Export, import up, revenue collection down

Post Report

KATHMANDU, Oct 4 - The first month of the fiscal year 2000/2001 marked a deceleration in both narrow and broad money. Government expenditure has decelerated mainly due to a decline in both the regular and development expenditures, says a press communiqué issued by Nepal Rastra Bank (NRB) today.

NRB release says, in spite of a decline in revenue collection, resource mobilization remained high because of a significant growth in foreign cash grant receipts and non-budgetary income, thereby resulting in budgetary surplus. The rate of inflation on point to point basis dropped to less than one percent mainly because of the decline in the prices of food and beverages group.

In the external front, because of a higher growth rate of exports than that of imports, trade deficit has narrowed down compared to that of last year. The foreign exchange holdings of the banking system rose substantially due to a surplus in the balance of payment emanating from the growth in miscellaneous capital inflows. The resulting foreign exchange reserve was sufficient to cover merchandise imports for ten months and a half. In the share market, share transaction improved significantly compared to the previous month.

During the first month of the fiscal year 2000/01, broad money registered a decline of 1.7 percent (Rs.3154.8 million) amounting to Rs 181325.5 million compared to the decline of 0.2 percent (Rs. 303.7 million) during the same period last year. This was mainly due to decline in the growth of net domestic assets as well as net foreign assets. As a consequence of downward revision of interest rate on deposit, growth of imports and expansion in resource mobilization activities of non-bank financial institutions, growth of time deposits decelerated from 1.8 percent (Rs 1815.4 million) in the previous year to 1.1 percent (Rs 1367.9 million) during the review period. Narrow money declined by 3 percent (Rs 1786.9 million) during the review period compared to a decline of 4.2 percent (Rs 2119.1 million) in the previous year.

As a result of decline in credit to both government sector and private sector, total domestic credit of the banking system declined by 1.5 percent (Rs 2348.3 million) during the review period compared to an decrease of 1.2 percent (Rs. 1396.9 million) in the preceding year. The flow of bank credit to the private sector decreased by 0.2 percent (Rs 211.3 million) during the review period compared to a growth of 0.2 (88.6 million) in the preceding year.

On the fiscal front, government expenditure decreased by 7.5 percent to Rs 1645.8 million during the review period compared to a growth of 29.7 percent last year. Of the total expenditure, while regular expenditure and development expenditure decreased by 37.9 percent and 65.6 percent respectively, freeze expenditure increased by 26.4 percent. The disturbances in the functioning of banking institutions followed by problems in cash release led to such a decline in the total expenditure in spite of an increase in freeze expenditure mainly due to large volume of unspent sanctioned expenditure of last year. Resource mobilizations grew by 3.9 percent during the review period compared to 20.6 percent in the previous year. Revenue collection, a major source of resource mobilizations, stood at Rs. 1845.1 million marking a 24.1 percent decline compared to 8.3 percent growth in the previous year. Disturbances in the functioning of banking institutions as well affected the revenue collection. However, increase in the receipts from foreign cash grants and non-budgetary income resulted in the higher resources mobilization with a budgetary surplus of Rs. 968.0 million. During the review period, the government received foreign cash loan amounting to Rs. 338.1 million, and subsequently there was a surplus of Rs. 1306.1 million in the treasury.

National Urban Consumer Price Index, on point to point basis, recorded a rise of 0.2 percent during the review period compared to a rise of 5.9 percent in the previous year. A fall in the prices of food and beverages group helped to lower down the inflation rate to less than one percent. Of the overall price index, price index of food and beverages group declined by 4.4 percent compared to 6.9 percent increase in the preceding year. Despite an increase in the price index of restaurant meals, spices, milk and milk product, meat, fish and eggs, pulses as well as beverages, the declining prices of oil and ghee, cereal products, sugar and sugar products and vegetables as well as fruits contributed for such a decrease in the price index of food and beverages group. However, price index of non-food and services group accelerated from 4.6 percent in the previous year to 6.3 percent during the review period. This was only due to the rise in prices of transport and communications, housing, medicine and personal care, tobacco, education and recreation, shoes, cloth, clothing and sewing services. Regionwise, price index of Kathmandu increased by 1.5 percent while those of Terai and Hills decreased by 0.6 percent and 0.3 percent respectively.

On the external front, exports and imports both registered respective growths of 23.8 percent to Rs. 3902.9 million and 14.1 percent to Rs. 8142.7 million during the review period. During the review period, although there has been a significant increase of exports to India, exports to third countries have declined. Although exports of readymade garment, woolen carpet, jewelry and pulses to third countries have declined, exports of tanned skin and nigerseed have improved compared to that of last year. During the review period, Rs. 870 million worth of Pashmina has been exported.

The export-import ratio, which was 44.2 percent in the previous year, improved to 47.9 percent during the review period. The surge in imports was attributed mainly to a higher imports of food grains, medicine, textile, thread, chemicals, agricultural tools and machineries, plasticwares and other machinaries from India and rice, beetle nuts, crude oil, chemical fertilizer, copper wire and sheet, thread, transportation goods and spare parts, computer parts, aeroplane parts, and other machinery as well as their spare parts from third countries. The growth rate of exports was higher while that of imports remained comparatively low compared to last year. As a result, trade deficit during the review period stood at 6.4 percent amounting to Rs. 4239.8 million compared to a growth of 34.9 percent in the previous year.

Based on the monetary statistics for the first month of the fiscal year 2000/01, the overall balance of payment recorded a deficit of Rs. 886.4 million. As a result, foreign exchange holdings of the banking system increased by 23.2 percent to Rs. 94775.8 million as at mid-August 2000. Of the total reserves, 86 percent accounted for convertible currency and 14 percent for non-convertible currency.

NEPSE index up

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KATHMANDU,Oct 4 - The marginal upsurge of the NEPSE Index that has been recorded since the past few weeks continued this week too, with a jump of 2.46 points at the end of trading on Tuesday this week.

The stock market in the previous week had also made a nominal increase of 2.52 points.

According to weekly share information issued by Nepal Stock Exchange (NEPSE), the opening index on the first day of trading on Monday was 427.76 points while the closing index touched 430.22 points at the end of trading on Tuesday.

On a group-wise basis, the indices for commercial bank and hotel group rose from 496.49 to 500.48 points and from 366.81 to 367.54 respectively. Similar trend was also observed for other groups whose index touched to 321.26 from 318.41. However, the index for finance and insurance group recorded a marginal declined and touched 325.63 from 325.99. Likewise, indices for manufacturing and processing group and trading group remained unchanged at 357.70 and 119.42 points respectively.

Group-wise trading information for the week reveals that the commercial banks continued to capture majority of the share transaction with the participation of 88.60 percent. Similarly, the participation of manufacturing and processing group stood at 5.04 percent, hotel group 2.08, finance group 3.20, insurance group 0.91, and other group at 0.17 percent. However, no transaction of trading group took place in the floor of the NEPSE last week.

Of the total 412 transactions made last week, 32,4356 shares worth ver Rs 21.59 million were traded in Nepal stock Exchange floor. Trading during the previous week stood at 34,566 shares valued at Rs 24.8 million in 697 transactions.

Share trading during the last week in terms of number of transactions, share units and value of transaction was led by Nepal Industrial and Commercial Bank (NIC Bank). During last week, 6,670 unit shares of NIC Bank in 96 transactions with the transaction value worth Rs 4.00 million were traded on the floor of NEPSE.

Forty-seven companies had quoted their price for trading in the floor of NEPSE last week, out of which, shares of only 28 companies were traded. NEPSE, during last week, remained open for only two days.

Companies whose shares were traded in both trading days this week include Nepal Bank (Rs 300 - 307), Nepal Arab Bank (Rs 1,570 - 1580), Nepal SBI Bank (Rs 2,020 - 2,035), Nepal Bangladesh Bank (Rs 2,285 - 2,325), and Everest Bank (Rs-1,621 - 1,726). 

Similarly, other companies having share transactions on both days were Bank of Kathmandu (Rs 1,400 - 1,403), NIC Bank (Rs 600 - 601), Nepal Lever Ltd. (Rs 2500 - unchanged), Taragaon Regency Hotel (Rs 175 - 176), Necon Air (225 - unchanged), Rastriya Beema Sastan (Rs 1500 - unchanged), Premium Insurance (Rs 231 - 235), Kathmandu Finance (Rs 325 - unchanged) and Universal Finance and Capital Markets (Rs 180 - unchanged).

Likewise, companies, whose shares were traded for only one day include Harisiddi Tile and Bricks Factory (3100/9300), Shree Bhrikuti Paper Nepal (10/730), Everest Insurance (10/4800), Nepal Finance and Saving (25/15000), Nepal Film Development Corporation (260/29900) and Peoples' Finance (10/3500).