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The increase in the cost of doing business due to rising interest rates, hike in cost of raw materials, growing inflation along with the decline in market demand have badly affected the operational efficiency of industries in Lumbini Province. As industries grapple with multiple issues, their capacity utilization has declined in the first half of the current fiscal year. According to the latest report of the Nepal Rastra Bank (NRB), the average capacity utilization of industries in Lumbini Province stood at 42.33 percent in the first half of FY 2022/23 compared to 49.22 percent during the same period of the last fiscal. The report titled ‘Provincial Economic Activities Report-Lumbini Province’ states capacity utilization of the plastic industries was the highest at 89.64 percent while dry syrup industries had the lowest at 3.91 percent. The capacity utilization of industries such as paper, tablets, aluminum, rosin, and animal feed was above the average, the report said. The decline in the capacity utilization of dry syrup, electric wire, cable, concrete, rice, beverages, GI pipe, and pharmaceutical production industries led to a decline in the average capacity utilization of the industries in Lumbini Province. Except for the rosin and paper industries, all the other major industries’ production has declined in this fiscal year. Among the industries included in the study, the production of rosin increased by 30.66 percent compared to the same period last fiscal year. The easy availability of raw materials and high demand in other countries including India helped the increment of rosin production. Paper production surged by 30.59 percent in the first half of FY 2022/23, particularly due to the increased demand for Nepali paper. Lumbini Province has been at the center of Nepal’s cement production. However, cement production in the province declined by 54.09 percent in the current fiscal year. “Cement production decreased mainly due to a decline in demand, problems in electricity supply, and a surge in prices of coal and petroleum products in the international market,” reads the report. Out of the 60 cement industries operating in Nepal, 45 are in Lumbini province. According to NRB, while there is a demand for clinker and cement produced from Lumbini Province in the Indian market, there has been a decrease in the production of cement, clinker, and rods during the review period due to a lack of ease in exports, obstacles in limestone mining and lack of internal demand. The NRB study shows the production of aluminum decreased by 65.47 percent, rice production by 58.79 percent, concrete production by 52.09 percent, electric wires, and cables by 48.64 percent, wheat flour by 36.31 percent, tablet by 29.39 percent, noodle by 16.59 percent, dry syrup by 19.49 percent, liquor by 10.95 percent, and capsule by 10.33 percent. Meanwhile, the disbursement of loans by banks and financial institutions (BFIs) to the industrial sector increased marginally in the first half of FY 2022/23. The BFIs’ loan disbursement to industries increased by 6.09 percent to Rs 126.03bn in the first half of the current fiscal year compared to a growth of 4.43 percent during the corresponding period of FY 2021/22. According to NRB, of the total loans, Rupandehi district has the highest share of 58.92 percent while Rukum East district has the lowest share of 0.03 percent. In the review period, the BFIs’ loans to mining industries surged by 194.15 percent, the electricity sector by 191.10 percent, and the agriculture sector by 0.58 percent. The share of the industrial sector in total loans is 22.91 percent.

The Nepal Stock Exchange (NEPSE) plunged by 2. 94 points to close at 2,091.39 points on Monday. Similarly, the sensitive index surged by 1. 82 points to close at 392. 38 points. A total of 12,975,168-unit shares of 276 companies were traded for Rs 4. 74 billion. Meanwhile, Central Finance Co. Ltd, Laxmi Equity Fund and Mountain Energy Nepal Limited were the top gainers today with their price surging by 10. 00 percent. Likewise, Unique Nepal Laghubitta Bittiya Sanstha Limited was the top loser with its price dropped by 10. 00 percent. At the end of the day, the total market capitalization stood at Rs 3. 06 trillion.

Real estate transactions have increased noticeably in the month of Jestha (mid-May to mid-June). After a year in a slump, the real estate transactions increased in Chaitra (mid-March to mid-April) before declining again in Baisakh (mid-April to mid-May). The latest data published by the Department of Land Management and Archive (DoLMA) show the number of real estate transactions in Jestha reached the highest in the current fiscal year 2022/23. According to DoLMA, a total of 55,0069 real estate transactions were recorded in Jestha which is 12,608 more than 42,461 in Baisakh. The real estate business spiraled into a downturn after the central bank and the government took measures to cool down the overheated real estate market over a year ago. The Nepal Rastra Bank made it harder for banks and financial institutions to disburse housing and real estate loans to their clients, while the government came up with the Land Use Regulations which halted the plotting of lands in the country directly affecting the real estate market which had peaked in late 2021. In Ashad (mid-June to mid-July), 33,834 real estate transactions were recorded which decreased to 25,789 in Ashwin (mid-September to mid-October), the lowest in the current fiscal year. Revenue collection According to DoLMA, a total of Rs 3.75bn was raised from real estate transactions in Jestha which was Rs 3.10bn in Baisakh. Despite the increase in transactions, the amount of revenue collection is low as Rs 4.51 billion was collected from 49,000 transactions in Chaitra. The data shows the government has collected Rs 36.88bn in revenue from real estate transactions in the 11 months of the current fiscal year.  

The Nepal Stock Exchange (NEPSE) gained 52.26 points to close at 2,094.33 points on Sunday. Similarly, the sensitive index surged by 7.18 points to close at 390. 56 points. A total of 12,095,966-unit shares of 280 companies were traded for Rs 4. 86 billion. Meanwhile, Nepal Insurance Co. Ltd, Prabhu Life Insurance Limited, Green Ventures Limited, Super Madi Hydropower Limited, Aatmanirbhar Laghubitta Bittiya Sanstha Limited were the top gainers today, with their price surging by 10. 00 percent. Similarly, Shuvam Power Limited was the top loser as its price fell by 5.58 percent. At the end of the day, total market capitalization stood at Rs 3. 06 trillion.