and provincial support for its operation.

Gold Price Hits All-Time High of 176,200 Rupees per Tola: Gold prices have reached a new record high today, surging by 1,400 rupees per tola to 176,200 rupees. This marks the highest price ever recorded for gold. The price had already risen by 1,300 rupees per tola the previous day. Silver also saw a rise, increasing by 20 rupees per tola to 2,040 rupees. The price of both metals has been climbing steadily since a brief decline earlier last week, according to the Nepal Gold and Silver Dealers Federation.