Stock market capitalization rise by 39.1% in two months of Q1 -- NRB Deposit and lending rates of commercial banks at 5.01% and 11.95% respectively; consumer inflation increase by 8%

ShareSansar, November 7:

Nepal Rastra Bank has informed that stock market capitalization increased by 39.1 percent to Rs. 554.05 billion in the first two months of the current fiscal year compared to the same period of the last fiscal year 2069/70.

According to the central bank’s report on ‘Current Macroeconomic Situation of Nepal (Based on Two Months' Data of 2013/14)’, the ratio of market capitalization to GDP stood at 32.6 percent in mid-September 2013 compared to 25.9 percent a year ago.

The NEPSE index, on y-o-y basis, increased by 31.1 percent to 551.7 points in mid-September 2013. The index had increased by 31.0 percent in the corresponding period of the previous year and stood at 420.8 points as at mid-September 2012.

Of the total market capitalization as of mid-September 2013, the share of banks and financial institutions (including insurance companies) stood at 73.0 percent while that of manufacturing and processing companies, hotels, business entities, hydropower and other sectors stood at 2.8 percent, 1.6 percent, 0.2 percent, 7.1 percent and 15.3 percent respectively.

Total number of companies listed at the NEPSE increased from 216 in mid-September 2012 to 226 in mid-September 2013. Of the total listed companies the number of banks and financial institutions (including insurance companies) stood at 194 followed by production and processing industries (18), hotels (4), business entities (4), hydropower (4) and other companies (2).

Total paid-up capital of the listed companies stood at Rs. 129.35 billion in mid-September 2013, registering an increase of 15.7 percent over mid-September 2012.

Additional securities worth Rs. 4.05 billion comprising ordinary share of Rs. 2.79 billion, right share of Rs. 0.17 billion and bonus share of Rs. 1.09 billion were listed at the NEPSE during the two months of 2013/14.

Deposit and lending rates of commercial banks at 5.01% and 11.95% respectively

On the interest rate front, the central bank has informed that the weighted average Treasury bill rate and inter-bank transaction rate, however, decreased in September 2013 compared to the same period of the previous year.

The weighted average 91-day Treasury bill rate decreased to 0.14 percent in September 2013 compared to 0.15 percent a year ago. The weighted average inter-bank transaction rate among commercial banks remained at 0.27 percent in September 2013 compared to 0.34 percent in September 2012.

Likewise, the weighted average inter-bank rate among other financial institutions declined to 3.62 percent in September 2013 from 6.65 percent in September 2012.

In mid-September 2013, the weighted average deposit and lending rates of commercial banks remained at 5.01 percent and 11.95 percent respectively.

Credit flow of BFIs increase by 1.1 percent

On the credit flow of banks and financial institutions, the central bank has noted that in the two months of 2013/14, loans and advances of BFIs increased by 1.1 percent (Rs. 12.75 billion) compared to a growth of 2.7 percent (Rs. 25.89 billion) in the corresponding period of the previous year.

In the review period, loans and advances of commercial banks increased by 0.9 percent, development banks by 3.3 percent and finance companies by 2.3 percent.

Similarly, the credit to private sector from BFIs increased by 1.1 percent (Rs. 10.82 billion) in the review period compared to a growth of 2.1 percent (Rs. 16.59 billion) in the same period of the previous year.

On y-o-y basis, the credit to private sector from BFIs increased by 19.6 percent in mid-September 2013. In the review period, credit to private sector from commercial banks and development banks increased by 1.1 percent and 2.3 percent respectively while that of finance companies decreased by 0.9 percent.

Of the total credit from BFIs, the credit to industrial production sector increased by Rs. 2.67 billion during the review period compared to an increase of Rs. 5.39 billion in the same period of the previous year. However, credit to agriculture sector decreased by Rs. 0.46 billion in the review period compared to an increase of Rs. 2.10 billion in the corresponding period of the previous year.

Deposit mobilization of BFIs increased by 1.0 percent 

Deposit mobilization of banks and financial institutions (BFIs) increased by 1.0 percent (Rs. 11.50 billion) in the two months of 2013/14.

Such deposit mobilization had increased by 0.6 percent (Rs. 6.15 billion) in the corresponding period of the previous year. On y-o-y basis, deposit mobilization of BFIs expanded by 17.8 percent in mid-September 2013.

In the review period, deposit mobilization of commercial banks increased by 0.9 percent, development banks by 2.7 percent and finance companies by 3.2 percent.

The deposit mobilization of commercial banks decreased by 0.1 percent while that of development banks and finance companies increased by 2.8 percent and 1.9 respectively in the same period of the previous year.

Consumer inflation well within target

The central bank has also noted that the consumer price inflation in the first two months of the current fiscal year was well within the target as it has increased by 8.0 percent as compared to the same period last fiscal year.

The y-o-y inflation as measured by the consumer price index increased by 8.0 percent in mid-September 2013 as compared to 11.2 percent in the corresponding period of the previous year.

The central bank further noted that the indices of food and beverage group and non-food and services group increased by 9.4 percent and 6.8 percent respectively during the review period. Such indices had increased by 10.4 percent and 11.9 percent respectively in the corresponding period of previous year.