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The cabinet expansion and the appointment of a new finance minister have failed to lift the confidence of stock market investors. The Nepal Stock Exchange (Nepse) plunged by double-digit on Sunday, the first trading day of the week. Prime Minister Pushpa Kamal Dahal on Friday expanded the cabinet, inducting 11 ministers, in which Nepali Congress leader Dr. Prakash Saran Mahat was given the Finance Ministry portfolio. Unlike the appointment of Bishnu Poudel as finance minister in December 2022, the appointment of Dr. Mahat has received a cold response from the share market. The benchmark index fell by 20 points on Sunday. On the contrary, when Poudel took charge of the Finance Ministry on December 27, 2022, the Nepse index surged by 59.87 points. During Poudel’s tenure, the stock market had risen by 427 points. And, the market lost 180 points following his exit from the Finance Ministry. On Sunday, the benchmark index had again fallen below 1900 points as the Nepse index closed at 1888.55 points. On Sunday, the Nepse opened at 1,910.49 points and hit an intraday high of 1,928.66 points before rising to the intraday low of 1,883.04 points and settling at 1,888.55 points. The Nepse recorded a daily turnover of Rs 1.20bn on Sunday which was slightly higher than Thursday. The stock market has been on a downward spiral after the mid-term review of the monetary policy and the central bank tightening the dividend distribution of microfinance institutions (MFIs). Along with the daily turnover, the number of trade shares also increased on Sunday. The number of shares traded decreased to 3.78 million scripts from 2.75 million on Thursday. Kumari Bank Promoter Shares were traded the most on Sunday while NIC Asia Bank recorded the highest turnover of Rs 50.5 million. All the sub-indices turned red on Sunday with the trading sub-index losing the most. On Sunday, Kalinchowk Darshan Limited, Citizens Mutual Fund-1, Jeevan Bikas Laghubitta, NIC Asia Flexi CAP Fund, and Swet-Ganga Hydropower & Construction Limited led the market as top gainers while Swabhimaan Laghubitta, Prabhu Bank Debenture 2087, Kalika Laghubitta, Vijaya Laghubitta, and Maya Khola Hydropower Company were the top losers. Top Five Gainers 

A committee formed by the board of the Nepal Rastra Bank (NRB) to identify and resolve the problems concerning microfinance institutions (MFIs) has sought feedback from the public. The committee headed by NRB Executive Director Prakash Kumar Shrestha, who is the Chief of the Economic Research Department of the central bank, issued a notice on Sunday for feedback to be submitted by May 3. As protests erupted over alleged excesses by MFIs in various parts of the country, the central bank decided to form the committee which has been mandated to identify the problems and make necessary recommendations by mid-July this year. A committee member said that the problems appear to have arisen mainly due to multiple banking by MFIs to the single borrower. “Even though many borrowers have complained about the high borrowing rate, it should not be a big issue as the MFIs cannot charge interest rates exceeding 15 percent,” the committee member said. Because of the cap imposed by the central bank, MFIs could not raise the interest rate beyond 15 percent despite the rise in the cost of funds sharply amid the liquidity crunch. Borrowers who protested against the alleged misconduct of MFIs claimed that the institutions have been charging exorbitant interest rates, high service charges, and misbehaving with the borrowers. But promoters and high officials of MFIs have been rejecting the accusations of charging high interest rates while admitting that multiple banking transactions might have taken place. “Profit motives of many MFIs and a high target of lending assigned to the staffs might have led to multiple banking,” the committee member said. Many borrowers had managed to pay the loans in the past despite taking multiple MFIs in the past. But because of the closure of the businesses caused by the Covid-19 pandemic, they could not pay the loans immediately, but their liability continued to grow as cash flow halted due to the closure of the businesses, say officials of NRB and MFIs. With the borrowers failing to pay the loans, MFIs are being compared to loan sharks who charge very high interest rates for the money loaned informally to borrowers. With controversial businessperson and hospital owner Durga Prasain calling for physical attacks against the employees of the banks and financial institutions, a number of offices of MFIs and their staff faced physical assaults and vandalism in recent weeks.  

The price of gold has dropped by Rs 600 per tola in the domestic market on Monday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 108, 000 per tola today. The yellow metal was traded at Rs 108, 600 per tola on Sunday. Meanwhile, tejabi gold is being traded at Rs 107, 500 per tola. It was traded at Rs 108, 100. The price of silver has dropped by Rs 20 and is being traded at Rs 1, 390.

Continuing the upward momentum in 2023, the tourist arrivals in March have hit a four-year high signaling that tourism in Nepal has largely recovered from the impacts of the Covid-19 pandemic. The latest statistics of the Nepal Tourism Board (NTB) show tourist footfalls in March 2023 stood at 99,426, the highest since March 2019. According to NTB, Nepal welcomed 42,006 tourists in March 2022, 14,977 tourists in March 2021, and 42,776 tourists in March 2020. According to NTB statistics, 227,755 tourists visited Nepal in the first three months of 2023. Tourist arrivals have surged by 35 percent in March compared to February. Nepal welcomed 55,074 international visitors in January, 73,255 in February, and 99,426 in March. While the number of Chinese visitors is gradually improving, Nepal received the highest number of tourists from India and the US in March. According to NTB, 25,911 Indian tourists and 9,557 US visitors came to Nepal in March. The country welcomed 6,133 tourists from the United Kingdom, 4,149 from Germany, and 3,898 from Sri Lanka. While there has been a huge improvement in tourist arrivals this year, it is yet to touch the pre-Covid era. Nepal received 311,047 tourists in the first three months of 2019. The arrival of foreigners in the first three months of 2023 is 73.22 percent compared to the same period in 2019. With the easing of travel restrictions and China reponing outbound travel for its citizens, Nepali tourism entrepreneurs are pinning high hopes for 2023. NTB on its 24th anniversary announced that it aims to attract at least one million foreign tourists in 2023. In 2022, tourist arrivals reached over 600,000 without any significant contribution from China. Only 9,595 Chinese tourists visited Nepal in 2022. Tour operators say they are receiving increasing inquiries from major source markets including China of late. While the FITs (free independent travelers) have already started coming to Nepal, group travelers from the northern neighbor are yet to come here. With Nepal finally included in the list of the countries where Chinese travel agencies and online travel companies are allowed to resume, on a pilot basis, outbound group tours for Chinese citizens, travel trade entrepreneurs are expecting a surge of visitors from the northern neighbor. Travel trade entrepreneurs say that a significant contribution of Chinese tourists would be required if Nepal wants to meet the target of one million in 2023. The tour operators expect Nepal to be included in the next list of China's destination countries hopefully as early as possible. China was the second largest source market for Nepal after India before the Covid-19 pandemic.