Resources/Bussiness and Economic Glimpse

BID TO EMPOWER FINANCIALLY WEAK

9.Nov.2010

Confederation of Nepalese Industries (CNI) and Adam Smith International (ASI) on Monday organized a joint workshop to discuss the areas that where more jobs could be created to raise the income of people living below the poverty line.

The programme was held to initiate the M4P approach or making markets for the poor people to bring sustainable growth in their living standards, while exploring the sub-sectors of the agriculture and tourism sectors.

Highlighting the importance of tourism in the sustainable development of the pro-poor, Pitambar Sharma, team member and tourism advisor at the proposed Nepal Market Development Programme (NMDP) said that the every penny generated from the tourism business is divided and further directed to other sectors as well. “In the present context, of every US dollar spent by tourists 65 cents goes to other like productive sectors and handicrafts, etc.,” said Sharma.

Diwakar Poudel, team member and Agriculture Advisor to NMDP, said, “Although the agricultural sector contributes 33 percent to the gross domestic product of the country, the involvement of human resources in the sector is gradually declining due to better urban centric income generating factors.”
Five prominent entrepreneurs on behalf of CNI gave presentations on their respective sub-sectors’ present scenario, opportunities and challenges amid the prevailing situation in the country.

Sumit Kedia, director of Kedia Organisation; Varun Chaudhary, executive director of Chaudhary Group; Ashok Murarka, chairman of Commercial Agriculture Alliance; Hari Bhakta Sharma, executive director of Deurali Janta Pharmaceuticals and Sandeep Agrawal, director of Shiva Shakti Group, gave the presentations during the programme followed by comments from and discussions among the audience.
The topics were Dairy Farming,

NTFP (Medicinal Herbs and Ayurveda), Orthodox tea including Tea Garden Hospitality, Agro Tourism & Cultural Heritage and Sugarcane Cultivation. Kapil Tamot, Adam Smith International’s Country Head for Nepal and Regional Manager for South Asia, said that the operational plan for the first 12 months of the programme will be designed by February, 2011.

NEPAL IS A 142ND IN TELECOM SERVICE

6.Nov.2010

Nepal has been ranked in the 142nd position among 159 countries in the ICT Development Index (IDI) 2010 published by the International Telecommunication Union (ITU), the UN agency for information and communication technologies.

The ranking is based on development in information technology and the telecom sector of 2008. In 2007, Nepal was in the 141st position in the IDI, according to the report Measuring the Information Society 2010 of the ITU.

The top 10 countries in the 2008 IDI are Sweden, Luxembourg, South Korea, Denmark, the Netherlands, Iceland, Switzerland, Japan, Norway and the UK. Overall, countries that rank toward the top of the IDI are from the developed world, whereas most of these toward the bottom are from the least developed countries having low-income capacity.

The report said that despite the economic crisis, use of information and communication technology-based services such as mobile phones and the internet had continued to grow worldwide. By the end of 2009, there were an estimated 4.5 billion mobile cellular subscriptions, corresponding to 67 per 100 inhabitants globally. “By the end of 2009, mobile cellular penetration in developing countries has more than doubled since 2005, when it stood at only 23 percent,” the report stated. “Internet penetration in the developed countries reached 64 percent and in the developing countries it reached only 18 percent.”
According to the ITU, one of the main challenges in offering internet service to more people is the limited availability of fixed broadband access which is primarily confined to internet users in the developed countries and some developing countries. Currently, promising developments are taking place in the mobile broadband sector.

“The introduction of high-speed mobile internet access in an increasing number of countries will further boost the number of users, particularly developing countries,” stated the report.
It said that mobile broadband subscriptions had grown steadily, and in 2008 surpassed those for fixed broadband.

Among South Asian countries, Sri Lanka is at number 105, India 117, Bhutan 123, Pakistan 128 and Bangladesh 137 in the 2008 IDI. With more than half of all the fixed broadband subscribers in the developing countries, northern neighbour China has been ranked in the 79th position. It also accounts for one-third of all the internet users in the developing countries.

Internet use has also continued to swell, albeit at a slower pace. In 2009, an estimated 26 percent of the world population or 1.7 billion people were using the internet. The percentage remained much higher in the developed countries compared to the developing world where four out of five people are still excluded from cyberspace.

Nepal has brought down the mobile tariff dramatically by 64 percent between 2008 and 2009. In the same period, Azerbaijan slashed the rates by 81 percent, Sri Lanka by 67 percent, Ukraine by 58 percent and Mexico by 52 percent, according to the ITU.

RASUWA LOCALS TO GET CREDIT FOR BUYING SHARES OF CHILIME

5.Nov.2010

Chilime Hydropower Company on Thursday signed a tripartite agreement with Mega Bank and Janata Bank to provide credit to 54,000 local residents of Rasuwa district to purchase shares issued by the project.

On Nov. 10, the company will make the initial public offering for 960,000 shares, or 10 percent of the total share issue, to the locals of Rasuwa where the project is situated. Megha Bank CEO Anil Keshari Shah and Janata Bank CEO Bijay Pant signed the agreement with Chilime Hydro to provide the loans at an interest of 15.5 percent.

“This is a very good start to empower rural communities financially by making them owners of the project located in their area. From now onwards, the locals will get economic benefits as owners of the project,” Shah said.

He added that enabling underprivileged local communalities who don’t have access to the banking system to become shareholders in the project in their area would help in their economic development. “This initiative is just a start. We want to work with more local communities living in rural parts of the country and contribute to their economic prosperity,” Shah said.

Out of the 960,000 shares set aside for the residents of 18 VDCs of Rasuwa, people in the three project-affected VDCs, namely Goljung, Chilime and Syafru, will get 636,000 shares at Rs. 100 per unit while residents of the other 15 VDCs will have to pay Rs. 324 per share including a premium of Rs 223.70.
The locals of Rasuwa affected by the project can apply for a maximum of 200 shares and a minimum of 10 shares each.

Meanwhile, to provide access to the banking system for the locals of Rasuwa, Megha Bank and Janata Bank have established centers at Syafru and Dhunche respectively. Megha Bank will be working in eight VDCs from its center at Syafru while Janata Bank will work in 10 VDCs from its center at Dhunche.
Chilime Hydropower, a subsidiary of the Nepal Electricity Authority, developed the 22.1 MW Chilime Hydropower Project in Rasuwa which went into commercial operation in 2003. Chilime Hydropower is the country’s first hydropower company established with domestic capital and technical know-how.

THE CIVIL SERVICE

5.Nov.2010

Working for the government brings prestige, job security and a pension. Sounds good? It sure does. Government service is thus the first preference for many jobseekers. The first step for anyone wishing to be a government employee is passing the examination taken by the Public Service Commission. The PSC is the official agency that selects personnel needed by the government.

All the members of the civil service are recruited through an open competitive examination conducted by the PSC. The police and the army do their own hiring. However, its representative sits on their selection board.

“A candidate should have an academic degree and knowledge of general administration and the department one is applying to work in besides a command of the Nepali and English languages,” said PSC spokesperson Niranjan Prasad Upadhyay.

Job hopefuls also need to exhibit leadership quality, interpersonal skill and stress handling capability. Candidates passing the PSC exam undergo Basic Administrative Training at Staff College at Jawalakhel which is a six-month programme.

The Nepal Civil Service Act 1956 has classified civil servants into two categories-gazetted services and non-gazetted services. Gazetted services are further grouped into classes I, II and III. Class III is the entry level for civil officers, which is followed by under secretary, joint secretary and secretary. “An officer should serve in each position for at least five years to be eligible for successive promotion,” said Upadhyay. The minimum service duration has been lowered to four years for women, members of indigenous communities, Madhesis, Dalits, the handicapped and those belonging to deprived communities. Officials holding a doctoral degree also qualify for the reduced service period.

Depending on the academic background, an applicant can choose to apply for one of the two gazetted services-technical officer or non-technical officer. A candidate applying for a non-technical position has to pass a preliminary test which is followed by a written exams and interview. Those applying for technical positions do not need to sit for the preliminary test. According to Upadhyay, the written examination for technical officers is mainly based on objective questions.

The administrative division has four sub-divisions including general administration, account, revenue and foreign services. “The office manages separate examinations for the candidates applying for revenue and foreign services,” said Upadhyay.

Until a few years ago, there used to be very little participation of women in the examination taken by the PSC. Nowadays, however, more women are applying for government service. “The recent instance of 14 women officers being selected for the foreign service shows the increasing attraction of women in this sector,” he said.

The PSC invites job applications as per the recommendation of the Ministry of General Administration. According to Upadhyay, the PSC is planning to act only as a monitoring authority for recruitment in the civil service in the near future.

The age limit for candidates is 35 years for men while it is 40 years for women and members of indigenous communities, Madhesis, Dalits, the handicapped and those belonging to deprived communities. The minimum academic qualification is a bachelor’s degree. Currently, the government has reserved 45 percent of the seats in the civil service under the inclusive provision. The starting salary of an officer in both technical and administrative divisions is Rs 13,990.

MANANG TO GET ROAD LINK

5.Nov.2010

Two roads are under construction to link Simikot- one from Nepal and antoher from the China side
The Nepal Army has stated that it would connect Chame, district headquarters of Manang, by road by mid-February.

The army has been working to expand the road network to three remote districts-Mugu, Dolpa and Manang. It had targeted taking the road to Manang by mid-November, but work had to be stopped following calls from local residents and tourism entrepreneurs not to conduct blasting because of the peak tourist season.

We have postponed the blasting work for two months. This will push the construction work back by a few months,” said Col. Uddhab Bista of the Nepal Army’s Development Works Directorate. “Manang will have a road connection by mid-February 2011.”

Of the country’s 75 districts, Mugu, Dolpa, Manang and Humla are still not connected by roads. The government had planned to link Solukhumbu, Manang, Mugu and Bajura to the road network in the last fiscal year, however, roads were built only in Solukhumbu and Bajura.

According to the Nepal Army, of the total length 65 km of the Besisahar-Chame road, 55 km of gravel road has been completed and construction of the remaining 10 km will begin soon. The project is being constructed at a total cost of Rs 1.05 billion.

Ministry of Physical Planning and Works have said that there were two roads under construction to link Simikot-one from Nepal which will be around 200 km long and another from the Chinese side of the border stretching 88 km.

Mukti Gautam, senior divisional engineer at the Department of Roads, said that the work of connecting Simikot by road from the Chinese side would be completed first because of the smaller length and the completion of around 35 km of track opening. “The work of linking Simikot from the Nepal side is also on. As of the last fiscal year, 42 km of road track has been opened,” he added.For the current fiscal year, the ministry has demanded a budget allocation of Rs. 200 million for the 91-km long Nagma-Gamgadhi road in Mugu, Rs. 150 million for the 110-km Jajarkot-Dunai road in Dolpa, Rs. 80 million for the Besisahar-Chame road and Rs. 100 to Rs. 150 million for the Simikot road, said the ministry.”We will link Gamgadhi by mid-November 2011 because 40 km of track has already been opened,” said Bista. “As for the road to Dunai, it might take up to the fiscal year 2012-13 because of the delay in finalising the road alignment.”Following the dispute over the road alignment and lack of consensus among political parties leading to a delay in the work, the government had frozen the budget of Rs. 80 million allocated for the road to Dunai in the 2008-09. After a series of discussions, the final alignment from Jajarkot to Dubai of 110 km in length was approved some eight months ago. “Of the total length, 30 km of track opening work has been completed and Nepal Army troops have been deployed in four locations for the construction of this section,” said Bista.

CEMENT INDUSTRIES SEE DEMAND SLUMP

5.Nov.2010

Development activities have slowed in the absence of a budget, and construction of housing projects has slackened following Nepal Rastra Bank’s curb on real estate lending.

Cement factories in the Parsa-Bara Industrial Corridor are heading towards a crisis for lack of adequate demand at a time when construction activities normally intensify.

Development activities have slowed in the absence of a budget, and construction of housing projects has slackened following Nepal Rastra Bank’s curb on real estate lending. The central bank has recently lifted restrictions on lending to housing projects through the new monetary policy, but loans for buying land are still barred.

Entrepreneurs said they had been forced to sell cement at a discount of 30 percent amid the slump in demand.

Rajesh Kyal, manager of Star Cement, said that demand for cement fell with a decline in building projects following the central bank’s policy to restrict credit to the realty sector. Even big investors are hesitating to invest in this sector due to political instability in the country. “The cement industry could suffer a total collapse if the situation continues for a long time,” he added.

An increase in the supply of cement due to new factories coming online and smuggling from India are other factors that have led to a decrease in the price of cement, said Ashok Baidhya, manager of Nepal Shalimar Cement. The cost of production, however, has risen because of load-shedding and multiple taxes being imposed on the highways by different authorities and agencies.

The country has become self-sufficient in cement as many entrepreneurs have invested millions of rupees in its production. Baidhya said that the government should promote the use of domestic cement in development projects to protect the industry.

There are eight cement factories operating in the Parsa-Bara Industrial Corridor. They are Star, Nepal Shalimar, Viswakarma, Shree, Krishna, Ambe, Jagadamba and Tri Shakti which import raw materials from India.

Smugglers have also been selling bogus cement packed in bags marked with Indian brands. However, the authorities have failed to monitor the market effectively. Consumers have been using Indian cement as it is relatively cheaper than the domestic variety.

CDS FACILITATES ELECTRONIC SHARE OWNERSHIP TRANSFER

7.Oct.2010

The Central Depository System regulation went into effect Wednesday paving the way for the establishment of CDS companies. The Securities Board of Nepal, which recently endorsed the regulation, will be implementing it.

“With the opening of CDS companies, share ownership transfers will be done electronically instead of manually as is being done presently,” said SEBON. As the CDS facilitates electronic record keeping of the data related to the listed companies and their stock besides the accounts of the shareholders, ownership transfer and share trading can be done in a flash.

Although the Nepal Stock Exchange automated trading on Aug. 24, 2007, the clearance and settlement of transactions are still being done manually.

“If things go smoothly, the CDS company will come into full-fledged operation within this fiscal year,” said Surbir Poudel. “It will not take much time as the process of establishing the company was progressing simultaneously with the CDS regulation.” SEBON and NEPSE are working to establish the CDS system with the technical assistance of Central Depository Services India Limited. NEPSE will be a major stakeholder in the company along with the listed companies and security traders (merchant banks and stockbrokers).

As per the regulation, the stock exchange, commercial banks, citizen investment trust, foreign institutional investors, non-banking financial institutions, depository participants and firms referred by SEBON with a minimum net worth of Rs. 200 million can hold shares in the CDS company.

According to a NEPSE official, NEPSE has agreed in principle with eight prominent commercial banks and the Citizen Investment Trust to promote a CDS company.

A draft of the memorandum of association and the articles of association of the proposed company has already been prepared, added the official.

GOAT SALES MAY REACH 40K

7.Oct.2010

Nepalis are the second most avid meat eaters in South Asia. And during Dashain, they feast like there is no tomorrow.

The Kathmandu Valley alone consumes 40,000 to 45,000 goats during the festival, said traders. This year, they expect to sell between 35,000 to 40,000 animals.

Traders and state-owned entities like Nepal Food Corporation have started bringing in goats from different parts of the country to Kathmandu. A majority of the goats come from Salyan, Surkhet, Kohalpur, Nepalgunj, Ramechhap and Trishuli. NFC plans to sell about 4,000 goats.

“The weekly supply of goats into the valley amounts to 4,000 out of which 2,700-2,800 are imported from India,” said Deepak Thapa, president of the Nepal Livestock Traders Association. He added that 12-13 truckloads of goats arrive in Kathmandu per week during regular times. During Dashain, deliveries jump to 30-40 truckloads.

According to officials, NFC has procured 1,550 goats from Bardia, Nepalgunj, Dang, Hetauda, Lahan and Kavre which are ready for shipment to Kathmandu. “Considering the rate of procurement, we are likely to meet the target of 4,000 goats on time,” said Bijay Dhoj Thapa, deputy general manager of NFC.
He added that the rest of the goats would be procured within a week. Last Dashain, the corporation had only been able to procure 2,754 goats out of its target of 6,000. It plans to start selling the goats from Ghatasthapana. “The price will be fixed on the same day,” Thapa added.

A report of the Food and Agriculture Organization shows that Nepal is the second highest consumer of meat after Pakistan in the South Asia region. The annual per capita consumption of meat in Nepal is 10 kg compared to 12 kg in Pakistan, 6.5 kg in Sri Lanka, 5 kg in India and 3 kg in Bhutan and Bangladesh.

According to government statistics, Nepal imports meat worth Rs. 15 billion annually, making it one of the largest imports after petroleum, gold and motor vehicles. The annual consumption of meat in the country amounts to 248,573 tons, said the Ministry of Agriculture. Buffalo meat is consumed in the highest quantity (65 percent) followed by goats and other livestock (20 percent) and pork (7 percent).

$35M INFRASTRUCTURE FOR SIX TOWNS

7.Oct.2010

The government is preparing to start a project to develop the physical infrastructure and expand the capacity of six municipalities with the support of the World Bank in an effort to address the needs of rapid urbanization.

The Urban Governance and Development Programme (UGDP) has selected Mechinagar, Itahari, Dhankuta, Tansen, Lekhnath and Baglung municipalities for intervention. The programme is expected to launch in January 2011. The government and the World Bank will jointly invest US$ 35 million, and GTZ will support the institutional development of the municipalities.

According to the Ministry of Physical Planning and Works, the six municipalities were selected based on the National Urban Policy 2007, their population, possibilities for development, inter-relation with villages and financial capacity, among others.

“Internal migration to cities has increased rapidly along with urbanization and high population growth. However, the existing infrastructure is not adequate to address the needs of urbanization,” said Suresh Prakash Acharya, joint secretary at the ministry. “This type of project helps local bodies to enhance their governing capacity and develop social and physical infrastructure required by the increasing population in the cities.”

Internal migration to large and small towns along the East-West Highway and the North-South Corridor has risen. As per the National Planning Commission, the population of Kathmandu will double in the next 10 years, and one-third of the total national population will be residing in cities.

Keeping in mind the need for speedy urbanization, the government had started implementing municipal infrastructure development plans through the Urban and Environmental Improvement Project in 2002 in nine municipalitiesKathmandu, Banepa, Dhulikhel, Panauti, Ratnanagar, Bharatpur, Kamalamai, Hetauda and Bidur.

Similarly, the Secondary Towns Integrated Urban Environment Improvement Project is being carried out in Biratnagar, Butwal and Birgunj with joint funding by the government, the Asian Development Bank, the OPEC Fund for International Development and the respective sub-metropolitan cities and municipalities.

The UGDP is the first project dealing with physical infrastructure development of municipalities being funded by the World Bank. “A pre-feasibility study of the UGDP is already complete. We have just started a detailed study,” said Acharya. “Hopefully, implementation will start by January next year.”

The UGDP is mainly targeted at expansion of socio-economic infrastructure, road construction, sewage and waste management, drinking water and capacity building of the municipalities. The contributions of the government and the World Bank, municipal-wise resource allocation and target activities will be known only after the detailed study which is expected to be finished by January, said the ministry.

HIT THE HIGHWAY

7.Oct.2010

With Dashain round the corner when the annual mass migration to one’s homes takes place, transport companies have been overwhelmed by people seeking bus tickets. They say that bookings from Kathmandu to eastern and western Nepal have crossed 90 and 70 percent respectively.

Every year, hundreds of thousands of people living in the capital return to their homes for the festival. Hopeful travellers besiege the ticket counters at Gongabu Bus Park while bus companies press extra buses into service to handle the exodus.

Around 1,000 buses, minibuses, microbuses and taxis stream out of Kathmandu to various parts of eastern and western Nepal on normal days. During the first week of Dashain, the flow turns into a flood of up to 2,500 vehicles daily.

Transport companies said 80 percent of the bus tickets were sold within three-four days when advance booking opened on Sept. 21. Almost all the leading bus operators said they were all sold out for Dashain.
“Ticket bookings for eastern Nepal are relatively higher than bookings for western Nepal,” said Ajay Sharma of Agni Yatayat.

Agni operates daily bus services from Kathmandu to around 10 destinations including Pokhara, Malangwa, Janakpur, Biratnagar, Gaighat and Jhapa. “Last Dashain, we had 20-22 buses in service. We’ve added fewer new buses this year,” said Sharma. With tickets on the Kathmandu-Biratnagar sector already sold out, Agni is planning to add two buses on this route.

Miteri Yatayat has 31 buses in service. It links Kathmandu with 15 destinations in the country. “We have added 11 buses for Dashain in response to the rush of passengers,” said Rishi Shrestha, proprietor of Miteri Yatayat. “We had to call the police to maintain order as hundreds of people queued up to get tickets in front of our booking office when booking opened.” Miteri is adding two buses on its Jhapa service.

Makalu Yatayat is also planning to operate extra buses for Dashain. “Our entire fleet has not been put into service. If there is demand, more buses will be brought out,” said a Makalu official.

Bus tickets to western Nepal are easier to obtain compared to eastern Nepal. Transport companies said there were adequate buses to handle the Dashain rush. Suman Lama, president of the Nepal Western Region Unified Transport Booking and Checking Management Committee, said that 30 percent of the seats to western Nepal were vacant. “More than 180-200 buses ply the routes to western Nepal,” he added.

According to the Mid-Western Transport Entrepreneurs Association, most of the bookings are for Oct. 13-15. “We operate on the Kohalpur and Surkhet routes. We have increased our daily services to 11 from four in response to demand,” said Tara Bahadur K.C., an official of the association.

The National Federation of Nepal Transport Entrepreneurs has planned to add 1,500 buses this year considering the demand for tickets. The extra services will operate from Ghatasthapana to Navami when the annual mass departure begins.

GOLD SHORTAGE LIKELY TO EASE AFTER TUESDAY’S AUCTION

7.Oct.2010

The bullion market that has been constrained by a supply shortage is
likely to get relief by Wednesday. Traders plan to buy 100 kg of gold and more than 500 kg of silver at Nepal Rastra Bank’s weekly auction on Tuesday.

As per the new provision, the central bank had started selling gold directly to traders from last week. However, only around 9 kg of gold were procured by the traders saying that the price set for selling gold at the auction was too high and that it would have a negative impact on the market.

Currently, the market is witnessing the trading of around 15 kg of gold per day, while the demand is above 30 kg fuelled by the Dashain festival beginning Friday. “We have told the traders to make reasonable bids on Tuesday so that we can buy the gold and release it in the market at reduced prices,” said Tej Ratna Shakya, president of the Nepal Gold and Silver Dealers Association. “With the procurement of 100 kg of gold, the price is expected to drop by Rs. 400 per 10 gm by Wednesday.”

On Monday, the yellow metal was traded at Rs. 32,021 per 10 gm and silver at Rs. 566 per 10 gm amid a crisis in the retail gold shops. Even though the weekly demand is more than double what is being planned for release by the central bank every week, the release of 100 kg of gold is expected to offer relief in the market.

Shakya said that they had urged the traders to bid in such a way that gold could be available in the market at reasonable prices. “We are also afraid because there might be traders wanting to spoil the market by bidding a higher amount, and that will eventually hurt the customers,” he added.

Last Tuesday, the central bank had set the minimum price of Rs. 3,111,189 per kg (Rs. 31,112 per 10 gm) for gold and Rs. 52,640 per kg (Rs. 526 per 10 gm) for silver for the auction. Gold traders had bid the maximum auction price of Rs. 3,180,000 per kg for gold and Rs. 56,590 per kg for silver.
Traders said that the gold sold by the central bank last week was of high quality, but the price was too high to buy, sell and earn a profit in the market.

Following complaints from traders about the mode of payment at the auction, the central bank has revised the payment system. The new provision allows traders to deposit 10 percent of the offered amount at the NRB Banking Office Thapathali or at any branch of Machhapuchchhre Bank at Baluwatar, Lazimpat, New Road and Putali Sadak.

Traders said that the revised provision of the payment system and extended duration up to 24 hours to collect the gold after the auction was good. Earlier, the traders had to deposit the entire amount and the money could be deposited at only two branches.

“Traders from out of town and those unable to make the 10 percent deposit at the designated branches can also take part in the auction by submitting an auction form and a bank guarantee of Rs. 100,000,” said a high level NRB official. “Traders accepting the maximum price set from the auction have to collect the gold from NRB within 24 hours by paying the rest of the money.”

HOW NRB MUFFED IT UP

7.Oct.2010

The Nepal Rastra Bank (NRB) error in the statistics of the highest foreign exchange earner in trekking agencies in Nepal in 2009-10 has dislodged the chances of a genuine institution from getting the award conferred by the tourism ministry. The Ministry of Tourism and Civil Aviation (MoTCA) conferred the ‘Highest foreign exchange earner’ award on Himalaya Expedition Inc., (Pvt) Ltd, in the World Tourism Day (Sept. 27) function held at Nepal Tourism Board. In fact, it is Thamserku Trekking Pvt. Ltd that was the highest foreign exchange earner in 2009-10.

The awarded Himalaya Expedition’s earnings last year stood at US$ 822,025, while the earning of Thamserku Trekking was US$ 1.89 million, according to the amended NRB foreign exchange statistics. However, the MoTCA said that the error occurred due to incorrect statistics sent by the NRB. The NRB corrected the statistical error on Sept. 2. “We distributed the award on the basis of the central bank’s foreign exchange statistics report,” said Laxman Prasad Bhattarai, spokesman at MoTCA.

The amended NRB statistics say that Thamserku Trekking is the highest foreign exchange earner followed by Himalaya Expedition and Explore Himalaya Travel & Adventure. The Trekking Agencies’ Association of Nepal (TAAN) has sent a letter to MoTCA on Monday, drawing its attention to the error by government authorities. TAAN has also requested Tourism Minister Sharat Singh Bhandari to organize another special programme to honor Thamserku Trekking.

Rajendra Bajgai, general-secretary of TAAN, said that such irresponsibility on the part of the concerned government authorities has created an environment of distrust among the agencies. “The decision should be corrected and the concerned authorities should apologize for their mistake,” he said.
The MoTCA awards the best hotel, trekking and travel agency every year on World Tourism Day for their best performance in foreign currency earnings.

The MoTCA has also forwarded a warning letter to NRB not to repeat its mistake. Bhattaraisaid that they received the letter forwarded by TAAN on the issue on Monday. “We will discuss the issue with the minister and secretary,” he said.

NEPAL STOCK EXCHANGE INDEX HEADED SOUTH

21.Sep.2010

The downslide in the stock market that started two years ago, shows no sign of stopping. The Nepal Stock Exchange (NEPSE) index plunged to a four-year low on Monday at 401.74 points. The
capital market had recorded 402.11 points on Nov. 1, 2006 when the market was still ascending.

The market started plunging after the Maoist-led government increased the capital gains tax in the stock market two years ago while bringing the budget. The market started to deteriorate after a
reported comment by then finance minister Baburam Bhattarai that the stock market was a ‘casino’.

Now, with the parliament failing to elect even a new Prime Minister the freefall in the capital market is incessant. Amid declining trend in the stock market, banks and financial institutions are also tightening lending for investment in the secondary market and the interest rate on such lending has also grown.

“Now, there investors are not getting enough returns from investment in stocks,” said Birendra Raj Kharel, chief of Pragyan Securities. “That’s why they are reluctant to invest and are instead lining up to sell their shares. This has resulted in continuous decline.”

Over the last two years, supply of shares also significantly increased and this also contributed to decline in the stock market. The issuance of rights, bonuses and new initial public offerings (IPOs) increased the flow of shares significantly over the period.

Stock analyst Jagadish Agrawal terms the situation of the last two years as the reverse of what appeared during 2006-2008 when the market was ascending. Investors staged an agitation last year after seeing the hopeless situation of the market. They demanded flexibility scope of loans against the share collateral. Even after their demands were fulfilled, the downslide in the market didn’t stop.

During the fiscal year 2006-07, the secondary market had ascended by 295.79 points to 539.66 points, the highest surge in the last four years. “It was the result of hope and confidence on the part of investors following the signing of the peace accord,” said Agrawal.

The fiscal year 2007-08 also witnessed a significant rise in the secondary market. The market which began at 696.58 points in July 17 2007 climbed by 266.78 points to 963.36 points on July 15, 2008.

With that bullish trend continuing, the NEPSE index touched the highest ever – 1175.38 points – on Aug. 31, 2008. Following the formation of that Maoist-led government that was perceived as non-cooperative towards the stock market, the index started to slide. Then, the market came down to 749.10 points on July 15, 2009, losing 233.02 points over the fiscal year 2008-09. The market plunged by 258.14 points to 477.73 points the last fiscal year at the end of the year.

GUV URGES BANKS TO CUT HIDDEN CHARGES

21.Sep.2010

Commerz and Trust Bank formally started banking transactions on Monday following its inauguration by Prime Minister Madhav Kumar Nepal. It is the country’s 29th commercial bank.

Speaking at the opening ceremony, Prime Minister Madhav Kumar Nepal asked the new bank to focus on lending to productive sectors instead of consumption-related products.

Calling attention to complaints that banks don’t make small investments, he said that they should be aware that the banking sector cannot be sustainable without raising the living standard of the poor. Prime Minister Nepal also slammed the ongoing political wrangling saying that it was hitting the country’s economy hard.

Nepal Rastra Bank governor Yubaraj Khatiwada stressed the need to reduce the hidden charges borrowers are burdened with. He also emphasized that the spread rate (the difference between the interest rates on loans and deposits) should be kept as low as possible, and that it would show the real strength of the bank.

CEO of Commerz and Trust Anal Bhattarai expressed the bank’s commitment to go to the rural sector to help the poor. The bank has said that it would lend to road, education and development projects with public-private partnership and that it was also committed to corporate governance.

Commerz and Trust Bank is the second bank to be inaugurated by the prime minister within a week. It presently has a paid-up capital of Rs 1.4 billion which will be increased to the required Rs. 2 billion by raising additional capital from the public.

BUDGET CRUNCH HAS HEALTH, FOREIGN MINISTRIES OVER A BARREL

21.Sep.2010

The delay in bringing a full budget has started affecting development activities and even government offices are facing budget crunch for essential purchases.

Health Ministry is facing a budget crunch to purchase essential drugs. Ministry officials said it was difficult to purchase drugs worth Rs 640 million as the ministry lacks enough budget under this head.

The advance budget has allowed the ministries to spend just 33 percent of the amount spent last fiscal year under particular heads. It has the capacity to spend just around Rs 38 million as the Ministry of Finance (MoF) had allocated Rs 1.15 billion for the purchase of medicines last fiscal year.

The health ministry asked the MoF to provide more budget, but a senior MoF official said they asked the Health Ministry to manage fund from its own resources that have remained in other heads.
Now the Health Ministry is in no mood to purchase the medicines immediately despite having placed orders for the same. “We cannot purchase medicines unless the finance ministry provides us budget,” said Dr. Mingmer Gyelzen Sherpa, Director Logistic Management Division, under the Health Ministry.
Of the total allocated budget of Rs 1.15 billion last year to purchase medicines, the ministry had purchased medicine equivalent to Rs 40 million at the central level. “We sent rest of the budget to districts, as per the policy of bidding centrally and purchasing locally set by the ministry,” said Dr. Sherpa.

It has been a tradition since the last three years that the budget presentation has either been delayed or its endorsement has been held up. Due to delay in budget endorsement, the government hospitals had struggled to purchase even oxygen bottles last year. A similar situation has now arisen. Ministry officials said they were failing get any new health progrmame approved.

In the absence of adequate budget, the foreign ministry failed to open the letter of credit (LC) for the purchase of machine readable passports (MRP). The foreign ministry asked MoF for the budget and the also asked the Nepal Rastra Bank (NRB) to open LC even without full deposit of money on the part of the foreign ministry. After a long row over the MRP deal, the responsibility of printing the passports was given to the French company, OberthurTechnologies.

Already the lack of a budget has started showing negative symptoms. Economic activities are slowing down and revenue collection has come down significantly.

Development projects have already been affected as project officials are undecided whether to call tender for ongoing projects because the same projects may not get priority in the full budget. They are also facing difficulty calling tender for small projects because a single project cannot be given to different contractors. Meanwhile, the political parties are at variance over whether the incumbent government should be allowed to present the full budget.

Both UCPN (Maoist) and Nepali Congress are against the idea of allowing the incumbent government to present budget. They arguethat it is only a caretaker one. The Maoists have blocked even the finance bill aimed at increasing customs duty on gold, silver and betel nut whose huge import had affected the economy seriously last year.

Amid uncertainty over budget presentation, President Dr. Ram Baran Yadav has started consultations with political leaders, economists and government officials about the country’s economic situation and delay in the budget presentation. The president’s press advisor Rajendra Dahal said the president was concerned over the downward spiralling trend of the economy.

PADDY YIELD TO GO DOWN

21.Sep.2010

Despite abundant rains in the “country in average” during the latter months of the monsoon this year, the officials forecast that the rice production is likely to plunge. They say it is because the rainfall was either very irregular or untimely for paddy plantation” especially in the major pocket districts in eastern Tarai such as Siraha, Mahottari, Sunsari, Sarlahi and Dhanusha.

Hari Dahal, spokesperson for the Ministry of Agriculture and Cooperatives (MoAC), said the Tarai districts that contribute around 70 percent of the total paddy production “lacked adequate rains” during the plantation time.

Rice was planted in around 93 percent of the total arable land by August-end last year, while it was around 91 percent this year. Siraha, Mahottari, Sunsari, Sarlahi and Dhanusha-identified as major rice producing districts-saw plantation in around 85 percent, which was higher last year.

“Though the late monsoon rains in the end of July and August help increase the production to some extent, the overall paddy production is likely to drop this year,” said Dahal.

Paddy production in 2009-2010 was around 11 percent less than the previous year that recorded production at 4.52 million tonnes. In 2009-10, the country’s overall paddy production was 4.02 million tonnes.

Meanwhile, the overall grain production including crops namely rice, wheat, maize, buckwheat and
barley saw decrease at 4.33 million tonnes in the fiscal year 2009-10 compared to the previous year.
The Ministry of Agriculture and Cooperatives (MoAC) reported that the 2009-10 winter crop production increased by 16 percent in comparison to last year.

Mani Ratna Shakya, chief of Meteorological Forecasting Division (MFD), said this year’s monsoon was delayed by a week and the rainfall was scanty across the country in June and July.

The eastern region saw rainfall below normal during June and mid-July while it was 120 percent by the end of July and August. “Unlike earlier, the western region saw rainfall more than normal during this monsoon,” he said. The four-month-long-long is expected to end
this week.

JV PACT FOR VACCINE PLANT

20.Sep.2010

Project to cost Rs 250 million; plant to be located in Kavre.
Him Electronics and Hester Biosciences of India have entered into a joint venture agreement to set up a plant to manufacture animal vaccines in Nepal, the first of its kind in the country. Him Electronics and Hester Biosciences signed the accord on Sunday in Kathmandu.

Hester Biosciences has a 65 percent stake in the proposed company-Hester Bioscience Nepal-with the rest being held by Him Electronics. The total cost of the project is Rs. 250 million.

Hester Bioscience Nepal will manufacture a range of poultry, sheep, cattle and swine vaccines for the Nepali and world markets at its factory to be set up at Panchkhal in Kavrepalanchok.

We have been aiming to enter this sector for a long time,” said Shekhar Golchha, managing director of Him Electronics. “Our dream has materialised with the tie-up with Hester.”

Hester Biosciences is the second largest player in the poultry vaccines market in India with a market share of around 35 percent. The joint project with Him Electronics is its first venture outside India.
So far, Hester Biosciences has been manufacturing only poultry vaccines with an annual production capacity of 4.8 billion doses. It has 11 types of live and 28 types of inactivated poultry vaccines.
Rajiv Gandhi, chief executive officer of Hester Biosciences, said that they were looking at joint ventures in emerging markets to expand their product portfolio. “The whole thing materialised within two months,” added Gandhi.

Ahmedabad-based Hester Biosciences has been manufacturing poultry vaccines since 1997. Listed on the Bombay Stock Exchange, it has an annual turnover of Rs. 600 million.

The Him Electronics-Hester Biosciences joint venture is expected to start production by 2012 and will give employment to 200 Nepalis. “We’ll produce 2.5 billion doses of animal vaccines from the Nepal plant,” said Gandhi. “We are expecting to manufacture 15-20 vaccines here in Nepal.”

Hester Bioscience Nepal, according to its promoters, will have an annual turnover of between Rs. 500 million to Rs. 700 million.

FOCUS ON CONSUMER SATISFACTION

20.Sep.2010

The first international conference on quality in Nepal kick off on Saturday at Kathmandu University, Dhulikhel, Kavre. The conference has been organised to promote modern thought, contemporary models, innovative applications, experience and practices related to quality and excellence.

The three day conference organised by Network for Quality, Productivity and Competitiveness Nepal (NQPCN)-a core council member of the Asia Pacific Quality Organization (APQO) was inaugurated by Finance Minister Surendra Pandey amid a special gathering of experts on quality from the world over.

Minister Pandey said that the demand for the quality has been inceasing among consumers commensurate to the increase in their income, literacy, consciousness and competition among producers especially in the education, health, cosmetics and media sectors.

The conference with the theme “Creating Value Through Quality”, is being attended by over 200 participants from various countries and fields for sharing and learning ideas on quality. They are discussing quality issues in fields of health, education, business, production, service, management, development and governance, among others.

In the programme, Dr. James Harrington, CEO of the Harrington Institute, USA, shared his expertise on “Five Pillars of Organisational Excellance-process, project, change, knowledge and resource management for excellance in perfomance. Four leading experts-Dr. Charles Aubrey, chairman, Asia Pacific Quality Organisation, Prof, Greory Watson, president, International Academy of Quality, Dr. M. Gatchalian, Fellow of American Society for Quality including Dr. Harrington are the keynote speakers in the three-day conference.

“The conference will help create quality as a global discipline of individuals, communities, businesses and all service sectors to serve the people, nation and the world,” said Bishnu Das Dangol, president of the NQPCN.

Representing the Nepali private sector in the conference, Kush Kumanr Joshi, president of the Nepali Chambers of Commerce and Industry (FNCCI) said that quality was an important element for the sustainability of business and customer satisfaction. He underscored the need for utilisng the principles of Quality in Mangement to offer consumers quality products at competitive prices. On the occasion, Joshi informed that FNCCI would start two additional awards on quality-FNCCI People Excellence Award and FNCCI Service Award.

The FNCCI PE Award will be given to organisations that have excelled in developing employees in business success and the FNCCI SE award to organisations that have developed outstanding management capabilities to drive and sustain customer service excellence.

WINNERS PREEN AT DUE HONOUR

20.Sep.2010

6th crity annual awards
The most creative advertisements and their makers were honoured in the 6th Crity Awards held on Saturday night at Soaltee Crowne Plaza. A total of 35 agencies vied for 22 award categories, with five nominations each.

Of the total participants, V-Chitra grabbed the limelight by scooping up five awards -best lyricist, best jingle composer, best TVC editor, best commercial campaign and best creative agency-with its Wai Wai -Gyan Udaya campaign. The agency was nominated in seven categories.

Ad Avenues and Welcome Advertising made a tie for second position, winning three awards each. Ad Avenues clinched awards the best TVC script writer, best TVC cameraperson for its advertisement of Nepal Telecom and best TVC director for Nepal Samachar Patra’s Na Madhesi, Na Himali advertisement. Welcome Advertising, on the other hand, bagged the best art director (print) award for R.K Jewelers’ advertisement and best sound recordist and most popular advertising for Jagadamba Steel’s Nepali Man Manma advertisement. Welcome Advertising bagged the award for most popular advertisement agency by clocking 1458 votes from the general viewers.

Echo Advertising Agency won two awards-the best TVC and best social ad.
Outreach Nepal, Sanjivani Media Services, Mice Ad Nepal, Max L’agence, Ad Point Nepal, Applied Value and Media Hub bagged one award each. Raj Bhai Suwal from Prisma Advertising Agency won the award for the best print photographer.

The award for the best creative youth, a new category added this year, went to Rishikesh Dhakal and Suraj Giri. The ceremony also felicitated the winners of the best Daura Suruwal competition. While Kedar Sharma, Suman Raj Subedi, Birendra Hamal and Prabin Adhikari walked away with the prizes for best Daura Suruwal category, G.P Timilsina clinched the prize for the most unique Daura Suruwal.
Speaking on the occasion, Nirmal Raj Poudel, president of the Advertising Association of Nepal (AAN), said that the association has been able to manage the Nepali advertisement sector to some extent through the annual awards ceremony. He added that the sector has provided employment to thousands of people and is still in search of creative manpower.

Winners
Best Copywriter (Print) Outreach Nepal
Best Print Photographer Raj Bhai Suwal (Prisma Advertising)
Best Art Director Sujan Chaudhary (Welcome Advertising & Marketing)
Best Jingle Composer Mohit Munal (V-Chitra)
Best Lyricist Araj Keshav (V-Chitra)
Best Sound Recordist Birendra Shakya (Welcome Advertising & Marketing)
Best Radio Spot Sanjivani Media Services
Best TVC Script Writer Abhaya Pandey (Ad Avenues Nepal)
Best Social Ad Echo Advertising Agency
Best Event Manager Mice Ad Nepal
Best Bill Board Max L’agence
Best TVC Cameraperson Bidur Pandey (Ad Avenues Nepal)
Best TVC Script Writer Abhaya Pandey (Ad Avenues Nepal)
Best TVC Editor Harshwardhan Shahani (V-Chitra)
Best TVC Director Abhaya Pandey (Ad Avenues Nepal)
Best Radio Jingle Ad Point Nepal
Best Print Advertising Applied Value
Best Animated TVC (Kiran Bhakta Joshi) Media Hub
Best TVC Echo Advertising Agency
Most Popular TVC Welcome Advertising & Marketing
Best Commercial Campaign V-Chitra
Best Creative Agency V-Chitra
Best Creative Youth Rishikesh Dhakal and Suraj Giri

NRB TO EASE GOLD CRISIS

20.Sep.2010

The Nepal Rastra Bank (NRB) has come up with a solution to address the acute shortage of yellow metal and curb black marketing of the yellow metal in domestic market. Now, NRB itself will sell 100 kg of gold and 1,000 kg of silver as demanded by the local market to ease the supply crisis.

According to an NRB notice issued on Friday, the central bank will sell 100 kg of gold and 1,000 kg of silver every week by the auction between gold traders. Only the traders with PAN registration will be able to buy gold and they will have to provide details of their sales to the central bank, if asked. The minimum price in local market will be set by adding Rs. 1,000 to the international gold price per ten gram based on the rate of 12:15 pm every Tuesday. Similarly, the silver price will be fixed adding Rs. 2,400 to per kg of the price in the international market.

“The auction process will start at 2 pm and end at 3 pm every Tuesday,” states the notice issued by the central bank. “The sales will start by 3 pm the same day at the central office of the NRB, Baluwatar.”
Traders accepting the price set for gold from the auction will need to deposit money in Account no. 10 of NRB banking office, Thapathali, or in the Gold and Silver Account at the Baluwatar Branch of the Machhapuchhare Bank along with auction papers. Each time, a trader can buy gold minimum 1 kg and silver 30 kg.

The central bank has also made a provision for those traders who do not intend to buy gold through the bidding process. According to the NRB, such traders can buy 25 kg of gold every week paying the highest price set in the auction. At a time when gold traders are demanding at least 140 kg of gold every week targeting the festive season, the new provision brought forward by the central bank to sell at least 100 kg of gold every week is expected to discourage the illegal import and provide some price relief to the consumers.

PHONE TARIFFS DOWN

20.Sep.2010

While charges for making international long distance calls continue to drop, the number of call destination countries is also increasing, thanks to the increased business networking by telecom operators and competition among them.

State-owned Nepal Telecom has introduced a cheap call offer through the SIP account system (a prepaid calling card system based on IT) for making international long distance (ILD) calls at Rs 3 per call to seven countries (Canada, China, Hong Kong, India, Singapore, Thailand and the US), at Rs 5 to three countries (Malaysia, South Korea and Macau), at Rs 6 to four countries (Israel, Taiwan, Bangladesh and Pakistan), at Rs 8 to two countries (Japan and Russia) and at Rs 10 to two countries (the UK and Australia).

“Our recent board meeting has approved the SIP call tariff for international calls proposed by Nepal Telecom,” said Kailash Prasad Neupane, spokesperson of the Nepal Telecommunications Authority. He added that ILD prices were being slashed as a result of competition among telecom service provideRs
The price war was set off by United Telecom when it began offering calls to India at Rs 3 per call. Ncell had also introduced a cheaper ILD call rate to its pre-paid, post-paid and corporate subscribeRs Subsequently, Nepal Telecom also introduced cheap calls in June allowing its subscribers to make international calls at Rs 4 to seven countries and at Rs 6 to three countries by dialling the access code 1424.

With the view of offering quality service at lower prices without customers needing to dial an access code, Ncell has also slashed ILD call rates and added new countries. Ncell has proposed to the NTA to approve its tariff of Rs 6 per call to Singapore and Bangladesh-the two countries added recently to its ILD call facility list. Earlier, the company was offering ILD facility to its prepaid and post-paid users to 10 countries. Now it is has added 12 countries to its ILD call country list-Singapore, Bangladesh, Qatar, Kuwait, Lebanon, the UK, the UAE, Australia, Japan, Pakistan, Bhutan and Sri Lanka.

According to the Nepal Telecommunications Authority, Ncell has applied for approval of its tariff of Rs 15 per call to eight countries-Kuwait, Qatar, the UAE, Bangladesh, Saudi Arabia, the UK, Australia and Lebanon-on the occasion of the festive season too. Call charges will remain the same for peak and off-peak hours for these countries, and the pulse for these calls will be 60 seconds.

“Offering calls at lower prices is also a corporate social responsibility,” said a high-level official at United Telecom. “Since there are many Nepali workers in Dubai and Qatar, we are also mulling reducing the call rate to these countries.”

Currently, United Telecom offers ILD calls at the rate of Rs 4 per call to 10 countries-South Korea, Malaysia, Hong Kong, Bangladesh, Singapore, Thailand, China, Macau, Canada and the US-for which its subscribers have to dial the access code 1220. It has been providing call service at Rs 3 to India.

ADB PRESIDENT ARRIVING TOMORROW

25.Jul.2010

Asian Development Bank (ADB) President Haruhiko Kuroda is visiting Nepal from July 26-29, according to the bank. The trip coincides with the 20th anniversary of the establishment of ADB’s resident mission in Nepal.

In his first visit to Nepal as the ADB president, Kuroda is scheduled to meet with senior government officials to discuss ADB’s ongoing assistance, and to reaffirm continued support for the country’s development objectives, according to a press release issued by the bank headquartered in manila, Philippines.

The release said Kuroda will also make field trips to ADB-assisted projects and meet with the projects’ beneficiaries.

Following the establishment of the Nepal Resident Mission, ADB has significantly increased its assistance to Nepal, with the amount set to double in 2009-2010 to $559 million, from $258 million in 2007-2008, the release added.

Since ADB first began extending assistance to Nepal in 1969 it has provided nearly $3 billion in concessional loans and grants for investment projects, and about $138 million in technical assistance grants.

The major sectors that receive support include agriculture and natural resources, education, finance, governance, water supply, sanitation and urban development, transport and communications, the bank said.

Kuroda’s visit will be the first highest-level visit by Nepal’s biggest donor agency in the last 12 years.

INTERNAL LOANS ‘UPPED’ LAST FY

5.Jul.2010

The government managed to raise almost all internal loans targeted for the last fiscal year 2009-10 although it had collected less than the targeted figures the previous year. Internal loan is one of the main sources of funds for the government in addition to revenue and external aid.

Amid complaints about the slow development expenditure, the government collected Rs. 29.91 billion in internal loans against the target of Rs. 30 billion last year. The government had collected Rs. 18.41 billion against the target of Rs. 25 billion the previous year-2008-09.

As long as the government has enough resources, it does not raise internal debt because it has to pay an interest for it. Bodh Raj Niraula, joint secretary at the Ministry of Finance, said the government had to raise the entire domestic debt as the relatively better expenditure last year demanded the additional resources. The government estimated to spend more than Rs. 85 billion in capital expenditure against the budget allocation of Rs. 106 billion last fiscal year.

This shows a huge gap in development expenditure against the budget allocation. However, Niraula said the government had to take all internal loans as the development budget allocated from foreign aid could not be spent. Nepal Rastra Bank (NRB) uses four types of instruments on behalf of the government to raise domestic debt- namely treasury bills, citizens saving bonds, development bonds and Special Saving Certificate.

The central bank raised Rs. 19.92 billion from treasury bills, Rs. 939.25 million from citizen saving bonds, Rs. 9.04 billion from development bonds and Rs. 4 million from foreign employment bonds last fiscal year, according to NRB.

The government generally raises debt in the last months of the fiscal year. Government securities worth Rs. 17.24 billion were issued during the last month of the last fiscal out of the total of 29.91 billion raised over the year. Government securities worth Rs. 12.66 billion had been issued in the first 11 months of the last fiscal. Similar was the case in the previous fiscal too. Securities worth Rs. 9.71 billion had been issued in the final month of the previous year against Rs. 18.41 billion total loans taken that year. “It is natural to see domestic loans raised in the latter months as they are taken on the basis of calculating the situation of the government’s treasury,” said Niraula.

NRB spokesperson Gopal Kafle said the central bank has to issue projected securities; until the government asks the NRB to halt the process. “The government also issues the bonds to check inflation, besides raising funds for development projects,” he added.

Among the government’s debt instruments, the citizens saving bonds are issued to mop up excess liquidity at the hands of the general public to bring down inflation.

The Treasury bills are also used for liquidity management in the banking system. The development bonds are instruments designed to assist the government’s need for development financing.
Special bonds are issued to address special objectives of the government, while foreign employment bonds aim to curb remittance generated for the investment in the productive sector.

Types of government securities
Fy 2008/09 FY 2009/10
Treasury Bills Rs. 9.00b Rs.19.92b
Citizens’ Saving Bond Rs. 1.66b Rs.939.25m
Development Bond Rs. 7.75b Rs. 9.04b
Foreign Employment Bond Nil Rs. 4m
Grand Total Rs. 18.41b Rs. 29.91b

NEPSE’S SLENDER GAIN

25.Jul.2010

Nepal Stock Exchange (NEPSE) finally witnessed a meager gain of 0.81 points as the market saw ups and downs over the week. The benchmark index of the stock market settled at 469.34 points on Thursday, the last trading day of the week from 668.53 points on Sunday. Stock specialists attributed the mismatch between demand and supply of shares and the ongoing political uncertainty to the NEPSE struggling to show a rosy trend.

Despite a surge in the number of companies and transactions held on the trading floor last week, the stock market witnessed a decline in turnover and the number of shares traded.

Last week, the capital market registered 3,805 transactions of 101 companies on the trading floor against the 3,137 transactions of 96 companies in the previous week.

On the other hand, 280,274 shares worth Rs. 129.47 million were traded last week in comparison to 395,820 shares worth Rs. 135.69 million in the previous week. The rise in the sub-indices of six sectors listed in NEPSE pushed up the benchmark index to a small gain. The winners’ list in the stock market was led by the others’ sector, posting a gain of 11.75 points.

The sub-indices of groups including insurance companies, finance companies, commercial banks, development banks and hotels followed the others’ group with gains of 4.90 points, 1.55 points, 1.36 points, 1.22 points and 0.38 points respectively.

Likewise, groups consisting of hydropower companies and trading companies shed a whopping 76.13 points and 5.14 points respectively. However, the group of manufacturing and processing companies did not see a change in it’s index.

Last week, Standard Chartered Bank accumulated Rs. 30.05 million to top the list in terms of turnover. Similarly, KIST Bank was in the pole position in terms of highest number of shares traded with 31,600. Asian Life Insurance Company saw 505 transactions, the highest.

The stock market further witnessed the listing of 200,000 ordinary shares of Nerude Micro-finance Bank.
weekly review
Top Five in turnover
Company Turnover (in Rs. million)
Standard Chartered Bank 30.59
Nabil Bank 11.72
Bank of Kathmandu 11.47
Everest Bank 6.99
KIST Bank 6.30
Sectors that went up (in points)
Others 11.75
Insurance Companies 4.90
Finance Companies 1.55
Commercial Banks 1.36
Development Banks 1.22
Hotels 0.38
Sectors that went down (in points)
Hydropower Companies 76.13
Trading Companies 5.14

GOLD UP, SILVER STAYS SAME

25.Jul.2010

The price of gold in the local market increased by Rs 70 per 10 grams last week. The price, which was at Rs 30,090 per 10 grams on Sunday, declined by Rs 90 on Tuesday and settled at Rs 30,160 on Friday.
The fluctuation of the US dollar in the international market has resulted in the price of gold being affected. The price of the yellow metal closed at US $1,195 on Friday from the opening price of US $ 1,184 per 10 grams on Sunday.

The price of silver remained the same as that of Sunday. Though the price of silver went down to Rs 476 per 10 grams for three days from Tuesday to Thursday, it finally settled at Rs. 480 per 10 grams on Friday.

NEPAL EXPORTS SEE STEEP DROP

25.Jul.2010

Nepal’s exports to both India and third countries through the Birgunj Customs Office witnessed a downfall last fiscal year 2009-10.

Harihar Paudel, information officer at the customs office, said the export of 10 different goods including fruit juice and jam, woolen carpets, G.I steel pipes, synthetic yarns, toothpaste, plastic sheets, foils, granule and plates, aluminum profiles, readymade garments and plant products decreased last fiscal year.

Juice is one of the leading goods to be exported, but its export nosedived by half. The export of Dabur Nepal produced juices declined to worth Rs. 1.3 billion during the last fiscal from Rs. 1.8 billion in the previous fiscal. The juice is exported mainly to India.

The export of woolen carpets decreased from Rs. 1.6 billion to Rs. 1.3 billion. It is the second largest good exported through the customs point. Fiber-based clothes that are the third largest export items, also saw a fall from Rs. 1.6 billion in the previous year to Rs. 1.2 billion last year.

The export of G.I steel pipes went down from Rs. 1.3 billion to Rs. 1.1 billion, synthetic yarn from Rs. 1.13 billion to Rs. 1.12 billion and toothpaste from Rs. 847.5 million to Rs. 668.9 million, according to the customs office. Likewise, the export of plastic sheets and readymade garment export also decreased.

SUPPLY HIT, VEG PRICES SOAR

23.Jul.2010

The price of vegetables in the Kathmandu Valley has skyrocketed following continuous torrential rains that have disrupted supply. Two weeks ago, 600 to 700 tons of vegetables used to enter the Kalimati market daily, now the inflow has come down to less than 400 tons.

Prices of major vegetable items such as tomato, eggplant, cow pea, French bean and chayote has increased drastically in the past couple of weeks. Similarly, green vegetables such as broad leaf mustard, spinach and cress have also witnessed a price hike. Binay Shrestha, senior planning officer of the Kalimati Fruits and Vegetables Market Development Board (KFVMDB), said that vegetable prices had increased following short supplies caused by the monsoon. “The valley consumes 1,000 tons of vegetables daily, but the supply has gone down to less than 400 tons in recent days,” he added.
The price of big tomatoes on Thursday was recorded at Rs. 47 per kg, up from Rs. 26 two weeks ago. Tomatoes were going for Rs. 60 per kg retail. The price of cow peas has swelled to Rs. 53 from Rs. 36, while the retail price has touched Rs. 80 per kg.

French beans and chayote are being sold for Rs. 49 and Rs. 34, up from Rs. 34 and Rs. 29 respectively. Likewise, smooth gourd was selling for Rs. 50 per kg, up from Rs. 28.

Although the wholesale price of vegetables like cabbage and cauliflower has dropped from Rs. 18 and Rs. 36 to Rs. 16 and Rs. 26 respectively, retailers are selling cabbages for Rs. 30 per kg and cauliflower. for Rs. 45 per kg. Retailers have increased the prices of daily goods arbitrarily due to the absence of effective market monitoring. Tulsi Gautam, executive director of the KFVMDB, said that the price of vegetables would decrease slightly by the end of August.

Vegetable Item Price on July 8 Price on July 22
Tomato Big Rs 26 per kg Rs 47 per kg
Tomato Small Rs 27 per kg Rs 45 per kg
Cow pea Rs 36 per kg Rs 53 per kg
French Bean Rs 34 per kg Rs 49 per kg
Chayote Rs 29 per kg Rs 34 per kg
Broad Leaf Mustard Rs 24 per kg Rs 28 per kg
Asparagus Rs 93 per kg Rs 105 per kg
Source: Kalimati Fruits and Vegetables Market Development Board

MOTORBIKE SALES ZOOM 42 PERCENT

23.Jul.2010

Sales of two-wheelers in the Kathmandu Valley increased by a whopping 42 percent during the last fiscal year compared to the previous fiscal. The surge has been attributed to aggressive promotional schemes launched by distributors to reverse slumping sales caused by a liquidity crisis in the banking system.

A total of 69,359 units of various types of motorbikes were registered at the Bagmati Zone Transport Office in fiscal 2009/10 against 48,811 units in the previous FY. “Sales of bikes have gone up significantly in the capital as it is easy and affordable compared to four-wheelers,” said Madan Singh Mahat, office in-charge and under secretary of the Motorcycle Unit. “Moreover, the various promotional schemes launched on different occasions also supported the growth.”

Bagmati Zone, encompassing Kathmandu, Bhaktapur, Lalitpur, Dhading, Kavrepalanchok, Sindhupalchok, Nuwakot and Rasuwa districts, accounts for 50-70 percent of all the bikes and four-wheelers sold in the country. During fiscal 2008/09, a total of 83,334 bikes were registered across the country with 48,811 being registered in Bagmati Zone.

In a month-wise analysis, the fifth month of the fiscal year (mid-Nov. to mid-Dec.) witnessed the highest sales during which a total of 7,410 units were registered in Bagmati Zone. The eighth month (mid-Feb. to mid-March) saw the lowest sales with 3,999 units. Mahat said that they had expected to register around 7,000 bikes in the final month of the fiscal year. However, it did not happen as the import duty was not revised as had been expected. “Comparatively, the registration of Bajaj bikes has gone up this year,” he added.

Hansraj Hulaschand, a subsidiary of the Golchha Organization, is the sole authorised distributor of Bajaj two-wheelers for Nepal. It had offered a 21-inch television free on the purchase of a Bajaj bike to clear its stock that had accumulated as a result of tighter credit. “This year, our sales have increased by 45-60 percent compared to last year,” said Shekhar Golchha, director of the Golchha Organization.

NEPSE BACK IN RED

23.Jul.2010

The Nepal Stock Exchange (NEPSE) went into seesaw mode shedding 2.95 points on Thursday after gaining on the previous two days.

The benchmark index came down to 469.34 points when the market closed for the day.

Hydropower companies fell drastically on Thursday pulling down the NEPSE index. In contrast to the previous week’s upswing in this sub-index, the group parted with 69.98 points with losses in the share prices of all the listed companies.

Shares of Chilime Hydropower Company and Butwal Power Company went down by a whopping Rs. 110 per share and Rs. 81 per share respectively.

Following the hydropower companies, the sub-indices of groups including commercial banks, development banks and finance companies also slumped by 1.5 points, 0.74 point and 0.33 point respectively.

However, trading companies and insurance companies stayed out of the negative zone by posting marginal gains of 0.17 point and 0.54 point respectively.

Out of the 66 companies on the trading floor, shares of Citizens Bank International dipped heavily losing Rs. 191 per share while shares of the Bank of Kathmandu and Standard Chartered Bank gained Rs. 14 per share each. Thursday saw the price of shares of 22 companies go up and 32 companies decrease while 12 companies did not see any change in their share prices.

A total of 54,770 shares amounting to Rs. 27.68 million were traded through 1,032 transactions on the secondary market.

NTB FORMS TOURISM CRISIS CELL

22.Jul.2010

The Nepal Tourism Board (NTB), in coordination with the Himalayan Rescue Association (HRA), has constituted the Tourism Crisis Cell (TCC) to deal with untoward happenings and crisis management of tourists in the country.

Considering the occurrence of incidents like bandas and strikes and the safety and security of tourists during such unfortunate events, various travel and trade associations have decided to operate under a one-door policy and serve them through the TCC. The TCC will come into effect from Thursday.
The TCC has also unveiled hotline telephone and mobile numbers — 4442555 and 9751044088 — which visitors can call for assistance during times of crisis.

The TCC has urged both domestic and international visitors to dial these numbers if they are facing any type of political, social or environmental trouble. The HRA will play a leading role in the special crisis cell.

Organizing a press meet here on Wednesday, representatives from travel agencies, trekking agencies, tour operators and other travel and trade associations said that they would work together to reduce uncertainty, focusing attention on high-risk areas and proactively mitigating risks.

“With increasing crisis situations in the tourism sector, this proactive effort will be a milestone to cope with any kinds of crisis happening to visitors,” said Prachanda Man Shrestha, chief executive officer of the NTB. He added that all the travel and trade entrepreneurs joining hands with their expertise would play a decisive role in making the project a success.

The special cell will coordinate with embassies and diplomatic missions, local police and other security agencies for rescue purposes, Shrestha said.

Arjun Prasad Sharma, president of the Nepal Association of Tour and Travel Agents, said that they had decided to work through the one-door policy to expand coverage across the country. The NTB has so far been playing the role of crisis manager. It has been operating shuttle buses in Kathmandu, Pokhara and Lumbini for tourists during strikes, bandas and other disruptions.

GOVT WON’T LET CASH WASH NO MORE

22.Jul.2010

Nepal signed a memorandum of understanding (MoU) with Mongolia, Thailand and Malaysia on financial information exchange at the 13th annual general meeting of the Asia-Pacific Group on Money Laundering (APG) held in Singapore from July 12-16.

The move is aimed at preventing money laundering and terrorist financing. Nepal is a member of the APG.

Nepal has already signed such MoUs with Bangladesh and Sri Lanka. Officials said the country was close to signing a similar pact with India.

With the signing of the MoU, the two sides will have to provide each other financial information about persons suspected of having been involved in money laundering and terrorist financing.

Dharma Raj Sapkota, head of the Financial Information Unit at Nepal Rastra Bank (NRB), said that with the MoU, both sides would be required to exchange information on bank balance, investment in real estate, shares and other areas of those suspected of money laundering and terrorist financing.

“The countries signing the MoU can also freeze the assets of suspects at the request of anti-money laundering measures implementing agencies such as the Department of Revenue Investigation,” he said.
During the APG meeting, Nepal had also requested Hong Kong, China and Pakistan for a similar MoU.
Nepal has succeeded in averting possible global warning against it for failing to comply with anti-laundering measures, said Sapkota. “After the APG study on Nepal in September, it will decide whether Nepal should be included in the list of countries having global warning,” added Sapkota.
Such a warning will bring unnecessary hassles for Nepali travellers at airports and other places. Nepali banks may also be prevented from opening accounts in foreign countries, especially in the West.
The APG has decided to blacklist countries failing to comply with 10 anti-money laundering measures out of 16. Nepal is yet to endorse the UN anti-corruption convention which has now been tabled in parliament.

The Home Ministry is engaged in homework to endorse the convention on transnational organised crime. A proposal regarding endorsement of the UN convention on terrorist financing has remained idle in the cabinet.

Nepal is yet to formulate the Mutual Legal Assistance Act, and an amendment to the Anti-Money Laundering Act has also been gathering dust. Nepal needs to automate the FIU and DRI as a measure to strengthen the capacity of bodies overseeing money laundering issues.

In February, the Financial Action Task Force, an anti-money laundering body formed by the G20, had warned in March that Nepal was seriously deficient in curbing money laundering and terrorist financing.

NEPSE ON A DOWNWARD ROLL

27.Jun.2010

With the fall in the indices of most of the listed groups that saw trading, Nepal Stock Exchange (NEPSE) dipped for the second consecutive week by 11.54 points to settle at 463.45 points.

Last week, none of the sectors posted gain resulting in decline of the NEPSE index. The market suffered a loss of 5.99 points that week. Although the secondary market witnessed a decline in number of companies on the trading floor, the number of shares traded and market turnover went up by 38.42 percent and 12.93 percent, respectively. Last week, the market witnessed the presence of
just 90 companies in contrast to 103 companies the previous week.

The secondary market registered a turnover of Rs. 143.61 million against Rs. 127.17 million the previous week. Also, the stock market witnessed the trading of 428,700 shares through 5,158 transactions against 309,700 shares through 4581 transaction the previous week.

Last week, commercial banks lost 14.39 points, followed by insurance companies, others and hydropower companies with a fall of 10.86 points, 10.57 points and 8.35 points, respectively.
Sectors including development banks, finance companies and hotels shed 8.03 points, 5.26 points and 1.14 points, respectively. However, the manufacturing-processing and trading groups did not saw any change in their index.

Nepal Bangladesh Bank topped the stock market in terms of total turnover as well as number of shares traded with a turnover of Rs. 25.19 million through the trading of 104,000 shares. On the other hand, Asian Life Insurance Company saw the highest number of transactions, with 1249 in the kitty.

Weekly Review
Top Five in turnover
Company Turnover (in Rs. million)
Nepal Bangladesh Bank 25.19
Lumbini Bank 13.14
Asian Life Insurance Company 12.77
Bank of Kathmandu 9.33
Standard Chartered Bank 6.85
Date Nepse Index (in points)
20-06-2010 474.99
21-06-2010 468.61
22-06-2010 470.40
23-06-2010 467.60
24-06-2010 463.45
Sectors that went down (in points)
Commercial Banks 14.39
Insurance Companies 10.86
Others 10.57
Hydropower 8.35
Development Banks 8.03
Finance Companies 5.26
Hotels 1.14

REALTY SECTOR DOWN, REVENUE SHRINKS

27.Jun.2010

With real estate transactions nose-diving in Kathmandu Valley, land revenue collection has declined drastically. Though was a marginal increment between mid-May and mid-June in revenue collection, the overall collection of five major Land Revenue Offices (LROs) of Kathmandu valley declined by about 26 percent in the first 11 months of the current fiscal year.

Latest statistics of Department of Land Reform and Management (DoLRM) show the LROs have
been able to collect only Rs 2.79 billion against Rs 3.76 billion collected last year during the same period.
Tightening of loans by banks and financial institutions (BFIs), imposition of capital gain tax and provision of income source disclosure contributed to the decline in realty transactions.

“The reluctance on the part of BFIs to provide loans to the realty sector has affected the realty market,” said Gobinda Prasad Sapkota, director at DoLRM. “Central Bank’s directives to BFIs to reduce their loan exposure on real estate also hampered fund availability to the realty developers.”

One of the major LROs in the valley, Dillibazar LRO collected only Rs 881.36 million during the period against 1.36 billion last year. The other LROs too saw revenue collection shrinking during the period.
Transaction at Kalanki LRO declined by more than 22 percent. The office that collected Rs 560.89 million in the first 11 months of the previous fiscal year was able to collect only Rs 436.07 million this year. Chabahil LRO collected Rs 634.86 million during the period, a decline of 28 percent.
Bhaktapur and Lalitpur LROs both saw the same fate. The collection at Bhaktapur and Lalitpur LROs declined by 8 and 16 percent, respectively in the first 11 months of this fiscal year.
Between mid-May and mid-June, things improved. All five LROs’ revenue was higher than that in the earlier month (mid-April to mid-May).

Kathmandu LRO collected Rs 32.9 million from mid-May to mid-June while Chabahil LRO’s collection stood at Rs 30.6 million.

Meanwhile, realty developers say the market won’t revive before the new budget. They are hoping that the new budget addresses their major concerns, i.e. abolishment of income source disclosure and reduction in capital gain tax.

CIAA CANS BUDGETS FOR NEW PROJECTS

27.Jun.2010

– The Commission for Investigation of Abuse of Authority (CIAA) has halted the transfer of budget for new projects under three programmes after finding that these projects were created to serve the interest of ministers, lawmakers and politicians. The anti-graft body has halted new projects under National Planning Commission (NPC), Ministry of Local Development (MoLD) and Ministry of Physical Planning and Works (MoPPW).

A high level official at the Ministry of Finance (MoF) said due to the CIAA directive new allocations worth Rs 970 million for these new projects have been stopped. “The CIAA clearly told us not to make any allocation to these new projects and also warned that we may have to face action,” said the MoF official. The CIAA letter tells not to sanction budget for ‘petty’ projects.

Among the programmes under the CIAA scanner are MoLD’s programmes based on people’s participation. A total of Rs 410 million was about to be sanctioned but that was halted after the CIAA directive last week. Under the programme, the MoLD would fund 70 percent of the total cost of the projects identified by the locals who would have to contribute 30 percent on their part. However, the CIAA found that most of projects under this programme were not picked by the local people but by Constituent Assembly members and political leaders.

Another slab of Rs. 150 million under the Special Region Programme under the National Planning Commission (NPC) has also been blocked. The budget allocated under miscellaneous heads would have gone to these projects meant for remote areas, the Karnali region and disadvantaged communities. “We’ve directed not to release the budget for this programme as it appeared that the fund was being planned to be used for pet projects rather than for poverty alleviation,” said a CIAA source. Some lawmakers of the Karnali regions have protested the CIAA directive on these two programmes.
Dev Raj Joshi, CA member from Bajura district representing the Nepali Congress, said that the budget going through the CA members given the absence of any electoral agency at the local level was natural and blocking the fund for the projects in the remote districts was not right. “It is better to spend the development budget instead of reserving it for the government employees’ allowance,” he said. Another CA member Nawaraj Koirala from Kalikot representing the Nepal Workers’ and Peasant Party, supported the CIAA move saying that there was little that parliamentarians could do with the release of budget at the end of the fiscal year.

The MoLD had asked parliamentarians to submit the projects at the end of May without crossing the limit of Rs. 1.2 million for all projects and they submitted their preferred projects recently when the fiscal year is nearing an end.

The CIAA directive also blocked the sanctioning of Rs. 410 million under the Department of Roads saying that budget was being transferred to pet road projects of ministers and lawmakers deviating from other projects. State Minister for Physical Planning and Works, Sanjay Kumar Sah created 142 new projects in his electoral constituency in Dhanusha and sought the approval of the MoF for transfer of budget which the ministry rejected immediately, according to the MoF source.

Recently, the Public Accounts Committee of the parliament summoned Deputy Prime Minister and Minister for Physical Planning Works, Bijaya Kumar Gachchhadar about the rising transfer of budget from one head to another and directed him not to do so. Gachchhadar admitted that it is the tendency to allocate more budget in the constituencies of powerful leaders.

NTIS-2010 LISTS EXPORT SCOPE

27.Jun.2010

Products including large cardamom, lentils, instant noodles, iron and steel, tourism and labour services are the most potential exportable items of Nepal. These are among the 19 products with better export potential as identified by the government initiated study and have been included in the Nepal Trade Integration Strategy (NTIS)-2010.

However, ginger, honey, tea, medicinal herbs and essential oil, silver jewelry, wool products, information technology and business process outsourcing (BPO), engineering services and hydro-electricity have medium level export potential among these 19 products.

Handmade paper, health services and education services are sectors having the least potential of export among the 19 products.

The NTIS has also differentiated among the products in terms of socio-economic impact and 16 of the 19 products have high or medium socio-economic impact. This is not so in the case of instant noodles, health services and educational services.

It says that tea, medicinal herbs and essential oils, handmade paper, wool products, tourism and labour services have the highest socio-economic impact compared to other products.

Large cardamom, ginger, honey, lentils, silver jewelry, iron and steel products, pashmina products, IT and BPO services and hydro-electricity have medium level socio-economic impact.

Surya Silwal, Joint secretary at the Ministry of Commerce and Supplies, said the government would bring programmes in the coming budget to promote these products. “Our main challenge is to make people aware of the market demands and branding Nepali products in the international market for better export results,” he added.

DRI RAID ON GARMENT CO

25.Jun.2010

Business organisations, including two apex bodies of the Nepali private sector, on Thursday urged the government to resolve the issue of India holding back 1,000 metric tonnes of newsprint imported by Kantipur Publications.

Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Confederation of Nepalese Industries (CNI) sent a letter to the Ministry of Commerce and Supplies (MoCS) on Thursday asking it to initiate efforts to release the newsprint from Kolkata port in India where it has been stopped. India is yet to release the newsprint, stopped since the last 28 days.

“The FNCCI wants to draw the attention of the Government of Nepal, the Ministry of Commerce and Supplies and the Government of India on the holding up of newsprint that has been imported as per international standards and the trade treaty of both the countries,” the FNCCI’s letter reads.

The FNCCI has urged the MoCS to take initiatives to bring the newsprint to Nepal at the earliest as it said further delay could seriously hamper the printing of the Publications’ newspapers. The CNI also urged the MoCS to take appropriate steps to have the newsprint released. “Goods imported in compliance with the procedures prescribed in protocol-6 of the Nepal-India Transit Treaty cannot be obstructed,” the CNI’s letter states. The CNI said the blocking of the newsprint is against the letter and spirit of the transit treaty and against the transit right of Nepal as a landlocked country.

The Advertising Association of Nepal (AAN) also condemned the holding up of the newsprint.
It has urged all concerned to resolve the issue at the earliest

CHINA’S BIG OFFER

25.Jun.2010

At a time when several Nepali products are still nowhere in the international market, China is providing duty-free facility to Nepal from next week.

According to the Chinese Foreign Ministry, China is providing duty free facility from July 1 to 33 underdeveloped countries, including Nepal, Bangladesh and the Maldives of South Asia. Twenty-six African countries are also on the list of the countries getting duty-free access in China, said the ministry said.

Chinese news reports said Nepal’s northern neighbour will provide duty-free access to 4,768 products imported from 33 countries. Textile, agriculture, mineral, steel, silver and water products will get zero-duty access.

IPOS UP, RIGHTS ISSUE DOWN

25.Jun.2010

The capital market witnessed a rise in initial public offerings while the issuance of rights shares decreased over the first 11 months of the current fiscal year compared to the same last year.
A total of 24 companies issued ordinary shares and 23 companies issued rights shares while the Securities Board of Nepal (SEBON) had given the go-ahead to 26 companies to issue ordinary shares and 25 companies to issue rights shares. Seven companies had made IPOs while 40 companies had issued rights shares.

With the rise in IPOs, the capital market saw an injection of 22,759,040 units of ordinary shares worth Rs. 2.27 billion in the current fiscal year against 13,692,000 units worth Rs. 1.36 billion last year.
However, a total of 76,854,570 rights shares worth Rs. 7.68 billion were issued in the 11 months of the fiscal year in contrast to 101,181,300 units worth Rs. 10.11 billion.

SEBON director Neeraj Giri said, “The short time frame set by Nepal Rastra Bank for new banks and financial institutions to go public might have increased the number of ordinary shares.” Arniko Development Bank and Seti Bittiya Sanstha are planning to issue 980,000 and 196,000 shares while Siddhartha Bank and Gorkha Finance will be issuing 4,761,000 and 691,423 rights shares.’
KATHMANDU, JUN 24 – The capital market witnessed a rise in initial public offerings while the issuance of rights shares decreased over the first 11 months of the current fiscal year compared to the same last year.

A total of 24 companies issued ordinary shares and 23 companies issued rights shares while the Securities Board of Nepal (SEBON) had given the go-ahead to 26 companies to issue ordinary shares and 25 companies to issue rights shares. Seven companies had made IPOs while 40 companies had issued rights shares.

With the rise in IPOs, the capital market saw an injection of 22,759,040 units of ordinary shares worth Rs. 2.27 billion in the current fiscal year against 13,692,000 units worth Rs. 1.36 billion last year.
However, a total of 76,854,570 rights shares worth Rs. 7.68 billion were issued in the 11 months of the fiscal year in contrast to 101,181,300 units worth Rs. 10.11 billion.

SEBON director Neeraj Giri said, “The short time frame set by Nepal Rastra Bank for new banks and financial institutions to go public might have increased the number of ordinary shares.” Arniko Development Bank and Seti Bittiya Sanstha are planning to issue 980,000 and 196,000 shares while Siddhartha Bank and Gorkha Finance will be issuing 4,761,000 and 691,423 rights shares.’

JITCO SCHEME FAILS TO TAKE OFF

11.Jun.2010

Nepali agencies entrusted with sending industrial trainees under the Japan International Training Cooperation Organization (JITCO) programme have failed to receive requests on the scale anticipated due to lack of proper marketing of Nepal’s capacity and effective communication with Japanese firms.

There are 172 agencies including the Federation of Nepalese Chambers of Commerce (FNCCI) authorised to send trainees to Japan, but they have been able to send only 16 trainees so far.

The FNCCI has sent 11 and Siddhartha Buddha Overseas five, said the Department of Foreign Employment.”Global Alliance has received a request for some 20 trainees and Fusion International for six,” said Mohan Krishna Sapkota, director general of the department. “Nepali agencies could not do their marketing well in Japan amid the financial crisis.”Tilak Ranabhat, former president of the Nepal Association of Foreign Employment Agencies and managing director of Noor Opportunities Overseas, said that the agencies were not able to receive good demand from Japanese firms because of the impact of the global financial crisis.
“The Japanese firms themselves are not confident enough to hire trainees after the impact of the financial crisis,” he added.

The FNCCI, which had targeted to send 500 trainees in 2010, is in the process of sending 36
to work in the agriculture sector. It has selected 20 women and 16 men who have completed their culture and language training.

According to Sthaneshwor Devkota, executive director of the Foreign Employment Promotion Board, the main reason behind the failure in bagging requests is lack of effective communication with Japanese firms by the Nepali agencies.

“JITCO had said that Nepal could supply around 20,000 trainees during 2010, but Nepali agencies have not been able to grab the opportunity,” said Devkota. “Even though the process is a little complicated according to JITCO officials, it could be the best chance for Nepal as Japan is gradually lessening its dependency on Chinese workers.”

China supplies 80 percent of the 50,000 workers taken in by Japanese firms annually. Japan has also put Nepal, Bangladesh and Mongolia as its prioritised source destinations targeting to reduce its dependence on China.

The JITCO programme offers industrial training and internship to Nepali workers in 64 occupations and 120 courses as per the bilateral agreement made in October 2009.

The trainees can earn a monthly allowance of Rs. 35,000-40,000. After completing one year of traineeship, they can earn more than Rs. 100,000 per month as an intern.

The FNCCI had sent the very first batch of six trainees last year to the garment sector.