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The Nepal Stock Exchange (NEPSE) gained 6.37 points to close at 2,121.62 points on Wednesday.

Similarly, the sensitive index surged by 1.67 points to close at 374. 91 points.

A total of 12,950,407-unit shares of 312 companies were traded for Rs 5. 89 billion.

Meanwhile, Samriddhi Finance Company Limited (SFCL)and Mid Solu Hydropower Limited (MSHL) were the top gainers today, with their price surging by 10. 00 percent.

Likewise, Sayapatri Hydropower Limited (SPHL) was the top loser as its price fell by 4.48 percent.

At the end of the day, total market capitalization stood at Rs 3. 36 trillion.

The government is preparing a five-year strategy to make comprehensive improvements in its anti-money laundering (AML) compliance.

Last week, a meeting of the Money Laundering Steering Committee, chaired by Minister for Finance Barsha Man Pun, approved a draft of the strategy. The strategy will be implemented once it is endorsed by the Cabinet.

The steering committee includes the Minister for Law, Justice and Parliamentary Affairs, the Chief Secretary, the Governor of Nepal Rastra Bank, and the Secretary (Law) of the Office of the Prime Minister and Council of Ministers as the members. The Revenue Secretary serves as the Member Secretary of the committee.

The ‘National Strategy and Action Plan on the Prevention of Financial Investments in Money Laundering and Terrorist Activities’ follows several legal reforms made by the government over the past year to improve anti-money laundering compliance.

A member of the steering committee stated that the plan is to implement the strategy from the first month of the new fiscal year, which begins in mid-July. The strategy includes action plans to control corruption, revenue evasion, transactions through the Hundi system, and cryptocurrency transactions. It also addresses criminal activities such as organized crime, internal terrorism, theft, dacoity, counterfeit currency transactions, black-marketeering, and fraudulent activities.

Nepal was on the gray list of the Financial Action Task Force (FATF) from 2009 to 2014 due to its failure to implement the task force’s recommendations. Although Nepal has made considerable progress by drafting necessary laws and regulations, the country remains on a watch list of countries under scrutiny.

Following the mutual evaluation conducted by the of the Asia Pacific Group on Money Laundering (APG)  in Oct 2022, Nepal has undertaken significant technical reforms, including legal, policy, and structural changes, aimed at improving the effectiveness of its anti-money laundering efforts. Nepal is a member state of the APG—the associate member of FATF for the Asia Pacific region.

In response to recommendations from both the FATF and the APG, Nepal endorsed the Bill to Amend Some Acts Related to Preventing Money Laundering and Promoting Business in February. This bill includes revisions to 20 laws to address legislative shortcomings in controlling money laundering and terrorist financing.

The APG delegation is scheduled to visit Nepal again in October for the next phase of their assessment.

Both the FATF and the APG have advised Nepal to more effectively implement its existing legal framework and to make necessary adjustments to enhance its anti-money laundering measures.

The FATF has warned that if Nepal does not improve its current situation, the country risks being placed on the ‘gray list’ for money laundering concerns.

Being on the ‘gray list’ would significantly damage Nepal’s international credit reputation. It would likely lead to a reduction in foreign aid, loans, and investments, and make international banking transactions more challenging.

Additionally, there is a risk that remittance flows could decrease, the informal ‘hundi’ money transfer system could proliferate, and the overall economy could face a severe crisis, the Ministry stated.

The Nepal Stock Exchange (NEPSE) gained 33.15 points to close at 2,115.24 points on Tuesday.

Similarly, the sensitive index surged by 4.18 points to close at 373. 23 points.

A total of 12,665,329-unit shares of 311 companies were traded for Rs 5. 55 billion.

Meanwhile, Barun Hydropower Co. Ltd. (BARUN), Green Ventures Limited (GVL), Kutheli Bukhari Small Hydropower Limited (KBSH) andBhagawati Hydropower Development Company Limited (BGWT) were the top gainers today, with their price surging by 10. 00 percent. Likewise, Samling Power Company Limited (SPC) the top loser as its price fell by 5.81 percent.

At the end of the day, total market capitalization stood at Rs 3. 35 trillion.

Nepal Rastra Bank has reported that inflation was around 4.5 percent in the last Nepali month of Baishakh. According to the central bank's report, which includes data from the first 10 months of the fiscal year 2080-81, the annual point-to-point consumer inflation in Baishakh was 4.40 percent, down from 7.41 percent in the same month last year.

In Baishakh, the inflation rate in the food and beverage category was 6.27 percent, while in the non-food and services category, it was 2.96 percent. The annual point-to-point price index for the vegetable subgroup under the food and beverage category increased by 23.11 percent, pulses and legumes by 10.85 percent, spices by 8.98 percent, food and food-related items by 7.42 percent, and sugar and sugar-related items by 7.25 percent. However, the price index for the ghee and oil subgroup decreased by 7.13 percent.

The annual point-to-point price index for various goods and services under the non-food and services category increased by 12.26 percent, education by 5.64 percent, and clothing and footwear by 3.46 percent, while the communication subgroup's price index decreased by 0.48 percent.

In Baishakh, the annual point-to-point consumer inflation was 4.30 percent in Kathmandu Valley, 4.32 percent in the Tarai, 4.7 percent in the Hills, and 4.22 percent in the Mountains. In the same month last year, inflation rates in these regions were 7.68 percent, 7.15 percent, 7.57 percent, and 7.12 percent, respectively.

Forex reserves at Rs 1.94trn

The central bank's report also highlighted foreign exchange reserves, which increased by 26.2 percent from Rs 1.53trn at the end of Asar 2080 to Rs 1.94trn in Baishakh 2081. In terms of US dollars, foreign exchange reserves rose by 24.2 percent from $11.71bn at the end of Asar 2080 to $14.54bn at the end of Baishakh 2081.

Of the total foreign exchange reserves, those held by the central bank were Rs 1.34bn at the end of Asar 2080, which increased by 28 percent to reach Rs 1.72bn at the end of Baishakh 2081. Reserves held by banks and financial institutions (excluding Nepal Rastra Bank) were Rs 193.59bn at the end of Asar 2080, which increased by 13.8 percent to Rs 220.38bn at the end of Baishakh 2081.

According to the central bank, based on import data from the first 10 months of the fiscal year 2080-81, the banking sector's foreign exchange reserves are sufficient to cover 15.1 months of goods imports and 12.6 months of goods and services imports.

Remittances reach Rs 1.19trn

According to Nepal Rastra Bank, remittances increased by 19.2 percent to Rs 1.19trn in the first 10 months of the current fiscal year 2080-81. 

Although the number of people going abroad for employment was high in the past two years and has decreased slightly this year, the total number, including new labor permits and renewals, is still more than 500,000. Due to the high number of Nepalis going for foreign employment in the past two years, remittances have seen a significant increase.

In the first 10 months of the current fiscal year, 374,887 Nepalis received final labor approval for foreign employment, and 237,893 received renewed labor approval. In the same period last fiscal year, 421,279 Nepalis received final labor approval for foreign employment, and 238,976 received renewed labor approval.

During this period, net transfers increased by 17.2 percent to Rs 1.30trn.