The price of musuro (broken lentil) has gone up by 35 per cent in a year whereas that of coarse rice has gone up by 17 per cent. However, due to the bird flu scare in the eastern district of Jhapa chicken price has gone down by 28 per cent in Kathmandu Valley.
"The price of musuro is 35 per cent higher this January than last, though it decreased by three per cent from last month," said a report jointly prepared by World Food Proframme (WFP)-Food Security Monitoring and Analysis System, Ministry of Agriculture and Cooperatives-Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Consumer Interest Protect Forum.
The two per cent increase in the price of coarse rice in January signals the start of the seasonal downward trend in prices after paddy harvest, but the price of coarse rice still remains 17 per cent higher than last January, it said. "Prices are expected to continue increasing until the next harvest and this price trend needs to be closely monitored," it warned.
Wheat prices, however, remained relatively constant in comparison to December but have increased by two per cent in comparison to last January. "The recent reports of bird flu in the eastern border district of Jhapa has resulted in a 28 per cent decrease in the price of chicken in Kathmandu," the report said.
Due to lower priced Indian commodities' impact in Nepal, mustard oil and soybean oil prices have decreased by 3.5 and two per cent, respectively. "But cooking oils are still higher by approximately 30 per cent than last January," it said.
The report has voiced serious concern over the cost of transportation that still remains high in spite of reduction in fuel prices by Nepal Oil Corporation (NOC).
Saturday, January 31, 2009
Nepse picks up pace again
The share market was on a roll this week with the Nepse index closing 49.38 points higher to go to 658.83 points. The previous week's closure was at 609.46 points.
Though the market showed signs of growth this week after a long time, investors are still not confident of its continuty. "These are only occasional spurts, and the overall market sentiment is very much bearish as there are no encouraging signs from any quarter," said an investor.
Low investors confidence was also revealed in the negative growth of market capitalisation. This week also, the market lost Rs 46,680.81 million as it registered a total market capitalisation of Rs 361,384.01 million on the last day of trading in the domestic market. Last week, it was at Rs 408,064.82 million.
The transaction amount also plunged by 35.29 per cent to Rs 199.88 million against last week's Rs 308.889 million worth transaction. Only 65 companies saw their shares traded this week against 82 companies last week.
However, the sensitive index -- a barometer of Group-A companies -- soared by 11.88 points to touch 169.39 points from last week's closing. Similarly, the float index -- calculated on the basis of real transactions -- also gained 4.21 points to reach 64.04 points from last week's closing of 59.83 points.
All market leaders, the commercial bank, development bank, finance companies and insurance groups except hydropower group, gained this week. The commercial banks group gained 56.43 points to reach 617.46 points, development bank group gained 84.08 points to reach 987.90 points, finance company group gained 8.06 points to reach 873.78 points and insurance company group gained 14.30 points to reach 715.16 points. The hydropower group lost 3.24 points to end up at 840.01 points.
The market opened in the green on Sunday at 616.15 points, an increase of 6.69 points from last week's closing of 609.46 points. On Monday, Nepse gained a whopping 29.17 points to stand at 645.32 points. On Wednesday, it soared by 13.51 points to close at 658.83 points.
The sole secondary market was closed on Tuesday on account of Lhosar and on Thursday on account of Martyrs' Day. It remained opened for only three days. But all the three sessions ended on a positive note, pushing Nepse up by 49.38 points.
This week's top performers were International Leasing and Finance (with Rs 18.24 million), Standard Chartered Bank Nepal (with Rs 17.97 million), Bank of Kathmandu (with Rs 15.21 million), Kumari bank (with Rs 10.65 million) and Nepal Development and Employment Promotion Bank (with 9.83 million).
In terms of share units traded also, International Leasing and Finance topped the chart with 35,000-unit shares this week whereas in terms of number of transactions Nepal Development and Employment Promotion Bank topped the chart with 345 transactions.
As usual, this week too bonds and debentures did not see any transactions on the Nepse floor. Analysts said the government should encourage people to invest on bonds and debentures as they are a safer bet than shares.
Though the market showed signs of growth this week after a long time, investors are still not confident of its continuty. "These are only occasional spurts, and the overall market sentiment is very much bearish as there are no encouraging signs from any quarter," said an investor.
Low investors confidence was also revealed in the negative growth of market capitalisation. This week also, the market lost Rs 46,680.81 million as it registered a total market capitalisation of Rs 361,384.01 million on the last day of trading in the domestic market. Last week, it was at Rs 408,064.82 million.
The transaction amount also plunged by 35.29 per cent to Rs 199.88 million against last week's Rs 308.889 million worth transaction. Only 65 companies saw their shares traded this week against 82 companies last week.
However, the sensitive index -- a barometer of Group-A companies -- soared by 11.88 points to touch 169.39 points from last week's closing. Similarly, the float index -- calculated on the basis of real transactions -- also gained 4.21 points to reach 64.04 points from last week's closing of 59.83 points.
All market leaders, the commercial bank, development bank, finance companies and insurance groups except hydropower group, gained this week. The commercial banks group gained 56.43 points to reach 617.46 points, development bank group gained 84.08 points to reach 987.90 points, finance company group gained 8.06 points to reach 873.78 points and insurance company group gained 14.30 points to reach 715.16 points. The hydropower group lost 3.24 points to end up at 840.01 points.
The market opened in the green on Sunday at 616.15 points, an increase of 6.69 points from last week's closing of 609.46 points. On Monday, Nepse gained a whopping 29.17 points to stand at 645.32 points. On Wednesday, it soared by 13.51 points to close at 658.83 points.
The sole secondary market was closed on Tuesday on account of Lhosar and on Thursday on account of Martyrs' Day. It remained opened for only three days. But all the three sessions ended on a positive note, pushing Nepse up by 49.38 points.
This week's top performers were International Leasing and Finance (with Rs 18.24 million), Standard Chartered Bank Nepal (with Rs 17.97 million), Bank of Kathmandu (with Rs 15.21 million), Kumari bank (with Rs 10.65 million) and Nepal Development and Employment Promotion Bank (with 9.83 million).
In terms of share units traded also, International Leasing and Finance topped the chart with 35,000-unit shares this week whereas in terms of number of transactions Nepal Development and Employment Promotion Bank topped the chart with 345 transactions.
As usual, this week too bonds and debentures did not see any transactions on the Nepse floor. Analysts said the government should encourage people to invest on bonds and debentures as they are a safer bet than shares.
Friday, January 30, 2009
Government seeks agents for destination Japan
The government has invited applications from manpower agencies in order to select them as agents for sending Nepali trainee workers to Japan.
However, intellectuals are concerned that the Japan job aspirants might end up paying more than required if manpower agencies are given the task. "The government itself should send trainee workers to Japan and save them from getting cheated," said an economist on condition of anonymity. He added that the governmment's decision would create controversy similar to the one for South Korean jobs before the Nepal and South Korean governments sealed a deal on sending Nepali migrant workers to South Korea. At present, Korean job-seekers have to spend around Rs 70,000 each. Earlier, they had to pay a hefty sum of Rs 5 to 6 lakh.
"The government has given February 4 as the deadline for application," said Mohan Krishna Sapkota, director general of the Department of Foreign Employment (DoEF). He added that it has already started the long-stalled process of sending Nepali trainee workers to Japan. "After February 4, the department wil start the process of selecting agencies," he said.
The government has set some criteria, such as the agency should have the largest network nationwide and also own its office building for getting selected as the agent. Meanwhile, those who won't be selected can work as sub-agents.
Japan is being viewed as a new lucrative destination for Nepali migrant workers after the government stopped issuing work permits for Malaysia -- the second most-favoured destination of Nepali job-aspirants -- following the Malaysian government's move not to take in foreign workers due to the global financial crisis.
In 2003, on December 3 the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Japan International Training Cooperation Organisation (JITCO) signed a preliminary agreement for sending Nepali migrant workers to Japan after the government gave FNCCI the responsibility of sending Nepali workers to Japan. Still, even after almost five years not a single Nepali trainee worker has been sent to Japan that has started taking foreign workers in agriculture, construction, food processing, fishery, electronics and garments sectors from 14 countries.
Sapkota also said that his department would now onwards hold press meets on a fortnightly basis to disseminate information on the procedings of the department. "From Sunday, no brokers will be allowed to enter the department," he said while promising that the department would serve service-seekers on a first-come, first-served basis.
"We have also started collecting data about those returning," he said adding that the department is also eyeing alternative destinations like Oman and Libya. As matters stand, it is the government's compulsion at present to find new destinations as it has not been able to generate jobs here at home.
Some time ago, on an average 656 Nepalis used to leave for various destinations daily in search of greener pastures. At a conservative estimate, 1.24 million Nepalis are working abroad. The country was also reaping the benefits of the remittance sent home by migrant workers that was contributing 17.4 per cent to the total GDP. Of the total remittance, Saudi Arabia tops the list, followed by Qatar and Malaysia.
However, intellectuals are concerned that the Japan job aspirants might end up paying more than required if manpower agencies are given the task. "The government itself should send trainee workers to Japan and save them from getting cheated," said an economist on condition of anonymity. He added that the governmment's decision would create controversy similar to the one for South Korean jobs before the Nepal and South Korean governments sealed a deal on sending Nepali migrant workers to South Korea. At present, Korean job-seekers have to spend around Rs 70,000 each. Earlier, they had to pay a hefty sum of Rs 5 to 6 lakh.
"The government has given February 4 as the deadline for application," said Mohan Krishna Sapkota, director general of the Department of Foreign Employment (DoEF). He added that it has already started the long-stalled process of sending Nepali trainee workers to Japan. "After February 4, the department wil start the process of selecting agencies," he said.
The government has set some criteria, such as the agency should have the largest network nationwide and also own its office building for getting selected as the agent. Meanwhile, those who won't be selected can work as sub-agents.
Japan is being viewed as a new lucrative destination for Nepali migrant workers after the government stopped issuing work permits for Malaysia -- the second most-favoured destination of Nepali job-aspirants -- following the Malaysian government's move not to take in foreign workers due to the global financial crisis.
In 2003, on December 3 the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Japan International Training Cooperation Organisation (JITCO) signed a preliminary agreement for sending Nepali migrant workers to Japan after the government gave FNCCI the responsibility of sending Nepali workers to Japan. Still, even after almost five years not a single Nepali trainee worker has been sent to Japan that has started taking foreign workers in agriculture, construction, food processing, fishery, electronics and garments sectors from 14 countries.
Sapkota also said that his department would now onwards hold press meets on a fortnightly basis to disseminate information on the procedings of the department. "From Sunday, no brokers will be allowed to enter the department," he said while promising that the department would serve service-seekers on a first-come, first-served basis.
"We have also started collecting data about those returning," he said adding that the department is also eyeing alternative destinations like Oman and Libya. As matters stand, it is the government's compulsion at present to find new destinations as it has not been able to generate jobs here at home.
Some time ago, on an average 656 Nepalis used to leave for various destinations daily in search of greener pastures. At a conservative estimate, 1.24 million Nepalis are working abroad. The country was also reaping the benefits of the remittance sent home by migrant workers that was contributing 17.4 per cent to the total GDP. Of the total remittance, Saudi Arabia tops the list, followed by Qatar and Malaysia.
Gold price touches all-time high
Gold in the domestic market hit a new historic high of Rs 26,440 per tola (11.664 gram) on Friday and gold dealers are claiming it might go even higher next week. The week witnessed a price rise of Rs 900 per 10 gram as it closed at Rs 21,820 last Friday.
According to the Nepal Gold and Silver Dealers' Association (NEGOSIDA), gold in the domestic market was traded at Rs 22,720 per 10 gram on Friday, breaking its previous record of Rs 22, 550 per 10 gram this Sunday.
After opening at a record high of Rs 22,550 per 10 gram, the precious yellow metal, however, plunged by Rs 45 per 10 gram on Monday to record Rs 22,505 per 10 gram.
On Tuesday, the price shot up from Rs 22,550 per 10-gram to Rs 26,300 per tola (11.664 gram). On Wednesday, it again lost Rs 45 to come down to Rs 22,505 whereas Thursday witnessed a further fall of Rs 130 to put it at Rs 22,375 per 10 gram. But on Friday, the last day of trading in the domestic market, gold soared to Rs 22,720 per 10 gram, an all-time high.
Last year, gold price had hit record highs twice in the domestic market -- on October 13, 2008 at Rs 21,860 per 10 gram (Rs 25,500 per tola) leaving behind the previous highest price which was Rs 25,450 per tola (11.664 gram) on July 16, 2008.
"The price hike has however hit the trading of gold as transaction took a nose-dive to five to six kg a week," NEGOSIDA president Tej Ratna Shakya said adding that the price might still go up.
The price of gold in the international market on Friday was $911 per ounce. For current delivery, it closed at $927.30 per troy ounce on Friday on the New York Mercantile Exchange.
Silver also witnessed a rise of Rs 4 per 10 gram to reach Rs 317 from Rs 313 on Sunday.
According to the Nepal Gold and Silver Dealers' Association (NEGOSIDA), gold in the domestic market was traded at Rs 22,720 per 10 gram on Friday, breaking its previous record of Rs 22, 550 per 10 gram this Sunday.
After opening at a record high of Rs 22,550 per 10 gram, the precious yellow metal, however, plunged by Rs 45 per 10 gram on Monday to record Rs 22,505 per 10 gram.
On Tuesday, the price shot up from Rs 22,550 per 10-gram to Rs 26,300 per tola (11.664 gram). On Wednesday, it again lost Rs 45 to come down to Rs 22,505 whereas Thursday witnessed a further fall of Rs 130 to put it at Rs 22,375 per 10 gram. But on Friday, the last day of trading in the domestic market, gold soared to Rs 22,720 per 10 gram, an all-time high.
Last year, gold price had hit record highs twice in the domestic market -- on October 13, 2008 at Rs 21,860 per 10 gram (Rs 25,500 per tola) leaving behind the previous highest price which was Rs 25,450 per tola (11.664 gram) on July 16, 2008.
"The price hike has however hit the trading of gold as transaction took a nose-dive to five to six kg a week," NEGOSIDA president Tej Ratna Shakya said adding that the price might still go up.
The price of gold in the international market on Friday was $911 per ounce. For current delivery, it closed at $927.30 per troy ounce on Friday on the New York Mercantile Exchange.
Silver also witnessed a rise of Rs 4 per 10 gram to reach Rs 317 from Rs 313 on Sunday.
Call for national strategy to protect IPR
Law enforcement agencies' apathy has recently killed two people and some more have been blinded. The market is flooded with fake drugs but law enforcement agencies have no clue as to the protection of Intellectual Property Rights (IPR), experts said here today.
Speaking at the 'National Workshop on Intellectual Property Strategy for Nepal' organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and supported by the American embassy and Microsoft, they blamed lack of awareness among stakeholders and consumers, lackadaisical approach of law enforcement agencies and lack of strict and up-to-date legal provisions to tackle such incidents that are becoming more frequent. "Law enforcement angencies should be trained in IPR as it's a technical issue," opined the experts.
"Though there are some acts -- like Copyright Act -- to protect manufacturers' and consumers' rights, these need reform," said Supreme Court registrar Dr Ram Krishna Timilsina.
He added that the present law was not strong enough to punish those involved in churning out fake products and causing irreversible damage to others. "Policy intervention is a must in such cases to protect the rights of consumers and the manufacturers," Timilsina added.
FNCCI president Kush Kumar Joshi said Nepal was lagging behind in the implementation of IPR. "Industries are hit hard due to lack of a proper and prompt action plan," he said.
Nepali IP laws need harmonisation in accordance with international laws and World Trade Organsiation (WTO) policy for preparing a national strategy to crack down on fake and pirated products.
"If IPR is properly monitored, Nepal's indigenous industries can be protected," said Randy Berry, Charge D' Affairs at the American embassy in Kathmandu. He also voiced serious concern over the fake medicines flooding in the market saying that these could cause a huge loss of human lives. "Around 60 per cent of the medicines in the domestic market is fake," he said adding that if IPR was properly addressed, health and education -- basic human rights -- could be protected.
Today's national workshop is a follow-up of last year's Global Intellectual Property Rights Academy's conference that was held in May 2008. The workshop today formed a draft of a National Action Plan to protect IPR -- creations of the mind, inventions, literary and artistic works, scientific works, symbols, names and images used in the industry, commerce and communication sectors.
"There are various issues involved in IP, like copyright, patent and trademarks," said Birat Thapa, chairman of the ICT Development Unit of FNCCI. Participants were of the view that awareness, enforcement and legislation are essential to the protection of IPR.
Speaking at the 'National Workshop on Intellectual Property Strategy for Nepal' organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and supported by the American embassy and Microsoft, they blamed lack of awareness among stakeholders and consumers, lackadaisical approach of law enforcement agencies and lack of strict and up-to-date legal provisions to tackle such incidents that are becoming more frequent. "Law enforcement angencies should be trained in IPR as it's a technical issue," opined the experts.
"Though there are some acts -- like Copyright Act -- to protect manufacturers' and consumers' rights, these need reform," said Supreme Court registrar Dr Ram Krishna Timilsina.
He added that the present law was not strong enough to punish those involved in churning out fake products and causing irreversible damage to others. "Policy intervention is a must in such cases to protect the rights of consumers and the manufacturers," Timilsina added.
FNCCI president Kush Kumar Joshi said Nepal was lagging behind in the implementation of IPR. "Industries are hit hard due to lack of a proper and prompt action plan," he said.
Nepali IP laws need harmonisation in accordance with international laws and World Trade Organsiation (WTO) policy for preparing a national strategy to crack down on fake and pirated products.
"If IPR is properly monitored, Nepal's indigenous industries can be protected," said Randy Berry, Charge D' Affairs at the American embassy in Kathmandu. He also voiced serious concern over the fake medicines flooding in the market saying that these could cause a huge loss of human lives. "Around 60 per cent of the medicines in the domestic market is fake," he said adding that if IPR was properly addressed, health and education -- basic human rights -- could be protected.
Today's national workshop is a follow-up of last year's Global Intellectual Property Rights Academy's conference that was held in May 2008. The workshop today formed a draft of a National Action Plan to protect IPR -- creations of the mind, inventions, literary and artistic works, scientific works, symbols, names and images used in the industry, commerce and communication sectors.
"There are various issues involved in IP, like copyright, patent and trademarks," said Birat Thapa, chairman of the ICT Development Unit of FNCCI. Participants were of the view that awareness, enforcement and legislation are essential to the protection of IPR.
Thursday, January 29, 2009
Call for building up pharma sector
Experts today opined that apart from battling the menace of fake drugs flooding the home market, Nepali pharmaceutical sector should build strength by the end of 2015, otherwise it would wilt before with firms that will openly enter the country under Nepal’s commitment to the World Trade Organisation (WTO), a global trade body.
Addressing the 19th anniversary ceremony of Deurali Janata Pharmaceuticals Ltd (DJPL) here, Bhupendra Bahadur Thapa, joint secretaryat the Ministry of Health,said domestic pharmaceutical companies should prepare themselves for the tough competition after 2015.
There are some 40 pharmaceutical companies at present but more than 250 foreigncompanies have also registered their brands to sell in Nepal. “DJPL — that produces 130 types of medicines — has been awarded ISO 14001 and ISO 9001 apart from WHO GMP for its quality management,” said Maniratna Shakya, vice-president (technical) of DJPL.
“We are ready to be part of the economic revolution,” Haribhakta Sharma, executive director of DJPL — that provides jobs to 250 people — said, adding that for its part of Corporate Social Responsibility (CSR), the company has established Deurali Janata Foundation.
Addressing the 19th anniversary ceremony of Deurali Janata Pharmaceuticals Ltd (DJPL) here, Bhupendra Bahadur Thapa, joint secretaryat the Ministry of Health,said domestic pharmaceutical companies should prepare themselves for the tough competition after 2015.
There are some 40 pharmaceutical companies at present but more than 250 foreigncompanies have also registered their brands to sell in Nepal. “DJPL — that produces 130 types of medicines — has been awarded ISO 14001 and ISO 9001 apart from WHO GMP for its quality management,” said Maniratna Shakya, vice-president (technical) of DJPL.
“We are ready to be part of the economic revolution,” Haribhakta Sharma, executive director of DJPL — that provides jobs to 250 people — said, adding that for its part of Corporate Social Responsibility (CSR), the company has established Deurali Janata Foundation.
Sale ban has liquor makers in a bind
Two persons died as a result of drinking spurious that has flooded the market but the government instead of taking action against the adulteraters is punishing us by banning our products, liquor industry players alleged today. They said that they also suspected the involvement of some bureaucrats and the police as the seized spurious liquor bottles had proper stickers, just like as on the original ones.
The industry that contributes 25 per cent to the total revenue is in a soup due to deaths of the two persons caused by drinking Khukri Rum and Virgin Whisky brands of liquor. “The government’s ban on our products without any investigation just days after it gave us a clean cheat does not make sense,” said Sabin Lal Shrestha, president of Nepal Liquor and Cigarette Industries’ Association (NLCIA).
There is a huge gang involved in making the spurious duplicate liquor, Shrestha said accusing the government of banning some of the industry’s best-selling products even when it did not find anything wrong after tests. “The government took liquor samples from liquor industries and gave us a clean cheat, only to ban some of our products when the second person died,” he added.Police had conducted raids in Boudha and Dhapasi a few weeks ago and confiscated a huge stock of spurious liquor of various popular brands that contained methanol — a deadly substance — but bottled properly with stickers like original ones.
“Those involved in running a duplicate liquor factory were arrested but set free after nominal fines,” Shrestha said adding that they should be punished severely as adulateration was only not only black marketeering but also a crime against humanity. “The adulteraters prepared fake stickers, mixed methanol in the liquor and sold the poisonous mixture but the government is treating us as like culprit,” he said.
Amit Goswami, chief executive officer of The Nepal Distilleries Pvt Ltd that manufactures Khukri Rum, a popular brand that is being blamed for the recent deaths, opined that thegovernment should take steps to check duplicate and adulterated liquor instead of banning popular and genuine brands.
Bhaskar Raj Rajkarnikar, vice-president of the Federation of Nepalese Chambers of Commerce (FNCCI), said that the government should protect local brands. “If any industry indulges in adulteration, it should be punished but if the liquor industries are not doing so their brands must be protected,” he said.
The industry that contributes 25 per cent to the total revenue is in a soup due to deaths of the two persons caused by drinking Khukri Rum and Virgin Whisky brands of liquor. “The government’s ban on our products without any investigation just days after it gave us a clean cheat does not make sense,” said Sabin Lal Shrestha, president of Nepal Liquor and Cigarette Industries’ Association (NLCIA).
There is a huge gang involved in making the spurious duplicate liquor, Shrestha said accusing the government of banning some of the industry’s best-selling products even when it did not find anything wrong after tests. “The government took liquor samples from liquor industries and gave us a clean cheat, only to ban some of our products when the second person died,” he added.Police had conducted raids in Boudha and Dhapasi a few weeks ago and confiscated a huge stock of spurious liquor of various popular brands that contained methanol — a deadly substance — but bottled properly with stickers like original ones.
“Those involved in running a duplicate liquor factory were arrested but set free after nominal fines,” Shrestha said adding that they should be punished severely as adulateration was only not only black marketeering but also a crime against humanity. “The adulteraters prepared fake stickers, mixed methanol in the liquor and sold the poisonous mixture but the government is treating us as like culprit,” he said.
Amit Goswami, chief executive officer of The Nepal Distilleries Pvt Ltd that manufactures Khukri Rum, a popular brand that is being blamed for the recent deaths, opined that thegovernment should take steps to check duplicate and adulterated liquor instead of banning popular and genuine brands.
Bhaskar Raj Rajkarnikar, vice-president of the Federation of Nepalese Chambers of Commerce (FNCCI), said that the government should protect local brands. “If any industry indulges in adulteration, it should be punished but if the liquor industries are not doing so their brands must be protected,” he said.
Wednesday, January 28, 2009
Complaint lodged against Bank of Asia Nepal's IPO
An investor has -- for the first time in the history of the country's capital market -- filed a complaint at the Securities Board of Nepal (Sebon) against Initial Public Offering (IPO).
Bishwombhar Ghimire, an investor has filed a complaint against the Bank of Asia Nepal (BoAN) urging the regulatory authority of the capital market to protect investors' interest by stopping its IPO.
"Since some relatives of the bank's promoters are reportedly involved in illegal import of poppy seeds, the bank should be stopped from issuing the IPO to protect public interest," Ghimire claimed in his complaint that he filed today and a copy of which was acquired by The Himalayan Times.
It is the first ever such case filed against any institution at Sebon. The bank is planning to issue Rs 30 million IPO and has appointed NMB Bank its issue manager. "The board will investigate, if the complaint is valid," Niraj Giri, director of Sebon said adding that the board cannot however stop the bank from issuing IPO only on the basis of a complaint based on media reports. "According to the Act, only if the promoters are blacklisted can the board can stop it from issuing IPO," he added.Sebon has recently approved shares worth around Rs 8 billion. The IPOs, rights shares, debentures and bonus shares add up to over Rs 8 billion.
IPOs in the pipeline are Rs 370 million of Sunrise Bank, Rs 300 million each of Citizens' Bank and Prime Commercial Bank, Rs 260 million of Vibor Bikas Bank and Rs 230 million of the much-awaited Chilime Hydropower.
The IPOs adds up to over Rs 2.2 billion, whereas Sebon has also approved rights shares worth Rs 3.76 billion, debenture worth Rs 500 million and bonus shares worth Rs 1.17 billion. The Chilime Hydropower -- constructed with domestic technology -- has also been long planning to raise Rs 240 million through an equity offering. The Chilime model is no doubt an example of how Nepalis can themselves construct hydro power plant by raising money from the domestic market, if the government has a clear vision of utilising the capital market for development purpose.
Apart from that Agriculture Development Bank is also planning its IPO amounting to Rs 960 million, the largest ever IPO in the country's capital market history.
Bishwombhar Ghimire, an investor has filed a complaint against the Bank of Asia Nepal (BoAN) urging the regulatory authority of the capital market to protect investors' interest by stopping its IPO.
"Since some relatives of the bank's promoters are reportedly involved in illegal import of poppy seeds, the bank should be stopped from issuing the IPO to protect public interest," Ghimire claimed in his complaint that he filed today and a copy of which was acquired by The Himalayan Times.
It is the first ever such case filed against any institution at Sebon. The bank is planning to issue Rs 30 million IPO and has appointed NMB Bank its issue manager. "The board will investigate, if the complaint is valid," Niraj Giri, director of Sebon said adding that the board cannot however stop the bank from issuing IPO only on the basis of a complaint based on media reports. "According to the Act, only if the promoters are blacklisted can the board can stop it from issuing IPO," he added.Sebon has recently approved shares worth around Rs 8 billion. The IPOs, rights shares, debentures and bonus shares add up to over Rs 8 billion.
IPOs in the pipeline are Rs 370 million of Sunrise Bank, Rs 300 million each of Citizens' Bank and Prime Commercial Bank, Rs 260 million of Vibor Bikas Bank and Rs 230 million of the much-awaited Chilime Hydropower.
The IPOs adds up to over Rs 2.2 billion, whereas Sebon has also approved rights shares worth Rs 3.76 billion, debenture worth Rs 500 million and bonus shares worth Rs 1.17 billion. The Chilime Hydropower -- constructed with domestic technology -- has also been long planning to raise Rs 240 million through an equity offering. The Chilime model is no doubt an example of how Nepalis can themselves construct hydro power plant by raising money from the domestic market, if the government has a clear vision of utilising the capital market for development purpose.
Apart from that Agriculture Development Bank is also planning its IPO amounting to Rs 960 million, the largest ever IPO in the country's capital market history.
Crisis may claim 50m jobs by 2009: ILO
Two years of global financial and economic meltdown could leave over 50 million more people unemployed by the end of 2009, the International Labour Organisation (ILO) warned today. New estimates indicate that "global unemployment in 2009 could increase over 2007 by a range of 18 million to 30 million workers, and more than 50 million if the situation continues to deteriorate," the ILO said in a statement.
That could raise the world's jobless total to 198 million, or 230 million people in the worst case scenario, according to the figures in the ILO's report, "Global Employment Trends 2009". In 2007, some 179 million people were out of work, according to the report."
The ILO's message is realistic, not alarmist," Director-General Juan Somavia said. "We have to assume that we are now facing a global jobs crisis." Officials were more inclined to a middle range scenario of 30 million job losses for 2007-2009, raising the worldwide unemployment tally to 210 million. The lowest range was based on existing International Monetary Fund (IMF) data but labour experts here believe it is already outdated."I believe the lowest one has already been overtaken," Somavia said. That could propel the global unemployment rate to an average of 6.5 per cent, or 7.1 per cent in the worst case, for this year, against 5.7 per cent in 2007.
The report indicated that 190 million people were jobless by the end of 2008 after 11 million jobs were shed around the world last year alone, based on a combination of official national data and estimates. If that figure were confirmed, the economic crisis could claim two to four times more jobs this year alone.
Somavia urged the Group of 20 (G20) leading industrial and emerging economies to urgently consider measures to boost "productive" investments, create jobs and bolster social protection.
That could raise the world's jobless total to 198 million, or 230 million people in the worst case scenario, according to the figures in the ILO's report, "Global Employment Trends 2009". In 2007, some 179 million people were out of work, according to the report."
The ILO's message is realistic, not alarmist," Director-General Juan Somavia said. "We have to assume that we are now facing a global jobs crisis." Officials were more inclined to a middle range scenario of 30 million job losses for 2007-2009, raising the worldwide unemployment tally to 210 million. The lowest range was based on existing International Monetary Fund (IMF) data but labour experts here believe it is already outdated."I believe the lowest one has already been overtaken," Somavia said. That could propel the global unemployment rate to an average of 6.5 per cent, or 7.1 per cent in the worst case, for this year, against 5.7 per cent in 2007.
The report indicated that 190 million people were jobless by the end of 2008 after 11 million jobs were shed around the world last year alone, based on a combination of official national data and estimates. If that figure were confirmed, the economic crisis could claim two to four times more jobs this year alone.
Somavia urged the Group of 20 (G20) leading industrial and emerging economies to urgently consider measures to boost "productive" investments, create jobs and bolster social protection.
Laid off migrant workers to be compensated
Migrant workers returning from the Gulf countries and Malaysia due to job cuts there will get compensation."The compensation can be paid after a worker provides enough proof that the lay-off was due to global economic recession," said Sthaneshwor Devkota, executive director of the Employment Promotion Board (EPB).
The recruiting company or Nepali embassy in that country should give in writing that the worker had to return due to economic recession and not due to other reasons, he said adding that the compensation will be borne half by the government and half by the man-power agency that had sent the worker.
The government will provide compensation from the welfare fund set up to protect the migrant workers' rights. "Around Rs 24.5 million is put aside from the welfare fund for compensation," he said adding that if a worker returns after six months, 40 per cent of the expenses would be compensated. Similarly, if a worker returns after a year, 25 per cent of the expenses would be compensated.
However, a three-member committee headed by Devkota, an undersecretary from the Foreign Ministry and the president of Nepal Foreign Employment Agencies' Association Tilak Ranabhat will decide on the compensation claims.Meanwhile, a study team headed by Minister for Transport Management and Labour Lekh Raj Bhatta will leave for Sri Lanka and the Philippines to study the crisis management on how thwy are coping with lay off of their migrany workers. Another team headed by Labour Secretary will visit Dubai, Qatar and Saudi Arabia to study the ground realities.Last friday, the government stopped issuing new work permits to Nepali jobseekers for Malaysia until further notice following an announcement by the Malaysian government to stop recruitment of foreign workers.
Qatar has also reduced its foreign workforce after it felt the heat of economic recession. The Gulf country and the East Asian country have more concentration of Nepali workforce, especially in manufacturing and service sectors.
The suspension of new work permits for Malaysia will hit remittance that had kept the Nepali economy afloat even during the conflict period. Of the total remittance, that from Saudi Arabia tops the list followed by Qatar and Malaysia. The total contribution of remittance to the GDP is 17.4 per cent. If remittance drops by half, the forex and foreign trade will also be hit. The spiralling effect will then hit financial institutions.
Every month, 3,500 Nepali job-seekers used to leave for Malaysia. Of the total foreign workforce in Malaysia, Nepalis comprise a significant 25 per cent. There are 2.1 million foreign workers in Malaysia, of which 0.4 million are Nepali.
The Nepali mission in Malaysia had requested the MoLTM not to issue new permits for Malaysia due to job insecurity for workers. More than 50,000 Nepalis left for Malaysia through official channels during 2007-08.
The recruiting company or Nepali embassy in that country should give in writing that the worker had to return due to economic recession and not due to other reasons, he said adding that the compensation will be borne half by the government and half by the man-power agency that had sent the worker.
The government will provide compensation from the welfare fund set up to protect the migrant workers' rights. "Around Rs 24.5 million is put aside from the welfare fund for compensation," he said adding that if a worker returns after six months, 40 per cent of the expenses would be compensated. Similarly, if a worker returns after a year, 25 per cent of the expenses would be compensated.
However, a three-member committee headed by Devkota, an undersecretary from the Foreign Ministry and the president of Nepal Foreign Employment Agencies' Association Tilak Ranabhat will decide on the compensation claims.Meanwhile, a study team headed by Minister for Transport Management and Labour Lekh Raj Bhatta will leave for Sri Lanka and the Philippines to study the crisis management on how thwy are coping with lay off of their migrany workers. Another team headed by Labour Secretary will visit Dubai, Qatar and Saudi Arabia to study the ground realities.Last friday, the government stopped issuing new work permits to Nepali jobseekers for Malaysia until further notice following an announcement by the Malaysian government to stop recruitment of foreign workers.
Qatar has also reduced its foreign workforce after it felt the heat of economic recession. The Gulf country and the East Asian country have more concentration of Nepali workforce, especially in manufacturing and service sectors.
The suspension of new work permits for Malaysia will hit remittance that had kept the Nepali economy afloat even during the conflict period. Of the total remittance, that from Saudi Arabia tops the list followed by Qatar and Malaysia. The total contribution of remittance to the GDP is 17.4 per cent. If remittance drops by half, the forex and foreign trade will also be hit. The spiralling effect will then hit financial institutions.
Every month, 3,500 Nepali job-seekers used to leave for Malaysia. Of the total foreign workforce in Malaysia, Nepalis comprise a significant 25 per cent. There are 2.1 million foreign workers in Malaysia, of which 0.4 million are Nepali.
The Nepali mission in Malaysia had requested the MoLTM not to issue new permits for Malaysia due to job insecurity for workers. More than 50,000 Nepalis left for Malaysia through official channels during 2007-08.
Growing unemployment may topple ruling coalition
Growing unemployment poses the single biggest threat to the longevity of the Maoist-led government. If the issue is not addressed immediately, it will definitely snowball into a nationwide crisis, precipitating the ruling coalition’s downfall.
How can the problem be tackled? On paper, the prognosis is simple. The government needs to create more jobs. But, in reality the task is proving to be Herculean. To make matters worse, the en masse return of migrant workers is likely to have a cascading effect on both the national exchequer and forex reserve. Remittance makes a significant 17.4 per cent contribution to the
Gross Domestic Product. Besides, it is a major source of foreign currency earner, notably, the US dollar.
The unemployment crisis is caught between two stools. On the one hand, Malaysia and the Gulf — the major destination for Nepali migrant workers — are in the middle of downsizing, thanks to the global downturn, and no new job opportunities are also being created back home.
Entrepreneurs share a similar sentiment. They fear that even the existing jobs at home are in danger since the government has failed to protect businesses much as it would preach about protection of national industrial capitalism. The government-affiliated unions are forcing closure of industries on ‘unreasonable demands’ over implementation of minimum wage and permanent appointment.
“Militant trade unionism has been on the rise even though industrialists have agreed to pay the minimum wages as suggested by the government,” said an industrialist on condition of anonymity. “All the workers are asking for a flat Rs 1,300 hike in their salaries. Those who are getting more than 4,600 — the minimum wage — are also demanding the raise,” he added. The government has fixed Rs 4,600 as minimum salary — Rs 3,050 is the basic component and an additional Rs 1,550 is considered as dearness allowance.
If the present impasse continues, the business houses that are battling other blues like inordinate power cuts and frequent bandhs are certain to do a rethink of persisting with their enterprises.
Perhaps, an exit will be a last resort in these troubled times.
There are four aspects of business: opportunity, expansion, sustainability and exit. Business opportunity and expansion are a distant dream in the present context because industries are fighting tooth and nail for their survival.
“Prior to the Constituent Assembly (CA) elections, entrepreneurs, along with the public, had hoped that there would be stability,” said Rajendra Kumar Khetan, industrialist and CA member.
“But, in view of the present scenario, the big question remains: what next?”he asked. A section of industrialists blame government for promoting anarchy. While, others prefer to maintain studied silence.
The government, too, is indulging in the blamegame. It alleges that the latter are minting money by exploiting people. Though it does not have any credible statistics to back its claims as it failed to reduce transportation fares.
Finance Minister Dr Baburam Bhattarai had threatened in pubic that the government would intervene, if the prices did not come down. But the catch lies somewhere else.
“Transportation cost is preventing revision of prices in the domestic market,” reasoned Khetan.
Industrial Districts Management Ltd (IDM), too, had to join issue with the militant trade unions to ensure smooth running of factories. For instance, the IDM exerted pressure for vacating all occupied buildings in industrial estates across the country. Be that as it may, various industrial districts, including the Patan Industrial District, is still under the siege of Maoist-affiliated trade union. Despite repeated attempts, the agitators could not be dislodged. They threaten of protest, if forced to vacate.
Earlier, the Young Communist League (YCL) — the para-military wing of the Maoists — had vacated the Balaju
Industrial Area after much persuasion. On January 7, the YCL also vacated Miracle Nepal (Pvt) Ltd — owned by Saiyad Samim Shah — inside the Balaju Industrial District in the capital after holding on to it for around two years.
How can the problem be tackled? On paper, the prognosis is simple. The government needs to create more jobs. But, in reality the task is proving to be Herculean. To make matters worse, the en masse return of migrant workers is likely to have a cascading effect on both the national exchequer and forex reserve. Remittance makes a significant 17.4 per cent contribution to the
Gross Domestic Product. Besides, it is a major source of foreign currency earner, notably, the US dollar.
The unemployment crisis is caught between two stools. On the one hand, Malaysia and the Gulf — the major destination for Nepali migrant workers — are in the middle of downsizing, thanks to the global downturn, and no new job opportunities are also being created back home.
Entrepreneurs share a similar sentiment. They fear that even the existing jobs at home are in danger since the government has failed to protect businesses much as it would preach about protection of national industrial capitalism. The government-affiliated unions are forcing closure of industries on ‘unreasonable demands’ over implementation of minimum wage and permanent appointment.
“Militant trade unionism has been on the rise even though industrialists have agreed to pay the minimum wages as suggested by the government,” said an industrialist on condition of anonymity. “All the workers are asking for a flat Rs 1,300 hike in their salaries. Those who are getting more than 4,600 — the minimum wage — are also demanding the raise,” he added. The government has fixed Rs 4,600 as minimum salary — Rs 3,050 is the basic component and an additional Rs 1,550 is considered as dearness allowance.
If the present impasse continues, the business houses that are battling other blues like inordinate power cuts and frequent bandhs are certain to do a rethink of persisting with their enterprises.
Perhaps, an exit will be a last resort in these troubled times.
There are four aspects of business: opportunity, expansion, sustainability and exit. Business opportunity and expansion are a distant dream in the present context because industries are fighting tooth and nail for their survival.
“Prior to the Constituent Assembly (CA) elections, entrepreneurs, along with the public, had hoped that there would be stability,” said Rajendra Kumar Khetan, industrialist and CA member.
“But, in view of the present scenario, the big question remains: what next?”he asked. A section of industrialists blame government for promoting anarchy. While, others prefer to maintain studied silence.
The government, too, is indulging in the blamegame. It alleges that the latter are minting money by exploiting people. Though it does not have any credible statistics to back its claims as it failed to reduce transportation fares.
Finance Minister Dr Baburam Bhattarai had threatened in pubic that the government would intervene, if the prices did not come down. But the catch lies somewhere else.
“Transportation cost is preventing revision of prices in the domestic market,” reasoned Khetan.
Industrial Districts Management Ltd (IDM), too, had to join issue with the militant trade unions to ensure smooth running of factories. For instance, the IDM exerted pressure for vacating all occupied buildings in industrial estates across the country. Be that as it may, various industrial districts, including the Patan Industrial District, is still under the siege of Maoist-affiliated trade union. Despite repeated attempts, the agitators could not be dislodged. They threaten of protest, if forced to vacate.
Earlier, the Young Communist League (YCL) — the para-military wing of the Maoists — had vacated the Balaju
Industrial Area after much persuasion. On January 7, the YCL also vacated Miracle Nepal (Pvt) Ltd — owned by Saiyad Samim Shah — inside the Balaju Industrial District in the capital after holding on to it for around two years.
Tuesday, January 27, 2009
NOC plan gathers dust at ministry
Nepal Oil Corporation (NOC) has been long planning to provide subsidy for the down-trodden people and students. But still the draft manual for subsidy is gathering dust in the Ministry of Commerce and Supply.Though there is no actual data of down trodden people, there are six lakh students from plus two level to the university -- according to a survey -- who could get subsidised kerosene and gas, if it comes into implementation.However, speaking at an interaction on 'NOC and Transparency' here today Lalit Bahadur Limbu, acting chief commissioner of Commission for Investigation of Abuse of Authority (CIAA), said that CIAA will start monthly monitoring of the Ministry of Commerce and Supply as it received a lots of complaints of the ministry."The CIAA is soon going to launch monitoring programmes to check corruption in the ministry," Limbu said addressing the programme organised by Human Development and Anticorruption Group (HUDAG) to mark its eight anniversary.The sole supplier of the petroleum products has, however, been making profit in recent months -- though it has accumulative loss of around Rs 15 billion -- due to drop in the prices of oil in the international market. In December, NOC posted a profit of Rs 426.9 million and January might see equal amount of profit."But NOC couldnot downward revise price immediately due to fluctuations in international prices," Digamber Jha, managing director of NOC said adding that price adjustment according to international price is impractical as it might encourage back flow of petroleum products to India due to price difference in bordering towns of India and Nepal.Meanwhile, Saroj Raj Pandey, president of Nepal Petroleum Dealers' Association (NPDA) blamed the supplies ministry for encouraging corruption. "The ministry is itself involved in the corruption," he accused.It took NPDA a lots of effort to pressurise ministry to equalise diesel and kerosene price," he said adding that Rs 700 million corruption has been stopped after the price equalisation.
According to the figure, NOC has around Rs 60 billion annual transaction. It also pays a huge amount of tax at around Rs 12 billion to the gopvernment.Nepal has one of the highest Air Turbine Fuel (ATF) charges. "Due to high ATF price most of the international airlines are not willing to fly to kathmandu," said Prachanda Man Shrestha, CEO of Nepal Tourism Board (NTB). "The expensive aviation fuel has also adversely affected the frequency of international flights," he added.Hong Kong has reduced the ATF surcharge for some international airlines, including Nepal Airlines Corp, to attract more international flights. NOC has also reduced ATF prices thrice since October 2008 but its in no mood to reduce again soon. "NOC imported 68,534.11 KL of ATF during the fiscal year 2007-08, whereas it sold 68,938.21 KL, according to the data.NOC figures reveal that the total petroleum products imported during the fiscal year 2007-08 is at 7,25,622.63 KL, whereas it sold a total of 7,27,762.92 KL of Petroleum products. It had imported and sold 96,836.84 Metric Tonnes (MT) of cooking gas.
According to the figure, NOC has around Rs 60 billion annual transaction. It also pays a huge amount of tax at around Rs 12 billion to the gopvernment.Nepal has one of the highest Air Turbine Fuel (ATF) charges. "Due to high ATF price most of the international airlines are not willing to fly to kathmandu," said Prachanda Man Shrestha, CEO of Nepal Tourism Board (NTB). "The expensive aviation fuel has also adversely affected the frequency of international flights," he added.Hong Kong has reduced the ATF surcharge for some international airlines, including Nepal Airlines Corp, to attract more international flights. NOC has also reduced ATF prices thrice since October 2008 but its in no mood to reduce again soon. "NOC imported 68,534.11 KL of ATF during the fiscal year 2007-08, whereas it sold 68,938.21 KL, according to the data.NOC figures reveal that the total petroleum products imported during the fiscal year 2007-08 is at 7,25,622.63 KL, whereas it sold a total of 7,27,762.92 KL of Petroleum products. It had imported and sold 96,836.84 Metric Tonnes (MT) of cooking gas.
Highlights of monetary policy review by India's central bank
Mumbai: Following are the highlights of the quarterly monetary policy review conducted by the Reserve Bank of India (RBI) here Friday in which some key rates were left unchanged and the country's growth targeted was lowered for this fiscal:
- Bank rate kept unchanged at 6 percent.
- Repo rate has been kept unchanged at 5.5 percent.
- Reverse repo rate kept unchanged at 4 percent.
- Cash reserve ratio (CRR) kept unchanged at 5 percent.
- Statutory liquidity ratio (SLR) kept unchanged at 24 percent.
- Gross domestic product (GDP) growth target for 2008-09 lowered to 7 percent.
- Inflation to be in the range of 4-4.5 percent.
- Inflation to fall below 3 percent by March.
- Central bank interventions since September resulted in more liquidity of IRs.3.88 trillion (IRs.388,000 crore).
- Permanent cut in SLR has added IRs.400 billion (IRs 40, 000 crore) to liquidity.
- Capital expenditure plans slowing down, but ongoing projects to continue.
- Fiscal deficit target revised to 5.9 percent of GDP from 2.5 percent.
- Excise, customs duty cuts may lower government revenues by 0.6 percent of GDP.
- Consolidated fiscal deficit of states is expected to rise to 2.6 percent of GDP.
- Bank rate kept unchanged at 6 percent.
- Repo rate has been kept unchanged at 5.5 percent.
- Reverse repo rate kept unchanged at 4 percent.
- Cash reserve ratio (CRR) kept unchanged at 5 percent.
- Statutory liquidity ratio (SLR) kept unchanged at 24 percent.
- Gross domestic product (GDP) growth target for 2008-09 lowered to 7 percent.
- Inflation to be in the range of 4-4.5 percent.
- Inflation to fall below 3 percent by March.
- Central bank interventions since September resulted in more liquidity of IRs.3.88 trillion (IRs.388,000 crore).
- Permanent cut in SLR has added IRs.400 billion (IRs 40, 000 crore) to liquidity.
- Capital expenditure plans slowing down, but ongoing projects to continue.
- Fiscal deficit target revised to 5.9 percent of GDP from 2.5 percent.
- Excise, customs duty cuts may lower government revenues by 0.6 percent of GDP.
- Consolidated fiscal deficit of states is expected to rise to 2.6 percent of GDP.
Sunday, January 25, 2009
NAC to buy a fleet of six aircraft
The ailing national flag-carrier Nepal Airlines Corporation (NAC) is going to get a new lease of life. If everything goes as planned, it will have a new aircraft by in one-and-a-half years. NAC is not only planning to buy a single aircraft but a fleet of six aircraft over a duration of the next five years.
"Initially, one aircraft would be delivered by the first half of 2010, if all goes according to plan," said NAC managing director Sugat Ratna Kansakar. "But over a period of five years – at intervals of six to nine months -- we will acquire a complete fleet of six brand new aircraft," he added.
There has been a long debate on whether to buy or lease new aircraft. NAC had earlier in the late '80s got two Boeings 757 on lease. NAC, then known as Royal Nepal Airlines Corporation (RNAC) got the Boeings, Karnali in 1987 and Gandaki in 1988. After the people's movement in 1990, the successive governments of Nepali Congress and Nepal Communist Party (United Marxist-Leninist) leased aircraft -- from Lauda Airlines and China South Western Airlines amid a gamut of controversy.
But the present Maoist-led government has decided to buy brand new aircraft instead of leasing planes. "We are buying brand new aircraft from either Boeing or Airbus -- both global aircraft manufacturing companies directly," Kansakar said adding that the national flag carrier has also held several rounds of talks with representatives of both the aircraft manufacturing companies.
Though NAC has more or less decided on the model it is yet to decide from which manufacturer to buy. "Depending on the type of deal, we will go for either Airbus or Boeing," he said. "Apart from that, we are also working out the financing aspect," he added.
In his budget speech for the fiscal year 2008-09, Finance Minister Dr Baburam Bhattarai had assured that the government would guarantee to get the necessary funding to purchase two large aircraft for NAC in order to enhance the international seats capacity and make services more timely and reliable.
But for the timebeing NAC is bringing aircraft in wetlease.
On the eve of Nepal Tourism Year 2011, Nepal badly needs new aircraft as the two present ageing aircraft, time and again, keep hitting technical glitches, forcing NAC to cancel flights.
"Initially, one aircraft would be delivered by the first half of 2010, if all goes according to plan," said NAC managing director Sugat Ratna Kansakar. "But over a period of five years – at intervals of six to nine months -- we will acquire a complete fleet of six brand new aircraft," he added.
There has been a long debate on whether to buy or lease new aircraft. NAC had earlier in the late '80s got two Boeings 757 on lease. NAC, then known as Royal Nepal Airlines Corporation (RNAC) got the Boeings, Karnali in 1987 and Gandaki in 1988. After the people's movement in 1990, the successive governments of Nepali Congress and Nepal Communist Party (United Marxist-Leninist) leased aircraft -- from Lauda Airlines and China South Western Airlines amid a gamut of controversy.
But the present Maoist-led government has decided to buy brand new aircraft instead of leasing planes. "We are buying brand new aircraft from either Boeing or Airbus -- both global aircraft manufacturing companies directly," Kansakar said adding that the national flag carrier has also held several rounds of talks with representatives of both the aircraft manufacturing companies.
Though NAC has more or less decided on the model it is yet to decide from which manufacturer to buy. "Depending on the type of deal, we will go for either Airbus or Boeing," he said. "Apart from that, we are also working out the financing aspect," he added.
In his budget speech for the fiscal year 2008-09, Finance Minister Dr Baburam Bhattarai had assured that the government would guarantee to get the necessary funding to purchase two large aircraft for NAC in order to enhance the international seats capacity and make services more timely and reliable.
But for the timebeing NAC is bringing aircraft in wetlease.
On the eve of Nepal Tourism Year 2011, Nepal badly needs new aircraft as the two present ageing aircraft, time and again, keep hitting technical glitches, forcing NAC to cancel flights.
MFIs manna for the very poor
Micro credit has become a wheel of change for Nepal as it has not only empowered women financially but also brought about social change.
Releasing a microcredit report 'State of the Microcredit Summit Campaign Report 2009,' here today, Shankar Man Shrestha, chief executive officer (CEO) of Rural Microfinance Development Centre (RMDC) -- a development bank operating as an apex microfinance organisation --- said that Micro Finance Institutions (MFIs) in Nepal have served around 1.1 million people. It had a target of serving 1.2 million poor. "However, the RMDC-affiliated 72 institutions have so far served 7,00,000 families and within this year 2,00,000 more families will get our services to improve their living standards," he said.
During the conflict era also repayment was at 99 per cent as the poor people are more honest, Shrestha said adding that microcredit has created immediate employment in the rural areas.
Micro-loans are given to help extremely poor people start or expand a range of tiny businesses. It became a buzz word after Professor Mohammed Yunus from Bangladesh won the Nobel peace Prize in 2006 for his microcredit campaign in his country. It could be a bridge to bridge the rich-poor gap as it only lends to the landless and poorest of the poor. Microcredit has also increased accessibility of the poor to banks. "It's like a bank -- at your doorstep -- that lends you without collateral for starting a small business," Shrestha said.
Though some of the hilly and remote areas have not yet benefitted from MFIs, Shrestha said that microcredit has helped increase general household income.
More than 100 million poorest families in the world received micro-loans in 2007, exceeding a goal set 10 years ago, according to the report released today by the Microfinance Summit Campaign.
Releasing a microcredit report 'State of the Microcredit Summit Campaign Report 2009,' here today, Shankar Man Shrestha, chief executive officer (CEO) of Rural Microfinance Development Centre (RMDC) -- a development bank operating as an apex microfinance organisation --- said that Micro Finance Institutions (MFIs) in Nepal have served around 1.1 million people. It had a target of serving 1.2 million poor. "However, the RMDC-affiliated 72 institutions have so far served 7,00,000 families and within this year 2,00,000 more families will get our services to improve their living standards," he said.
During the conflict era also repayment was at 99 per cent as the poor people are more honest, Shrestha said adding that microcredit has created immediate employment in the rural areas.
Micro-loans are given to help extremely poor people start or expand a range of tiny businesses. It became a buzz word after Professor Mohammed Yunus from Bangladesh won the Nobel peace Prize in 2006 for his microcredit campaign in his country. It could be a bridge to bridge the rich-poor gap as it only lends to the landless and poorest of the poor. Microcredit has also increased accessibility of the poor to banks. "It's like a bank -- at your doorstep -- that lends you without collateral for starting a small business," Shrestha said.
Though some of the hilly and remote areas have not yet benefitted from MFIs, Shrestha said that microcredit has helped increase general household income.
More than 100 million poorest families in the world received micro-loans in 2007, exceeding a goal set 10 years ago, according to the report released today by the Microfinance Summit Campaign.
Saturday, January 24, 2009
Capital market loses heavily
The capital market lost Rs 7,37,58.56 million this week, dipping down to Rs 334,305.26 million from last week’s closing of Rs 408,064.82 million market capitalisation. The floatedmarket capitalisation also dropped to Rs 79,295.99 million this week.
Despite Finance MinisterDr Baburam Bhattarai’s confession that he did not mean to dub the share market a gambling racket, the market did not see any improvement. Low investor confidence pulled the market down by a whopping 41.76 points to drop to 609.46 points from last week’s closing of 651.22 points. Investors in development bank, hydropower, commercial bank and finance companies groups lost heavily as their indices witnessed a fall of 94.04 points to 903.82 points, 69.99 points to 843.25 points, 50.14 points to 561.03 points and 31.69 points to 865.72 points, resepectively.
Similarly, investors in all other groups also lost except those in the insurance companies group that saw growth continuously for the third week despite gloom in the market. Insurance companies group gained 8.01 points to reach 690.86 points from last week’s closing of 682.85 points.
The sensitive index — a barometer of Group-A companies that has 77 companies — plunged by 11.69 points to drop to 157.51 points from last week’s closing of 169.20 points. It is indeed rare for the sensitive index to drop by a double digit. Similarly, the float index — calculated on the basis of real transactions — lost 3.72 points to drop to 59.83 points from last week’s closing of 63.55 points. Analysts claim that the government needs to bring package programmes to cou-nter the crisis of confidence.However, the transaction amount of 82 companies saw a rise by 31.73 per cent to rest at Rs 308.889 million from last week’s fall of 28.65 per cent.
Nepse closed in the red zone on all five days this week. The domestic market has five-day trading, from Sunday to Thursday. The market opened in the red on Sunday at 650.73 points from last week’s closing of 651.22 points. It went on further dropping each day and plunged by 16.33 points on Thursday to close the weekly trading at 609.46 points in the sole secondary market.
This week’s top performers were Nepal Development and Employment Promotion Bank (with 27.04 million), Standard Chartered Bank Nepal (with Rs 26.37 million), Nepal Telecom (with Rs 19.72 million), Nepal Bangladesh Bank (with Rs 18.82 million) and Lumbini Bank (with Rs 17.61 million).In terms of number of number of transaction also, Nepal Development and Employment Promotion Bank topped the chart with 795 transactions, but in terms of share units traded NMC Mutual Fund topped with 1,85,000-unit shares.This week, Nepse listed 31,11,824-unit of bonus shares of Standard Chartered Bank and 7,50,000-unit rights shares of United Finance
Despite Finance MinisterDr Baburam Bhattarai’s confession that he did not mean to dub the share market a gambling racket, the market did not see any improvement. Low investor confidence pulled the market down by a whopping 41.76 points to drop to 609.46 points from last week’s closing of 651.22 points. Investors in development bank, hydropower, commercial bank and finance companies groups lost heavily as their indices witnessed a fall of 94.04 points to 903.82 points, 69.99 points to 843.25 points, 50.14 points to 561.03 points and 31.69 points to 865.72 points, resepectively.
Similarly, investors in all other groups also lost except those in the insurance companies group that saw growth continuously for the third week despite gloom in the market. Insurance companies group gained 8.01 points to reach 690.86 points from last week’s closing of 682.85 points.
The sensitive index — a barometer of Group-A companies that has 77 companies — plunged by 11.69 points to drop to 157.51 points from last week’s closing of 169.20 points. It is indeed rare for the sensitive index to drop by a double digit. Similarly, the float index — calculated on the basis of real transactions — lost 3.72 points to drop to 59.83 points from last week’s closing of 63.55 points. Analysts claim that the government needs to bring package programmes to cou-nter the crisis of confidence.However, the transaction amount of 82 companies saw a rise by 31.73 per cent to rest at Rs 308.889 million from last week’s fall of 28.65 per cent.
Nepse closed in the red zone on all five days this week. The domestic market has five-day trading, from Sunday to Thursday. The market opened in the red on Sunday at 650.73 points from last week’s closing of 651.22 points. It went on further dropping each day and plunged by 16.33 points on Thursday to close the weekly trading at 609.46 points in the sole secondary market.
This week’s top performers were Nepal Development and Employment Promotion Bank (with 27.04 million), Standard Chartered Bank Nepal (with Rs 26.37 million), Nepal Telecom (with Rs 19.72 million), Nepal Bangladesh Bank (with Rs 18.82 million) and Lumbini Bank (with Rs 17.61 million).In terms of number of number of transaction also, Nepal Development and Employment Promotion Bank topped the chart with 795 transactions, but in terms of share units traded NMC Mutual Fund topped with 1,85,000-unit shares.This week, Nepse listed 31,11,824-unit of bonus shares of Standard Chartered Bank and 7,50,000-unit rights shares of United Finance
Foreign airlines to promote Nepali tourism
Etihad Airways, the national carrier of United Arab Emirates in Abu Dhabi, has new plans to promote Nepali tourism.
"We are holding talks with Nepal Tourism Board (NTB) on how Etihad can support in promoting Nepali tourism," said Joost den Hartog, Etihad Airways' regional general manager for the Indian sub-continent, central and north Asia.
"The airlines is working for better connectivity between Nepal and the outer world so that more tourists can visit Nepal," he said adding that the airlines has been helping Nepali tourism grow by connecting Kathmandu to Abu Dhabi and beyond with the rest of the world.
Apart from that, Etihad Airways that started flying to Kathmandu since last year is selling a package of mountain flights to see Mt Everest and other Himalayan ranges in association with a Nepali private airliner -- Yeti Airlines. "From February, we are offering Etihad's frequent flyers a mountain flight that will definitely promote Nepal's tourism in Europe, where we are planning to sell this package," said Hartog, who believes that pricing -- considered a key factor for passengers -- depends on better connectivity.
Best products and better service has kept the airlines ahead of all others that fly to Kathmandu, he opined. "We have secured all market segments as we cater to the needs of every stratum," said Hartog.
Hartog, who has strong cross-culture experience in the airlines sector, also promised to bring more tourists to Nepal despite the recession as Nepal is still affordable. "Etihad will bring more inbound trourists as we have better connectivity," he said.
The Abu Dhabi-based airlines served more than six million passengers last year, alongwith 90,000 Nepalis living in the UAE and the Middle East.
Etihad's Kathmandu operations -- the 11th network in the Indian sub-continent -- are extremely popular among travellers flying to key destinations such as London, New York, Frankfurt, Doha, Saudi Arabia and Abu Dhabi.
"During the first year, the airlines performed strongly with average seat factors of more than 89 per cent," he said, terming Etihad's operation in Nepal successful one.
Hartog said that despite the present economic gloom that has hit global air travel, the airlines was growing -- internationally and in the Nepali context as well. "Our market share has not decreased despite the recession. Rather, it's growing," he said.
Etihad Airways -- that serves Nepali workers working in the Middle East and inbound and outbound tourists of Nepal -- has been operating four flights a week by a two cabin Airbus A330-200 configured to carry 262 passengers, with 22 business class and 240 economy class seats. The leading Middle East airliner has been operating in 50 destinations through 43 planes.
"We are holding talks with Nepal Tourism Board (NTB) on how Etihad can support in promoting Nepali tourism," said Joost den Hartog, Etihad Airways' regional general manager for the Indian sub-continent, central and north Asia.
"The airlines is working for better connectivity between Nepal and the outer world so that more tourists can visit Nepal," he said adding that the airlines has been helping Nepali tourism grow by connecting Kathmandu to Abu Dhabi and beyond with the rest of the world.
Apart from that, Etihad Airways that started flying to Kathmandu since last year is selling a package of mountain flights to see Mt Everest and other Himalayan ranges in association with a Nepali private airliner -- Yeti Airlines. "From February, we are offering Etihad's frequent flyers a mountain flight that will definitely promote Nepal's tourism in Europe, where we are planning to sell this package," said Hartog, who believes that pricing -- considered a key factor for passengers -- depends on better connectivity.
Best products and better service has kept the airlines ahead of all others that fly to Kathmandu, he opined. "We have secured all market segments as we cater to the needs of every stratum," said Hartog.
Hartog, who has strong cross-culture experience in the airlines sector, also promised to bring more tourists to Nepal despite the recession as Nepal is still affordable. "Etihad will bring more inbound trourists as we have better connectivity," he said.
The Abu Dhabi-based airlines served more than six million passengers last year, alongwith 90,000 Nepalis living in the UAE and the Middle East.
Etihad's Kathmandu operations -- the 11th network in the Indian sub-continent -- are extremely popular among travellers flying to key destinations such as London, New York, Frankfurt, Doha, Saudi Arabia and Abu Dhabi.
"During the first year, the airlines performed strongly with average seat factors of more than 89 per cent," he said, terming Etihad's operation in Nepal successful one.
Hartog said that despite the present economic gloom that has hit global air travel, the airlines was growing -- internationally and in the Nepali context as well. "Our market share has not decreased despite the recession. Rather, it's growing," he said.
Etihad Airways -- that serves Nepali workers working in the Middle East and inbound and outbound tourists of Nepal -- has been operating four flights a week by a two cabin Airbus A330-200 configured to carry 262 passengers, with 22 business class and 240 economy class seats. The leading Middle East airliner has been operating in 50 destinations through 43 planes.
Remittance hit, BoP crisis looms, Forex to suffer
The suspension of new work permits for Malaysia following an announcement by the Malaysian government to stop recruitment of foreign workers will hit remittance — one of the major contributors to Nepal’s economy.
The total contribution of remittance to the GDP is 17.4 per cent, according to Nepal Rastra Bank. If remittance falls by half due to drastic job cuts in Malaysia and the Gulf — countries where there are more Nepalis — the Balance of Payment (BoP) and foreign reserve will be hit hard.“If the remittance drops — as looks certain from the present scenario — by half, our trade will be hit,” said former vice-president of National Planning Commission (NPC), Dr Shanker Sharma.
Remittance helps reduce the trade deficit. As Nepal has to pay for imports in dollars, low forexreserve will further escalate the huge trade deficit between Nepal and India forcing Nepal to either re-adjust its currency against Indian rupee or run to International Monetary Fund to rescue economy,” he said.
The spending on education and health in rural areas will also drop. “Our economy is afloat due to remittance,” added Sharma. The spiralling effect will then hit financial institutions, housing loans and real estate. “As six months of this fiscal year have already passed, the impact will be reflected in next fiscal year,” he said. The remittance has also help reduce rural poverty.
The Ministry of Labour and Transport Management yesterday decided to stopissuance of new work permits after receiving a letter from the Nepali mission in Malaysia.“However, we are searching for new labour markets,” said Mohan Krishna Sapkota, director general of the Department of Foreign Employment that started this week the long-stalled process of sending Nepali trainee workers to Japan.
“Every month, 3,500 Nepali job-seekers used to leave for Malaysia,” Sapkota said at a programme here today. Of the 2.1 million foreign workers in Malaysia, 0.4 million are Nepalis.Nepal received Rs 143 billion in remittance last year, with Saudi Arabia topping the list, followed by Qatar and Malaysia.At a conservative estimate, there are 1.24 million Nepalis working abroad. Of these, some four lakh arein Malaysia. “If each of three lakh Nepalis send $100 per month from Malaysia, the monthly remittance crosses $30 million,” Chandra Prasad Dhakal, president of Nepal Remitters’ Association (NRA), said.
The Maoist-led government has not yet been able to create jobs at home to substitute foreign employment but Lekhraj Bhatta, Minister for Labour and Transport Management (MoLTM), avers that the trend of out-bound Nepali youth is not a healthy sign. The Maoist minister from the far-west is of the opinion that the country should provide jobs at home.
“There will be more chaos if Nepalis start returning en masse,” said Dan Bahadur Tamang, a manpower agent. “Nepali embassies abroad have to be active and work to protect the rights of Nepali workers,” he suggested.
According to Sapkota, the Nepali embassy official in Malaysia will hold talks with the Malaysian Labour Department on Wednesday. More than 50,500 Nepalis left for Malaysia through official channels during the fiscal year 2007-08.
The total contribution of remittance to the GDP is 17.4 per cent, according to Nepal Rastra Bank. If remittance falls by half due to drastic job cuts in Malaysia and the Gulf — countries where there are more Nepalis — the Balance of Payment (BoP) and foreign reserve will be hit hard.“If the remittance drops — as looks certain from the present scenario — by half, our trade will be hit,” said former vice-president of National Planning Commission (NPC), Dr Shanker Sharma.
Remittance helps reduce the trade deficit. As Nepal has to pay for imports in dollars, low forexreserve will further escalate the huge trade deficit between Nepal and India forcing Nepal to either re-adjust its currency against Indian rupee or run to International Monetary Fund to rescue economy,” he said.
The spending on education and health in rural areas will also drop. “Our economy is afloat due to remittance,” added Sharma. The spiralling effect will then hit financial institutions, housing loans and real estate. “As six months of this fiscal year have already passed, the impact will be reflected in next fiscal year,” he said. The remittance has also help reduce rural poverty.
The Ministry of Labour and Transport Management yesterday decided to stopissuance of new work permits after receiving a letter from the Nepali mission in Malaysia.“However, we are searching for new labour markets,” said Mohan Krishna Sapkota, director general of the Department of Foreign Employment that started this week the long-stalled process of sending Nepali trainee workers to Japan.
“Every month, 3,500 Nepali job-seekers used to leave for Malaysia,” Sapkota said at a programme here today. Of the 2.1 million foreign workers in Malaysia, 0.4 million are Nepalis.Nepal received Rs 143 billion in remittance last year, with Saudi Arabia topping the list, followed by Qatar and Malaysia.At a conservative estimate, there are 1.24 million Nepalis working abroad. Of these, some four lakh arein Malaysia. “If each of three lakh Nepalis send $100 per month from Malaysia, the monthly remittance crosses $30 million,” Chandra Prasad Dhakal, president of Nepal Remitters’ Association (NRA), said.
The Maoist-led government has not yet been able to create jobs at home to substitute foreign employment but Lekhraj Bhatta, Minister for Labour and Transport Management (MoLTM), avers that the trend of out-bound Nepali youth is not a healthy sign. The Maoist minister from the far-west is of the opinion that the country should provide jobs at home.
“There will be more chaos if Nepalis start returning en masse,” said Dan Bahadur Tamang, a manpower agent. “Nepali embassies abroad have to be active and work to protect the rights of Nepali workers,” he suggested.
According to Sapkota, the Nepali embassy official in Malaysia will hold talks with the Malaysian Labour Department on Wednesday. More than 50,500 Nepalis left for Malaysia through official channels during the fiscal year 2007-08.
Friday, January 23, 2009
Nepal-Sri Lanka revise ASA
Nepal and Sri Lanka are poised to have direct connectivity again after a decade-long hiatus. Officials of the two countries today signed the revised new Air Sevices Agreement (ASA) to start direct flights between Kathmandu and Colombo.
G N Vithanage, secretary at the Port and Aviation Ministry of Sri Lanka and leader of the seven-member visiting Sri Lankan team, and Ramchandra Man Singh, secretary at the Ministry of Tourism and Civil Aviation (MoTCA) signed the revised agreement on behalf of their respective countries. The revised ASA will pave the way for both countries to operate 14 flights per week.
Nepal and Sri Lanka had signed an ASA in 1977 and since then they have reviewed it several times -- in 1999, 2004, 2007 and in 2008. But there was no direct filght between from the two countries after Nepal Airlines (NAC) -- previously Royal Nepal Airlines (RNAC) -- stopped flights to Colombo in 1998 due to various reasons.
"As there is an increase in the number of Sri Lankan tourists visiting Nepal, direct flights between Colombo and Kathmandu will help boost tourism and expand mutual trade and economic activities," said Singh after the signing ceremony. A representative of Sri Lankan Air, however, said that they do not have any plans to start direct flights immediately. "We are thinking of extending the Colombo-New Delhi flight to Kathmandu at first," the official said.
The revised ASA is more liberal than the earlier one. "The liberal framework of this revised agreement will boost connectivity between the two South Asian countries," said Vithanage.The revised ASA is also an opportunity for Nepali private airlines. "If Nepali private airliners want to fly to Colombo, this agreement has opened up a new avenue for them," said MoTCA secretary Singh.
According to the new revised agreement -- signed in Kathmandu today -- there is no limit to cargo operations. The previous agreement allowed only a limited number of cargo flights. The agreement also provides fifth freedom right for designated airlines of both countries to use four points except New Delhi.
Nepal has ASAs with 35 countries and it has been renewing ASAs and increasing flight frequencies for mutual benefit with most of them. Currently, only one-and-a-half dozen countries have direct or connecting flights to Nepal.
NAC again RNAC?
KATHMANDU: The former Royal Nepal Airlines (RNAC) was renamed Nepal Airlines (NAC) after the people's April uprising two years back. The Maoist government re-dubbed RNAC as NAC because the centuries-old monarchy had been done away with. However, the ministry is now preparing to rename the national flag carrier Republican Nepal Airlines (RNAC). The code -- RA -- will, however, not be changed. The next meeting of the cabinet is likely to decide on the renaming issue.
G N Vithanage, secretary at the Port and Aviation Ministry of Sri Lanka and leader of the seven-member visiting Sri Lankan team, and Ramchandra Man Singh, secretary at the Ministry of Tourism and Civil Aviation (MoTCA) signed the revised agreement on behalf of their respective countries. The revised ASA will pave the way for both countries to operate 14 flights per week.
Nepal and Sri Lanka had signed an ASA in 1977 and since then they have reviewed it several times -- in 1999, 2004, 2007 and in 2008. But there was no direct filght between from the two countries after Nepal Airlines (NAC) -- previously Royal Nepal Airlines (RNAC) -- stopped flights to Colombo in 1998 due to various reasons.
"As there is an increase in the number of Sri Lankan tourists visiting Nepal, direct flights between Colombo and Kathmandu will help boost tourism and expand mutual trade and economic activities," said Singh after the signing ceremony. A representative of Sri Lankan Air, however, said that they do not have any plans to start direct flights immediately. "We are thinking of extending the Colombo-New Delhi flight to Kathmandu at first," the official said.
The revised ASA is more liberal than the earlier one. "The liberal framework of this revised agreement will boost connectivity between the two South Asian countries," said Vithanage.The revised ASA is also an opportunity for Nepali private airlines. "If Nepali private airliners want to fly to Colombo, this agreement has opened up a new avenue for them," said MoTCA secretary Singh.
According to the new revised agreement -- signed in Kathmandu today -- there is no limit to cargo operations. The previous agreement allowed only a limited number of cargo flights. The agreement also provides fifth freedom right for designated airlines of both countries to use four points except New Delhi.
Nepal has ASAs with 35 countries and it has been renewing ASAs and increasing flight frequencies for mutual benefit with most of them. Currently, only one-and-a-half dozen countries have direct or connecting flights to Nepal.
NAC again RNAC?
KATHMANDU: The former Royal Nepal Airlines (RNAC) was renamed Nepal Airlines (NAC) after the people's April uprising two years back. The Maoist government re-dubbed RNAC as NAC because the centuries-old monarchy had been done away with. However, the ministry is now preparing to rename the national flag carrier Republican Nepal Airlines (RNAC). The code -- RA -- will, however, not be changed. The next meeting of the cabinet is likely to decide on the renaming issue.
Thursday, January 22, 2009
RBB needs recapitalisation
The only government-owned commercial bank, Rastriya Banijya Bank (RBB) needs a massive capital injection to stay afloat in the market and compete with modern technology-driven private commercial banks.
Bankers and former chairmen of Rastriya Banijya Bank (RBB) today on the eve of its 44th anniversary highlighted the hits and misses of the bank.
Prithvi Bahadur Pande, chairman and executive officer of Nepal Investment Bank, said that RBB as a complete goverment-owned commercial fianancial institution has its strengths also. "It has the largest branch network -- 137 -- and maximum deposit," he said adding that if it were made more efficient at the decision making level and in customer services it could beat any of the present private banks.
"However, in its present state, it cannot be recapitalised as it needs over Rs 65 billion capital injection," Pandey, one of the pioneers of the country's banking industry, added. The bank's negative networth stands at Rs 15.13 billion and its Non-Performing Assets (NPA) stand at Rs 6 billion. Its total assests stand at around Rs 70 billion.
RBB CEO Janardan Acharya while presenting a paper highlighted the achievements of the bank under the financial reforms programme. "Under the financial reforms programme while the bank has been successful in lowering the NPA, it still is a major challenge to the bank," he said adding that the pay and perks of the employees could not match the private banks and that had lowered the moral of the bank's employees, though they are as capable as those of the private banks.
Acharya also presented a long list of the bank's future strategy. Some experts also suggested lowering the spread rate. Krishnahari Banskota, acting finance secretary (Revenue) and the chairman of the bank accepted the weaknesses on part of the bank and promised to take serious note of them to develop RBB as the number one commercial bank. Banskota, who was appointed RBB chairman on December 3, 2008, also promised to prepare standard operation procedure to increase the bank's credibility.
Bankers and former chairmen of Rastriya Banijya Bank (RBB) today on the eve of its 44th anniversary highlighted the hits and misses of the bank.
Prithvi Bahadur Pande, chairman and executive officer of Nepal Investment Bank, said that RBB as a complete goverment-owned commercial fianancial institution has its strengths also. "It has the largest branch network -- 137 -- and maximum deposit," he said adding that if it were made more efficient at the decision making level and in customer services it could beat any of the present private banks.
"However, in its present state, it cannot be recapitalised as it needs over Rs 65 billion capital injection," Pandey, one of the pioneers of the country's banking industry, added. The bank's negative networth stands at Rs 15.13 billion and its Non-Performing Assets (NPA) stand at Rs 6 billion. Its total assests stand at around Rs 70 billion.
RBB CEO Janardan Acharya while presenting a paper highlighted the achievements of the bank under the financial reforms programme. "Under the financial reforms programme while the bank has been successful in lowering the NPA, it still is a major challenge to the bank," he said adding that the pay and perks of the employees could not match the private banks and that had lowered the moral of the bank's employees, though they are as capable as those of the private banks.
Acharya also presented a long list of the bank's future strategy. Some experts also suggested lowering the spread rate. Krishnahari Banskota, acting finance secretary (Revenue) and the chairman of the bank accepted the weaknesses on part of the bank and promised to take serious note of them to develop RBB as the number one commercial bank. Banskota, who was appointed RBB chairman on December 3, 2008, also promised to prepare standard operation procedure to increase the bank's credibility.
Monday, January 19, 2009
Nepal-Sri Lanka to review ASA
Nepal and Sri Lanka are reviewing their Air Sevices Agreement (ASA). Nepali authorities and a visiting Sri Lankan team will hold talks on Thurday, said an official at the Ministry of Tourism and Civil Aviation (MoTCA).
Nepal Airlines has long stopped its flights to Colombo due to various reasons. "Our side is busy preparing for the talks, and the full operationalisation of the ASA may top the agenda," the ministry sources said adding that the two South Asian countries' officials are meeting on January 22 in Kathmandu. MoTCA secretary Ramchandra Man Singh confirmed that the talks between the two countries are slated for January 22.
Nepal, Sri Lanka had earlier also renewed the ASA to allow direct air services between the two countries. The agreement -- signed in Colombo -- allowed designated airlines to operate four weekly flights between Kathmandu and Colombo and points beyond. However, Nepal Airlines (NAC) -- then Royal Nepal Airlines (RNAC) -- has stopped its flights to Colombo since almost eight years.
The previous agreement allowed only a limited number of passengers and the number of flights by each airline was restricted to two per week.Nepal has signed ASA with 35 countries. However, Nepal has been renewing ASAs and increasing flight frequencies for mutual benefit.On December 29 in 2008, Nepal and Bahrain renewed their Air Services Agreement (ASA) and signed a Memorandum of Understanding (MoU) to increase flight frequency and develop skilled manpower resources. According to the renewed agreement, both countries can now operate 28 flights per week. Earlier, the agreement between the two countries was that they could operate only 14 flights per week.
Meanwhile, Nepal is also likely to review Air Services Agreement (ASA) with India to scrap existing restrictions on seat allocations. It is hoped that the change in the ASA will allow Nepali airlines to operate unlimited number of flights to various Indian cities.As per the existing ASA between the two South Asian neighbours, each is restricted to only 6,000 seats per week. The limit on the number of seats has impeded Nepali Airlines' efforts to operate flights to Indian cities.
After the 1990s open air policy, Nepali private airlines have also started spreading their wings. Private airliners are requesting the government to allow them to fly to various Indian cities with unrestricted number of seats.
Nepal Airlines has long stopped its flights to Colombo due to various reasons. "Our side is busy preparing for the talks, and the full operationalisation of the ASA may top the agenda," the ministry sources said adding that the two South Asian countries' officials are meeting on January 22 in Kathmandu. MoTCA secretary Ramchandra Man Singh confirmed that the talks between the two countries are slated for January 22.
Nepal, Sri Lanka had earlier also renewed the ASA to allow direct air services between the two countries. The agreement -- signed in Colombo -- allowed designated airlines to operate four weekly flights between Kathmandu and Colombo and points beyond. However, Nepal Airlines (NAC) -- then Royal Nepal Airlines (RNAC) -- has stopped its flights to Colombo since almost eight years.
The previous agreement allowed only a limited number of passengers and the number of flights by each airline was restricted to two per week.Nepal has signed ASA with 35 countries. However, Nepal has been renewing ASAs and increasing flight frequencies for mutual benefit.On December 29 in 2008, Nepal and Bahrain renewed their Air Services Agreement (ASA) and signed a Memorandum of Understanding (MoU) to increase flight frequency and develop skilled manpower resources. According to the renewed agreement, both countries can now operate 28 flights per week. Earlier, the agreement between the two countries was that they could operate only 14 flights per week.
Meanwhile, Nepal is also likely to review Air Services Agreement (ASA) with India to scrap existing restrictions on seat allocations. It is hoped that the change in the ASA will allow Nepali airlines to operate unlimited number of flights to various Indian cities.As per the existing ASA between the two South Asian neighbours, each is restricted to only 6,000 seats per week. The limit on the number of seats has impeded Nepali Airlines' efforts to operate flights to Indian cities.
After the 1990s open air policy, Nepali private airlines have also started spreading their wings. Private airliners are requesting the government to allow them to fly to various Indian cities with unrestricted number of seats.
Saturday, January 17, 2009
Finance Minister vows to rein in price rise
Finance Minister Dr Baburam Bhattarai today vowed to intervene in the market anytime if the prices don't come down soon.
"The government will intervene in the market anytime, if prices don't come down," he said adding that even after international prices have come down, prices in the domestic market had not come down.
The fuel price has been lowered four times since October 25 but transport fares have not come down, a factor which is pushing market prices higher, said Dr Bhattarai blaming the transport entrepreneurs' syndicate. He also suspected that some of the traders were making money at the people's expense.
The central bank has targetted 7.5 per cent inflation but it is at 14.1 per cent, double the target and threatening the government for its ineffectiveness in controlling the price hike.
"The government has also been not able to spend more on development projects due to delay in budget presentation by two months and procedural hassles," the finance minister admitted. "The government will speed up its development activities from this month."
Revenue collection has been considerably satisfactory, as it is 35.4 per cent in the first four months and 33.1 per cent in the fifth month of the current fiscal year. Since six months of this fiscal year have already passed, the government has only six months left to prove itself.
Apart from this, the treasury is positive. "The government has Rs 13.22 billion surplus," he informed. But that's because there has been no development expenses in first six months.
The Nepal Development Forum (NDF) meeting - considered important for attracting foreign aid - is planned for March or early April, he said adding that the government was preparing a vision paper for the meet.
This government has been blamed for not creating any jobs. But, Dr Bhattarai is hopeful that the Self-Employment Programme will help create jobs in the country. "Last week's cabinet meeting has given the nod to this programme's regulation," the rebel-turned-minister said, adding that any Nepali youth can now avail of Rs 2 lakh without collateral. "The government will give guarantee to the banks," he said.
The government has also prepared to open cooperative shops -- popularly known as cheap-priced shops -- for the poor in VDCs but there are doubt that without a smooth supply system people won't benefit from such shops even though the finance minister has promised to make the supply system smooth.
Apart from various development activities waiting to get a kick-start, he also said the much-touted Investment Board regulation and other procedural hurdles are being cleared for attracting more investment and the government is moving forward in the right direction in fulfilling the people's aspirations. Dr Bhattarai has returned one of his official vehicles so as not put burden the national coffers.
First VDIS declarer
KATHMANDU: Bikram Sharma has declared Rs 2 million assets and paid Rs 0.2 million under the Voluntary Disclosure of Income Source (VDIS) scheme on December 2. He is the first to have declared his property and pay tax under the scheme. Till January 13, people declared Rs 58.71 million and paid 10 percent of the declared amount to the government.
"The government will intervene in the market anytime, if prices don't come down," he said adding that even after international prices have come down, prices in the domestic market had not come down.
The fuel price has been lowered four times since October 25 but transport fares have not come down, a factor which is pushing market prices higher, said Dr Bhattarai blaming the transport entrepreneurs' syndicate. He also suspected that some of the traders were making money at the people's expense.
The central bank has targetted 7.5 per cent inflation but it is at 14.1 per cent, double the target and threatening the government for its ineffectiveness in controlling the price hike.
"The government has also been not able to spend more on development projects due to delay in budget presentation by two months and procedural hassles," the finance minister admitted. "The government will speed up its development activities from this month."
Revenue collection has been considerably satisfactory, as it is 35.4 per cent in the first four months and 33.1 per cent in the fifth month of the current fiscal year. Since six months of this fiscal year have already passed, the government has only six months left to prove itself.
Apart from this, the treasury is positive. "The government has Rs 13.22 billion surplus," he informed. But that's because there has been no development expenses in first six months.
The Nepal Development Forum (NDF) meeting - considered important for attracting foreign aid - is planned for March or early April, he said adding that the government was preparing a vision paper for the meet.
This government has been blamed for not creating any jobs. But, Dr Bhattarai is hopeful that the Self-Employment Programme will help create jobs in the country. "Last week's cabinet meeting has given the nod to this programme's regulation," the rebel-turned-minister said, adding that any Nepali youth can now avail of Rs 2 lakh without collateral. "The government will give guarantee to the banks," he said.
The government has also prepared to open cooperative shops -- popularly known as cheap-priced shops -- for the poor in VDCs but there are doubt that without a smooth supply system people won't benefit from such shops even though the finance minister has promised to make the supply system smooth.
Apart from various development activities waiting to get a kick-start, he also said the much-touted Investment Board regulation and other procedural hurdles are being cleared for attracting more investment and the government is moving forward in the right direction in fulfilling the people's aspirations. Dr Bhattarai has returned one of his official vehicles so as not put burden the national coffers.
First VDIS declarer
KATHMANDU: Bikram Sharma has declared Rs 2 million assets and paid Rs 0.2 million under the Voluntary Disclosure of Income Source (VDIS) scheme on December 2. He is the first to have declared his property and pay tax under the scheme. Till January 13, people declared Rs 58.71 million and paid 10 percent of the declared amount to the government.
Experts provide public sector mantras
The Centre for Empowerment and Development-Nepal (CEMID- Nepal) has brought out its second publication, Sarbajanik Chhetraka Bahuaayamik Pakchhyaharu (Multidimentional aspects of the Public Sector).The volume covers a wide range of comtemporary issues -- economic and social -- in 28 articles penned by experts having long academic and professional experience. Dr Champak Pokharel has reviewed the much-discussed Three Year Interim Plan whereas Dr Chiranjibi Nepal has analysed the Public-Private Partnership in Economic Development where he writes that economic growth without social justice is inhuman, but social justice without economic growth is impossible.Tula Raj Basyal has analysed the White Paper on Economy and Prof Dr Gopal Prasad Pokharel gives the reader an insight of New Nepal's economic diplomacy.
Bimal Wagle, a senior bureaucrat, has delved into Economic Liberalisation and Financial Sector Reforms in Nepal.
At a time when everyone is pondering whther the global financial crisis will hit Nepal or not, Dr Govind Bahadur Thapa takes a serious look at the global crisis and its possible impact on Nepal and prescribes solutions as well. The articles on Foreign Aid and challenges therein by Madhav Prasad Ghimire, Revenue Mobilisation and its challenges and possibilities by Balgovind Bista, Advantages and Disadvantages of Foreign Employment by Sthaneshwor Devkota, Local Government and Performance-based Funding in Nepal by Krishna Babu Joshi and State Restructuring by Dr Surendra KC are some interesting and academic reads in the book that provokes debate.
BOOK REVIEW
Book: Sarbajanik Chhetraka Bahuaayamik Pakchhyaharu (Multidimensional aspects of the Public Sector)
Publisher: CEMID-Nepal
Price: Rs 335
Pages: 346
Outsourcing labour a compulsion: Minister Bhatta
At an interaction at Reporters' Club here today, Minister for Labour and Transport Management Lekh Raj Bhatta said that sending workers abroad for employment was a compulsion as employment opportunities in the country are not sufficient created in the country. Data reveals that 656 Nepalis leave for various destinations daily in search of greener pastures due to lack of job opportunities back home.
"Foreign employment may be an alternative but not long term solution as the development of the country depends on the creation of more jobs at home," he said adding that in such a situation the young generation is compelled to go abroad as migrant workers.
He pointed out that manpower companies should be mindful of the financial and physical security of the workers they send abroad. "News of deaths of Nepali workers has been regular in recent days," he said adding that the manpower companies and embassies should be more responsible. "There are 518 Nepali women in Tihar jail of India due to fraudulent manpower agencies," he said.
Bhatta also critised the Nepali embassies abroad. "Though some embassies are performing well, others are reluctant to resolve Nepali migrant workers' woes," he added.
The minister said the problem could be solved if Labour Attaches were appointed in the embassies. But even after the cabinet go-ahead two weeks ago to appoint Labour Attaches in embassies in Qatar, Saudi Arab, Malaysia and Dubai where there is high concentration of Nepali migrant labourers, the attaches are yet to posted there, it could not be implemented. "The ministry will send all four Labour Attaches within two weeks," he promised.
Nepali labourers find Gulf countries more attractive but due to global financial crisis some of the big contractors in Gulf countries have stopped taking new employees. Israel is yet another lucrative but troubled destination.
Apart from that, Japan is being seen as a new lucrative destination for Nepali migrant workers. "The government had given the responsibility of sending Nepali workers to Japan to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI)." he said. On December 3, 2003, FNCCI and Japan International Training Cooperation Organisation (JITCO) had signed a preliminary agreement on sending Nepali migrant workers to Japan. But even after almost five years, not a single Nepali worker has gone to Japan. "We have restarted the process to send the Nepali trainees to Japan," Bhatta added.
Japan has started taking foreign workers in agriculture, construction, food processing, fishery, electronics and garments sectors from 14 countries. Bangladesh is the 14th country it has entered into an agreement on migrant workers.
On the occasion, some Japanese employers said that they were willing to take Nepali workers if the government permits. According to available data, between 1992 to 2003 -- a 12-year duration -- 2,202 Nepalis have gone to Japan as trainee worker.
"Foreign employment may be an alternative but not long term solution as the development of the country depends on the creation of more jobs at home," he said adding that in such a situation the young generation is compelled to go abroad as migrant workers.
He pointed out that manpower companies should be mindful of the financial and physical security of the workers they send abroad. "News of deaths of Nepali workers has been regular in recent days," he said adding that the manpower companies and embassies should be more responsible. "There are 518 Nepali women in Tihar jail of India due to fraudulent manpower agencies," he said.
Bhatta also critised the Nepali embassies abroad. "Though some embassies are performing well, others are reluctant to resolve Nepali migrant workers' woes," he added.
The minister said the problem could be solved if Labour Attaches were appointed in the embassies. But even after the cabinet go-ahead two weeks ago to appoint Labour Attaches in embassies in Qatar, Saudi Arab, Malaysia and Dubai where there is high concentration of Nepali migrant labourers, the attaches are yet to posted there, it could not be implemented. "The ministry will send all four Labour Attaches within two weeks," he promised.
Nepali labourers find Gulf countries more attractive but due to global financial crisis some of the big contractors in Gulf countries have stopped taking new employees. Israel is yet another lucrative but troubled destination.
Apart from that, Japan is being seen as a new lucrative destination for Nepali migrant workers. "The government had given the responsibility of sending Nepali workers to Japan to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI)." he said. On December 3, 2003, FNCCI and Japan International Training Cooperation Organisation (JITCO) had signed a preliminary agreement on sending Nepali migrant workers to Japan. But even after almost five years, not a single Nepali worker has gone to Japan. "We have restarted the process to send the Nepali trainees to Japan," Bhatta added.
Japan has started taking foreign workers in agriculture, construction, food processing, fishery, electronics and garments sectors from 14 countries. Bangladesh is the 14th country it has entered into an agreement on migrant workers.
On the occasion, some Japanese employers said that they were willing to take Nepali workers if the government permits. According to available data, between 1992 to 2003 -- a 12-year duration -- 2,202 Nepalis have gone to Japan as trainee worker.
Friday, January 16, 2009
Chhetri takes charge of central bank
The central bank has got a full-fledged governor after a hiatus of almost two years. Deependra Bahadur Chhetri took charge here today as the new governor of Nepal Rastra Bank (NRB). He is the 14th head of the regulatory authority of the monetary market.Talking to scribes after assuming charge, Chhetri promised action against wilful defaulters. He also opined that cooperatives should come under Nepal Rastra Bank and financial institutions should be encouraged to go to rural areas.
"Cooperatives should be brought under the scanner of NRB as they are into monetary transactions," he said adding that it was Nepal Rastra Bank's responsibility to monitor and supervise the monetary market. "There has long been a demand for a second tier institution," added the governor, who started his career on Asad 1, 2034 BS from the same institution that he is heading now.
He also vowed to take note of the price hike. The monetary policy has targetted inflation at 7.5 per cent. Though economists claim that Nepal's inflation is imported, India's inflation has in these past two months gone down by half. However, according to the first five months' data, inflation is at 14.1 per cent -- double the target -- and does not seem to be going down.
The present liberal monetary policy is blamed for the price hike. Chhetri, however, put the blame for the price hike on the supply system. Opining that tightening the monetary policy could hurt the private sector, he added that the central bank was in no mood to review the present monetary policy. "A tight monetary policy at the cost of the private sector will not be suitable," he said.
The number of financial institutions is increasing in a small economy like Nepal. Due to increasing number, on one hand there is unhealthy competition while on the other the central bank is accused of lack of monitoring system and manpower. Some economists and bankers even want the central bank to stop issuing licence to new financial institutions. "The central bank will not stop issuing licence to new financial institutions," he said adding that competition will help financial institutions to go to uncharted areas in the rural sector.
"The central bank will provide facilities and encourage financial institutions to go to rural areas," said Chhetri, who was a trade union leader during the 1990s movement. Admitting that the central bank faces several challenges -- national and global -- he said that there may be weaknesses on part of NRB also. "After soul-searching, we'll go after the wilful defaulters," promised the trade unionist-turned governor, who was also sacked by the central bank in 1994 for anti-government publications. He was the founder-president of the employees Union of Nepal Rastra Bank in 1990.
He worked in National Trading Ltd and Agriculture Development Bank before being appointed a member of National Planning Commission (NPC), the government think-tank, last year. He retired from the central bank as executive director of the currency management division two years ago.
The cabinet yesterday named Chhetri the 14th governor as CIAA had indicted former governor Bijaya Nath Bhattarai two years ago. Since then, Krishna Bahadur Manandhar had been heading the central bank as acting governor
Thursday, January 15, 2009
Foreign aid dependency increases sans effectiveness
Assuming that the population of Nepal is 25 million, each Nepali individual has a foreign debt of Rs 8,500 as the total foreign debt stood at Rs 2.16 trillion, according to data till July 16, 2007.
Though Nepal started taking foreign aid since 1950, its effectivessness has always been under scanner due to its untransparent and unaccountable conditions, said the experts at a programme Foreign Aid and its effectiveness in Nepal organised by ActionAid Nepal in association with South Asia Watch on Trade, Economics and Environment (SAWTEE) and Society of Economic Journalists (Sejon) today. "Despite complaints of foreign aid effectiveness and utilisation, Nepal needs foreign aid as it needs more resources with increasing economic activities," Krishna Gyawali, co-ordinator of Foreign Aid Division under Finance Ministry, said. "Is the aid making us dependent on them or not could be another debate," he added. "But psychological dependence is more alarming."
"The same question has been repeatedly raised because of lack of standards and long-term vision on foreign aid that contributes a substantial portion of development expenditure, averaging about 55 per cent per year," he said adding that the government has been, thus, reviewing the Foreign Aid Policy that was formulated long ago. "Before the Nepal Development Forum meet -- scheduled for March end -- we might have a reviewed Foreign Aid Policy with clear long-term vision and standard priority set-up," Gyawali informed.
"In the absence of such criterion, there has been confusion in priority setting," he said, adding that aid fatigue is also not good. Apart from the new policy and donor mapping, aid monitoring and evaluation is also key. "Aid should be for development financing not for the development itself," Gyawali said.
Agreed Dr Posh Raj Pandey, chairman of SAWTEE. "Foreign aid is needed to enhance development capacity," he said adding that countries need foreign aid to bridge gap between savings and investment and foreign currency. "But in macro-level, there is no resource gap due to inward flow of remittance and foreign currency situation is also comfortable," Pandey said.
Conditionalities are much-talked issue related to foreign aid. But Dr Pandey opined that conditions are helpful in curtailing unproductive expenses. "Periodic evaluation might put pressure on donors and they would be more accountable, he opined.
Dr Dhurbesh Chandra Regmi, programme director of SAWTEE welcomed the participants in the programme where Paras Kharel and Kapil Gautam presented the findings of perception survey that was launched during the programme.
Though Nepal started taking foreign aid since 1950, its effectivessness has always been under scanner due to its untransparent and unaccountable conditions, said the experts at a programme Foreign Aid and its effectiveness in Nepal organised by ActionAid Nepal in association with South Asia Watch on Trade, Economics and Environment (SAWTEE) and Society of Economic Journalists (Sejon) today. "Despite complaints of foreign aid effectiveness and utilisation, Nepal needs foreign aid as it needs more resources with increasing economic activities," Krishna Gyawali, co-ordinator of Foreign Aid Division under Finance Ministry, said. "Is the aid making us dependent on them or not could be another debate," he added. "But psychological dependence is more alarming."
"The same question has been repeatedly raised because of lack of standards and long-term vision on foreign aid that contributes a substantial portion of development expenditure, averaging about 55 per cent per year," he said adding that the government has been, thus, reviewing the Foreign Aid Policy that was formulated long ago. "Before the Nepal Development Forum meet -- scheduled for March end -- we might have a reviewed Foreign Aid Policy with clear long-term vision and standard priority set-up," Gyawali informed.
"In the absence of such criterion, there has been confusion in priority setting," he said, adding that aid fatigue is also not good. Apart from the new policy and donor mapping, aid monitoring and evaluation is also key. "Aid should be for development financing not for the development itself," Gyawali said.
Agreed Dr Posh Raj Pandey, chairman of SAWTEE. "Foreign aid is needed to enhance development capacity," he said adding that countries need foreign aid to bridge gap between savings and investment and foreign currency. "But in macro-level, there is no resource gap due to inward flow of remittance and foreign currency situation is also comfortable," Pandey said.
Conditionalities are much-talked issue related to foreign aid. But Dr Pandey opined that conditions are helpful in curtailing unproductive expenses. "Periodic evaluation might put pressure on donors and they would be more accountable, he opined.
Dr Dhurbesh Chandra Regmi, programme director of SAWTEE welcomed the participants in the programme where Paras Kharel and Kapil Gautam presented the findings of perception survey that was launched during the programme.
NB Group's trading dominates Nepse floor
The NB Group's institutions witnessed heavy selling today. Nepal Bangladesh Bank, Nepal Credit and Commerce (NCC) Bank and National Hydropower saw their 5,560-unit, 5,250-unit and 5,910-unit shares transactions at the sole secondary market today.
The number of shares traded of these three institutions is the largest at the Nepse today. They were traded at Rs 1,731,440; Rs 1,598,380 and Rs 767,430. "The confirmation of new governor's appointment might have sent cold wave to the NB Group that has been in news for all the wrong reasons," said one broker in condition of anonymity.
Meanwhile, the secondary market closed 8.59 points lower today to 651.22 points, The sensitive index -- barometer of A group companies -- ended 3.98 points below to 168.91 points from its previous close on Tuesday. Similarly, the float index was also down by 1.18 points over its previous close and ended trade at 63.55 points.
The biggest loser today is development banks group that lost 28.87 points to 910.5 points, followed by finance companies group that lost 19.09 points to 897.41 points. The banking group also shed 16.22 points to 611.17 points. However, Insurance companies group and others group gained. The others group gained 11.74 points to close at 628.57 points.
The number of shares traded of these three institutions is the largest at the Nepse today. They were traded at Rs 1,731,440; Rs 1,598,380 and Rs 767,430. "The confirmation of new governor's appointment might have sent cold wave to the NB Group that has been in news for all the wrong reasons," said one broker in condition of anonymity.
Meanwhile, the secondary market closed 8.59 points lower today to 651.22 points, The sensitive index -- barometer of A group companies -- ended 3.98 points below to 168.91 points from its previous close on Tuesday. Similarly, the float index was also down by 1.18 points over its previous close and ended trade at 63.55 points.
The biggest loser today is development banks group that lost 28.87 points to 910.5 points, followed by finance companies group that lost 19.09 points to 897.41 points. The banking group also shed 16.22 points to 611.17 points. However, Insurance companies group and others group gained. The others group gained 11.74 points to close at 628.57 points.
Wednesday, January 14, 2009
70,000 jobs go down the drain
At least 70,000 jobs in industries countrywide were lost in the recent months.Though there is no agency in Nepal that has authentic records of unemployment in the country, data compiled by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Industrial District Management Ltd (IDM) reveal that the number could be higher.
Labour dispute over minimum wages, demands of permanent appointment, frequent strikes, increasing hours of load-sheddding and the extortion racket by mushrooming criminal gangs and extremist outfits spreading terror in the Tarai have cost the country heavily, cutting the employment level by the day.
Data from IDM reveals that the industrial districts (IDs) have lost almost 20 per cent of the jobs. "A total of above 14,000 are employed at present in all the 10 industrial districts," said IDM general manager Giriraj Bhandari.
There are 10 Industrial Districts that are operational in Nepal -- Balaju, Patan, Bhaktapur, Hetauda, Dharan, Nepalgunj, Pokhara, Butwal, Birendranagar and Rajbiraj. The 11th one in Dhankuta is not operational.
In all the 10 IDs in operation - except the one not operational in Dhankuta -- 78 industries have closed, 394 are still operational and 80 are under construction. More than 3,000 people have lost their jobs in these IDs.
The people have more expectations from the IDs. "The people of Sunawal want the Industrial District to be expanded to their village development committee (VDC)," Bhandari said adding that IDM has been in recent days working hard to create a peaceful environment in industrial districts.
Aside from problems caused by the labour unions, increased load-shedding has added to the woes in recent weeks. The Industrial Districts have no alternative arrangement except the feeder. "Hetauda, Butwal and Dharan Industrial Districts need separate feeders to ensure smooth supply of power," he added.
The five-day power outage schedule that Nepal Electricity Authority (NEA) published earlier hampered day-to-day operations in Balaju Industrial District. "Thus, we requested NEA to change the schedule," Bhandari said adding that there will still be a two-day weekly power cut in BID but not two consecutive days.
"We have also planned to instal a separate feeder in Nepalgunj Industrial District," he added. "Lately, IDM has been trying to ensure security in all the Industrial Districts and create a good environment for smooth operation of industries and ensure no more jobs cuts.
"Organised industrial development started in Nepal with the establishment of Balaju Industrial District in 1960 with US assistance. However, no new Industrial district was established after 1988, according to IDM.
Labour dispute over minimum wages, demands of permanent appointment, frequent strikes, increasing hours of load-sheddding and the extortion racket by mushrooming criminal gangs and extremist outfits spreading terror in the Tarai have cost the country heavily, cutting the employment level by the day.
Data from IDM reveals that the industrial districts (IDs) have lost almost 20 per cent of the jobs. "A total of above 14,000 are employed at present in all the 10 industrial districts," said IDM general manager Giriraj Bhandari.
There are 10 Industrial Districts that are operational in Nepal -- Balaju, Patan, Bhaktapur, Hetauda, Dharan, Nepalgunj, Pokhara, Butwal, Birendranagar and Rajbiraj. The 11th one in Dhankuta is not operational.
In all the 10 IDs in operation - except the one not operational in Dhankuta -- 78 industries have closed, 394 are still operational and 80 are under construction. More than 3,000 people have lost their jobs in these IDs.
The people have more expectations from the IDs. "The people of Sunawal want the Industrial District to be expanded to their village development committee (VDC)," Bhandari said adding that IDM has been in recent days working hard to create a peaceful environment in industrial districts.
Aside from problems caused by the labour unions, increased load-shedding has added to the woes in recent weeks. The Industrial Districts have no alternative arrangement except the feeder. "Hetauda, Butwal and Dharan Industrial Districts need separate feeders to ensure smooth supply of power," he added.
The five-day power outage schedule that Nepal Electricity Authority (NEA) published earlier hampered day-to-day operations in Balaju Industrial District. "Thus, we requested NEA to change the schedule," Bhandari said adding that there will still be a two-day weekly power cut in BID but not two consecutive days.
"We have also planned to instal a separate feeder in Nepalgunj Industrial District," he added. "Lately, IDM has been trying to ensure security in all the Industrial Districts and create a good environment for smooth operation of industries and ensure no more jobs cuts.
"Organised industrial development started in Nepal with the establishment of Balaju Industrial District in 1960 with US assistance. However, no new Industrial district was established after 1988, according to IDM.
Tuesday, January 13, 2009
Sebon assures investors
The Securities Board of Nepal (Sebon) has tried to assure investors by stating that the present plunge in Nepse is not 'unnatural'. Nepse has been showing bearish trend since last six consecutive months but the newly appointed chairman of the Sebon Dr Surbir Poudyal opined that its a 'price correction'.
Though he could not clearly spell out the regulatory authority's strategy on how to cope up with the present downward trend -- that might hit financial sector pushing the country's economy to a worse situation -- he said that the Sebon is working on various plans like CDS draft and Mutual Fund Act.
Poudyal was of the view that the shares of various financial institutions are still over-priced. "Unlike earlier, the supply has gone up," he said adding that the Initial Public Offerings (IPOs) worth billions have been flooded the Nepse, the sole secondary market in the country pulling the Nepse down. The Nepse had a record hit of 1175 points before it started falling -- especially after the Maoist-led government's budget in September.
The investors are under tremendous fear that government might start inquiry on their income source after Inland Revenue Department has asked the Nepse to provide a list of large investors. But the new chairman tried to assure investors that "there will be no such inquiry".
Shares to flood
KATHMANDU: The Sebon has approved shares worth billions. The IPOs, rights shares, debentures and bonus shares add up to Rs 8 billion. The IPOs in pipeline are Rs 370 million IPO of Sunrise Bank, Rs 300 million Citizens' Bank's IPO and Prime Commercial Bank's IPO each, Rs 260 million IPO of Vibor Bikas Bank and Rs 230 million IPO of much-awaited Chilime Hydropower.
The IPOs adds up to over Rs 2.2 billion, whereas Sebon has also approved rights shares worth Rs 3.76 billion, debenture worth Rs 500 million and bonus shares worth Rs 1.17 billion. The Chilime Hydropower -- constructed with the indigenous technology -- has also been long planning to raise Rs 240 million through an equity offering. Chilime had already floated shares -- that are traded at the Nepse floor -- to its employee.
Chilime model is no doubt an example how Nepalis themselves can construct hydro power plant by raising money from the domestic market, if the government has a clear vision of developing the country.
Apart from that Agriculture Development Bank is also planning its IPO amounting to Rs 960 million, the largest ever IPO in the history as the NT's Rs 150 billion worth shares were floated to public under privatisation Act and was not an IPO.
Though he could not clearly spell out the regulatory authority's strategy on how to cope up with the present downward trend -- that might hit financial sector pushing the country's economy to a worse situation -- he said that the Sebon is working on various plans like CDS draft and Mutual Fund Act.
Poudyal was of the view that the shares of various financial institutions are still over-priced. "Unlike earlier, the supply has gone up," he said adding that the Initial Public Offerings (IPOs) worth billions have been flooded the Nepse, the sole secondary market in the country pulling the Nepse down. The Nepse had a record hit of 1175 points before it started falling -- especially after the Maoist-led government's budget in September.
The investors are under tremendous fear that government might start inquiry on their income source after Inland Revenue Department has asked the Nepse to provide a list of large investors. But the new chairman tried to assure investors that "there will be no such inquiry".
Shares to flood
KATHMANDU: The Sebon has approved shares worth billions. The IPOs, rights shares, debentures and bonus shares add up to Rs 8 billion. The IPOs in pipeline are Rs 370 million IPO of Sunrise Bank, Rs 300 million Citizens' Bank's IPO and Prime Commercial Bank's IPO each, Rs 260 million IPO of Vibor Bikas Bank and Rs 230 million IPO of much-awaited Chilime Hydropower.
The IPOs adds up to over Rs 2.2 billion, whereas Sebon has also approved rights shares worth Rs 3.76 billion, debenture worth Rs 500 million and bonus shares worth Rs 1.17 billion. The Chilime Hydropower -- constructed with the indigenous technology -- has also been long planning to raise Rs 240 million through an equity offering. Chilime had already floated shares -- that are traded at the Nepse floor -- to its employee.
Chilime model is no doubt an example how Nepalis themselves can construct hydro power plant by raising money from the domestic market, if the government has a clear vision of developing the country.
Apart from that Agriculture Development Bank is also planning its IPO amounting to Rs 960 million, the largest ever IPO in the history as the NT's Rs 150 billion worth shares were floated to public under privatisation Act and was not an IPO.
Monday, January 12, 2009
ADBL to appoint issue manager
Agriculture Development Bank Ltd (ADBL) will appoint an issue manager soon. "To streamline the process of floating shares, ADBL will appoint an issue manager soon," said Janak Shah, newly appointed chief executive officer of the bank.
The bank is floating the largest ever Initial Public Offering (IPO) - in the financial sector - amounting to Rs 960 million. The sum is 30 per cent of its paid up capital. The shares will be floated at a face value of Rs 100 per unit. For employees, it has separated Rs shares worth 162.5 million, that is 5.08 per cent. ADBL, established 41 years ago, has a total of over 3,95,000 clients.
Earlier, the newly opened commercial bank Global Bank floated shares worth Rs 300 million, the largest IPO till date. Bank of Asia Nepal and Citizen International Bank will also float shares worth Rs 300 million each -- 30 per cent of their paid up capital -- respectively, according to the central bank's regulation.
According to Shah, around 67,000 small farmers have contacted various branches of the bank for loan-waiver. The government -- in its budget for the fiscal year 2008-09 -- had announced complete loan waiver upto Rs 30,000 and interest waiver on loan upto Rs 1,00,000 for small farmers hit by the conflict. However, some small farmers have complained that they did not not get the waiver facility.
The bank is floating the largest ever Initial Public Offering (IPO) - in the financial sector - amounting to Rs 960 million. The sum is 30 per cent of its paid up capital. The shares will be floated at a face value of Rs 100 per unit. For employees, it has separated Rs shares worth 162.5 million, that is 5.08 per cent. ADBL, established 41 years ago, has a total of over 3,95,000 clients.
Earlier, the newly opened commercial bank Global Bank floated shares worth Rs 300 million, the largest IPO till date. Bank of Asia Nepal and Citizen International Bank will also float shares worth Rs 300 million each -- 30 per cent of their paid up capital -- respectively, according to the central bank's regulation.
According to Shah, around 67,000 small farmers have contacted various branches of the bank for loan-waiver. The government -- in its budget for the fiscal year 2008-09 -- had announced complete loan waiver upto Rs 30,000 and interest waiver on loan upto Rs 1,00,000 for small farmers hit by the conflict. However, some small farmers have complained that they did not not get the waiver facility.
NOC subsidy plan on government table
Nepal Oil Corporation (NOC) has forwarded to the government a draft manual for subsidy to targetted groups and students in cooking gas and kerosene.
"NOC -- with the aim of granting relief in petroleum products to lower strata of society and students -- has prepared the draft on subsidy and forwarded it to the government," said NOC managing director Digamber Jha.
However, gas dealers are complaining that the draft is ineffective and un-scientific. "The draft lacks a scientific mechanism," Gyaneshwor Aryal, president of Gas Dealers' Federation said adding that there should have been throrough homework before such a relief proposal.
Devi Neupane, president of the authentic employees' union of NOC said the subsidy should be provided only to students of public schools and government schools. "The government need not provide subsidy to students of private boarding schools as they are well-off," he added.
According to the draft, targetted groups to get subsidy are people staying on rent, students, and their families. "All residents in rural and urban areas, colleges, universities and those who live in rented houses along with certificates and necessary documents and students with identity cards are liable to get subsidy in gas and kerosene," said the draft. A single family will get Rs 100 subsidy per cylinder per month while those using kerosene will get Rs 50 per month subsidy. However, according to the draft, people getting subsidy in kerosene will not get it in LPG and vice-versa.
NOC will be the authorised body to issue consumer cards and the respective Metropolitan City, Sub metro, Municipality and Village Development Committee will distribute their respective certified consumers the cards. Meanwhile, after certification from the landlord people living on rent will be able to get subsidy while students of colleges and universities will be eligible with official recognition from their respective institutions. However, students with their own houses will not eligible for subsidy.
"The draft can only regulate the business but cannot control illegal activities," Aryal said adding that a committee should be formed with the participation of consumers, students, dealers and buyers to distribute the cards.
According to the draft manual, students with consumer cards will get Rs 100 subsidy on the purchase of one cylinder per month. Gas dealers will have to certify the consumer with detailed information about the gas cylinder in the card, which will work as the medium for distribution of subsidy to college and university students.
Aryal argued that the card system would not be effective as fake student cards cannot be regulated. "Special holograms should be used," he suggested. "Similarly, people getting subsidy should be classified according to their income level both in the rural and urban areas."
"NOC -- with the aim of granting relief in petroleum products to lower strata of society and students -- has prepared the draft on subsidy and forwarded it to the government," said NOC managing director Digamber Jha.
However, gas dealers are complaining that the draft is ineffective and un-scientific. "The draft lacks a scientific mechanism," Gyaneshwor Aryal, president of Gas Dealers' Federation said adding that there should have been throrough homework before such a relief proposal.
Devi Neupane, president of the authentic employees' union of NOC said the subsidy should be provided only to students of public schools and government schools. "The government need not provide subsidy to students of private boarding schools as they are well-off," he added.
According to the draft, targetted groups to get subsidy are people staying on rent, students, and their families. "All residents in rural and urban areas, colleges, universities and those who live in rented houses along with certificates and necessary documents and students with identity cards are liable to get subsidy in gas and kerosene," said the draft. A single family will get Rs 100 subsidy per cylinder per month while those using kerosene will get Rs 50 per month subsidy. However, according to the draft, people getting subsidy in kerosene will not get it in LPG and vice-versa.
NOC will be the authorised body to issue consumer cards and the respective Metropolitan City, Sub metro, Municipality and Village Development Committee will distribute their respective certified consumers the cards. Meanwhile, after certification from the landlord people living on rent will be able to get subsidy while students of colleges and universities will be eligible with official recognition from their respective institutions. However, students with their own houses will not eligible for subsidy.
"The draft can only regulate the business but cannot control illegal activities," Aryal said adding that a committee should be formed with the participation of consumers, students, dealers and buyers to distribute the cards.
According to the draft manual, students with consumer cards will get Rs 100 subsidy on the purchase of one cylinder per month. Gas dealers will have to certify the consumer with detailed information about the gas cylinder in the card, which will work as the medium for distribution of subsidy to college and university students.
Aryal argued that the card system would not be effective as fake student cards cannot be regulated. "Special holograms should be used," he suggested. "Similarly, people getting subsidy should be classified according to their income level both in the rural and urban areas."
Sunday, January 11, 2009
Chinese investors urge finance minister for level playing field
The investors from the land of Mao, Nepal's ruling Maoist party's ideal, today urged the government to give them a level playing field. They also complained to one of the chief Maoist ideologues of various hurdles like customs duty, regular strikes, soaring transportation fares, visa renewal problems and unequal treatment in doing business in Nepal.
"Chinese goods have to pay more tariff than Indian ones," they complained at a round-table meeting organised to attract more investment from China by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here today.
Nepal's trade with its northern neighbour China is less in comparison to its Southern neighbour India. "Nepal is southward tilted, and that needs to be balanced," Finance Minister Dr Baburam Bhattarai said adding that a country needed to be economically independent in order to be politically sovereign.
"Nepal needs to take advantage of highly growing economies like India and China, and act as a vibrant bridge between them and not just as a historically defined buffer zone," he added.
Chinese investment started pouring into Nepal after Nepal-China Non-governmental Cooperation Forum's establishment in 1996. According to latest statistics, Nepal has Rs 3.74 billion Chinese investment. But in recent years, it is on a declining trend due to the investment-unfriendly climate.
Dr Bhattarai assured the Chinese investors of creating an investment-friendly climate. "We are bringing an Act to ban strikes in industries soon," he promised, adding that the present hurdles were historical ones like those faced by China in the 1940s.
According to the Department of Industry, there were 165 industries with Chinese investment -- till April 12, 2008 -- that provided employment to 11,000 people especially in service sector (hotels and restaurants), construction, hydropower, food processing, readymade garments and pashmina, hospital and health services and herbal industries. The share of Chinese investment in total Foreign Direct Investment (FDI) stands at 12.54 per cent.
Qiu Guohong, Chinese ambassador to Nepal, speaking on the occasion, said that China attaches great importance to its relationship with Nepal. "China fully supports the government's development priorities but at the same time wants to see a conducive environment for investment," the envoy said adding that only economic development would help fulfil the aspirations of the people. China, a communist country has metaporphised itself as an economic powerhouse with the help of liberal economic policy that their Nepali counterparts lack.
Nepal exported Rs 736.45 million worth goods to China (including Tibetan Autonomous Region of China and Lhasa) during 2007-08 and imported goods worth Rs 22.25 billion that clearly shows the increasing trade deficit between the two neighbours.
"To bridge the trade gap between two centuries-old neighbours, Nepal should lure investment in areas like construction, mining and connectivity," suggested Suraj Vaidya, senior vice-president of FNCCI.
FNCCI preident Kush Kumar Joshi said that government policy was favourable for FDI but investment atmosphere was not favourable.
"Chinese goods have to pay more tariff than Indian ones," they complained at a round-table meeting organised to attract more investment from China by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here today.
Nepal's trade with its northern neighbour China is less in comparison to its Southern neighbour India. "Nepal is southward tilted, and that needs to be balanced," Finance Minister Dr Baburam Bhattarai said adding that a country needed to be economically independent in order to be politically sovereign.
"Nepal needs to take advantage of highly growing economies like India and China, and act as a vibrant bridge between them and not just as a historically defined buffer zone," he added.
Chinese investment started pouring into Nepal after Nepal-China Non-governmental Cooperation Forum's establishment in 1996. According to latest statistics, Nepal has Rs 3.74 billion Chinese investment. But in recent years, it is on a declining trend due to the investment-unfriendly climate.
Dr Bhattarai assured the Chinese investors of creating an investment-friendly climate. "We are bringing an Act to ban strikes in industries soon," he promised, adding that the present hurdles were historical ones like those faced by China in the 1940s.
According to the Department of Industry, there were 165 industries with Chinese investment -- till April 12, 2008 -- that provided employment to 11,000 people especially in service sector (hotels and restaurants), construction, hydropower, food processing, readymade garments and pashmina, hospital and health services and herbal industries. The share of Chinese investment in total Foreign Direct Investment (FDI) stands at 12.54 per cent.
Qiu Guohong, Chinese ambassador to Nepal, speaking on the occasion, said that China attaches great importance to its relationship with Nepal. "China fully supports the government's development priorities but at the same time wants to see a conducive environment for investment," the envoy said adding that only economic development would help fulfil the aspirations of the people. China, a communist country has metaporphised itself as an economic powerhouse with the help of liberal economic policy that their Nepali counterparts lack.
Nepal exported Rs 736.45 million worth goods to China (including Tibetan Autonomous Region of China and Lhasa) during 2007-08 and imported goods worth Rs 22.25 billion that clearly shows the increasing trade deficit between the two neighbours.
"To bridge the trade gap between two centuries-old neighbours, Nepal should lure investment in areas like construction, mining and connectivity," suggested Suraj Vaidya, senior vice-president of FNCCI.
FNCCI preident Kush Kumar Joshi said that government policy was favourable for FDI but investment atmosphere was not favourable.
Saturday, January 10, 2009
NOC to set up labs to check adulteration
Nepal Oil Corporation (NOC) -- the sole distributor of petroleum products -- is planning to establish well-equipped laboratories soon in Birgunj and at its head office in Kathmandu to check the quality of petroleum products.
"In recent days, consumers -- especially bikers and auto-owners -- have been complaining of low-quality petroleum products that have damaged their vehicles," NOC managing director Digamber Jha said during its 39th anniversary. He added the establishment of well-equipped labs was a top priority. "NOC will set up two labs soon," Jha said.
The increasing adulteration has forced the oil monopoly to think of setting up labs. Due to prolonged power outage, the demand for petroleum products, especially diesel, has risen by 50 to 60 per cent this winter and adulterators are making hay due to the lack of quality control.
To check the adulteration, NOC recently made kerosene and diesel prices equal. "And to meet the rising demand it is planning to bring petroleum products from Barauni and Mughalsarai of India," Jha said.
NOC employees and Nepal Petroleum Dealers' Association (NPDA) alike lauded the NOC decision to make kerosene and dielel prices equal. "There was an adulteration scam of over Rs 700 million," alleged NPDA president Saroj Pandey. After kerosene and dieles prices were equalised, over the last two months the demand for kerosene dropped dramatically. The oil mafia was raking in tidy profits by mixing the earlier lower priced kerosene in diesel and passing off the mixture as diesel.
"There is around Rs 80 billion transaction of petroleum products in the country. But still there is no scientific pricing mechanism," Pandey said. "When crude price in the international market goes down, NOC should also downscale the price, and when it goes up NOC should also upscale it," he said adding that the only solution was an automatic pricing mechanism. However, there is no scientific pricing mechanism yet.
But NOC employees' union was of the view that it should not be only supply oriented. "Rather, NOC should also have its own pumps to ensure smooth and quality supply in case the private sector disrupts supply due to any reason," said NOC employees' union president Devi Neupane.
Apart from diesel, kerosene and petrol, NOC also supplies cooking gas. NOC is planning to permit the private sector to establish gas industries at the places where there is high demand. Neupane urged NOC not to get involved in gas supply as it was a losing proposition.
Around 2,500 dealers are associated with NOC and some 1,200 tankers are currently in use for supply.
"In recent days, consumers -- especially bikers and auto-owners -- have been complaining of low-quality petroleum products that have damaged their vehicles," NOC managing director Digamber Jha said during its 39th anniversary. He added the establishment of well-equipped labs was a top priority. "NOC will set up two labs soon," Jha said.
The increasing adulteration has forced the oil monopoly to think of setting up labs. Due to prolonged power outage, the demand for petroleum products, especially diesel, has risen by 50 to 60 per cent this winter and adulterators are making hay due to the lack of quality control.
To check the adulteration, NOC recently made kerosene and diesel prices equal. "And to meet the rising demand it is planning to bring petroleum products from Barauni and Mughalsarai of India," Jha said.
NOC employees and Nepal Petroleum Dealers' Association (NPDA) alike lauded the NOC decision to make kerosene and dielel prices equal. "There was an adulteration scam of over Rs 700 million," alleged NPDA president Saroj Pandey. After kerosene and dieles prices were equalised, over the last two months the demand for kerosene dropped dramatically. The oil mafia was raking in tidy profits by mixing the earlier lower priced kerosene in diesel and passing off the mixture as diesel.
"There is around Rs 80 billion transaction of petroleum products in the country. But still there is no scientific pricing mechanism," Pandey said. "When crude price in the international market goes down, NOC should also downscale the price, and when it goes up NOC should also upscale it," he said adding that the only solution was an automatic pricing mechanism. However, there is no scientific pricing mechanism yet.
But NOC employees' union was of the view that it should not be only supply oriented. "Rather, NOC should also have its own pumps to ensure smooth and quality supply in case the private sector disrupts supply due to any reason," said NOC employees' union president Devi Neupane.
Apart from diesel, kerosene and petrol, NOC also supplies cooking gas. NOC is planning to permit the private sector to establish gas industries at the places where there is high demand. Neupane urged NOC not to get involved in gas supply as it was a losing proposition.
Around 2,500 dealers are associated with NOC and some 1,200 tankers are currently in use for supply.
Wednesday, January 7, 2009
Government fails to control price hike
The government has failed to control the price hike. The price of rice -- the staple food -- and sugar do not seem to be coming down as consumers have to pay more for rice and rice-related products as well as and sugar and sugar-related products.
"In the first five months of this fiscal year, the price of rice and rice-related products have gone up almost by a double to 21.8 per cent against 12.5 per cent in the same period last year," said a report of Nepal Rastra Bank (NRB), the central authority.
Kathmandu valley is still the most expensive place to live in as region-wise it has posted 16.2 per cent price hike -- against the fourth month's 16.8 per cent -- followed by the mountainous region with 13.6 per cent and the Tarai with 13.1 per cent.
The price of food and beverages rose by 17.2 per cent while non-food and service sectors witnessed 10.8 per cent hike, pushing the year-on-year inflation to 14.1 per cent -- down by a paltry 0.4 per cent -- against this fiscal year's first fourth month's 14.5 per cent, NRB said.
According to the central bank, the core inflation has also posted more than triple growth -- at 13.1 per cent. In the same period the last fiscal year, core inflation was at 4.7 per cent.
During the period, the price of food and beverages increased by more than double to 17.2 per cent from 7.5 per cent in the same period last year. Non-food and service sectors' price also increased by more than double to 10.8 per cent from 4.1 per cent in the first five months of the last fiscal year.
While the price of sugar and sugar-related products increased by more than double, with prices shooting up by 35.9 per cent from 17 percent in the same period the last fiscal.
Inflation in Nepal is directly related to India where it has come down but it could not be tamed here. The central bank has spelled out a targetted inflation at 7.5 per cent in the Monetary Policy.
"Salary and wages, however, have increased during the period -- by 14.6 per cent against eight per cent in the same period the last fiscal due to the Rs 2,000 hike given in the government employees' salaries," said the report.
Sugar Mill lockout
PARASI: The irony is sugar price is going up and the sugar mill is padlocked. Locals on Wednesday padlocked the Sunwal-based Lumbini Sugar Mill in Nawalparasi for an indefinite period to protest non-implementation of the past 15-point agreement including an agreement on garbage management. It is reported that the mill, which is considered the largest sugar mill in Nepal, crushes 10,000 quintals of sugarcane daily and has suffered a huge loss due to the lockout. -- RSS
"In the first five months of this fiscal year, the price of rice and rice-related products have gone up almost by a double to 21.8 per cent against 12.5 per cent in the same period last year," said a report of Nepal Rastra Bank (NRB), the central authority.
Kathmandu valley is still the most expensive place to live in as region-wise it has posted 16.2 per cent price hike -- against the fourth month's 16.8 per cent -- followed by the mountainous region with 13.6 per cent and the Tarai with 13.1 per cent.
The price of food and beverages rose by 17.2 per cent while non-food and service sectors witnessed 10.8 per cent hike, pushing the year-on-year inflation to 14.1 per cent -- down by a paltry 0.4 per cent -- against this fiscal year's first fourth month's 14.5 per cent, NRB said.
According to the central bank, the core inflation has also posted more than triple growth -- at 13.1 per cent. In the same period the last fiscal year, core inflation was at 4.7 per cent.
During the period, the price of food and beverages increased by more than double to 17.2 per cent from 7.5 per cent in the same period last year. Non-food and service sectors' price also increased by more than double to 10.8 per cent from 4.1 per cent in the first five months of the last fiscal year.
While the price of sugar and sugar-related products increased by more than double, with prices shooting up by 35.9 per cent from 17 percent in the same period the last fiscal.
Inflation in Nepal is directly related to India where it has come down but it could not be tamed here. The central bank has spelled out a targetted inflation at 7.5 per cent in the Monetary Policy.
"Salary and wages, however, have increased during the period -- by 14.6 per cent against eight per cent in the same period the last fiscal due to the Rs 2,000 hike given in the government employees' salaries," said the report.
Sugar Mill lockout
PARASI: The irony is sugar price is going up and the sugar mill is padlocked. Locals on Wednesday padlocked the Sunwal-based Lumbini Sugar Mill in Nawalparasi for an indefinite period to protest non-implementation of the past 15-point agreement including an agreement on garbage management. It is reported that the mill, which is considered the largest sugar mill in Nepal, crushes 10,000 quintals of sugarcane daily and has suffered a huge loss due to the lockout. -- RSS
Monday, January 5, 2009
NRB invites for NBL CEO
Nepal Rastra Bank (NRB) invited applications for the post of Chief Executive Officer (CEO) of Nepal Bank Ltd (NBL). “The central bank has invited Nepali consultants to submit their Expression of Interest (EoI) for the post of CEO,” said a high-ranking official at NRB.
According to the Terms of Reference (ToR), the CEO requires to re-establish control and overseeing of NBL — plagued by Non-Performing Loan (NPL) — for sound banking practices.
“The CEO will review the financial and operational conditions of NBL, maintain profitable operation and recommend viable alternatives for cost-effective operations apart from preparing a Management Plan that establishes goals and objectives for the management of NBL and also prepare Key Performance Indicators (KPIs),” he said adding that the CEO’s tenure would be initially a year with the option of extension as per requirement.
Earlier, on January 15 of 2007, NRB had called for technical and financial proposal to contractout the NBL management to a Nepali professional team that would include CEO, chief credit officer, treasury manager and chief operating officer. However, at that time the application did not meet the crieteria of World Bank guidelines for selection and employment of consultants.
This time, however, the central bank has called only for a CEO. “However, the management team will comprise up to three other management experts from different fields. The CEO shall recommend to NRB a maximum of other three management team members within three months of his appointment,” the official said adding that the other management team members would be appointed by NRB on the recommendation of the CEO.
Interested Nepali individuals having qualifications, eligibility and adherence to the terms and conditions can apply by January 20.
The government has received credit for an amount equivalent to $16 million and DFID grant for an amount equivalent to $10 million towards the cost of the Financial Sector Technical Assistance Project and intends to apply part of the grant for consultant service that includes management services for the continuation of NBL’s restructuring.The CEO should have working experience in any commercial bank in the upper levels of management, according to the ToR. “The CEO will have to prepare a revised Management Plan for review and approval of the NRB within 30 days of taking up the management and submit Key Performance Indicators (KPIs), Single Borrower Limit Strategy and Action Plan to bring the credit of all customers crossing single obligor limit and Loan Recovery Strategy - and will report directly to NRB,” the official added.
The consultant will this time also be selected in accordance with the World Bank’s ‘Guidelines for Selection and Employment of Consultant by the World Bank Borrowers, Revised-October 2006’.
The troubled commercial bank has been since last one-and-a-half years managed by a three-member team coordinated by Dr Binod Atreya.
NRB last month called back two members — Laxmiprapanna Niraula and Numnath Poudel — of the three-member coordination team that it had sent to manage NBL.
According to the Terms of Reference (ToR), the CEO requires to re-establish control and overseeing of NBL — plagued by Non-Performing Loan (NPL) — for sound banking practices.
“The CEO will review the financial and operational conditions of NBL, maintain profitable operation and recommend viable alternatives for cost-effective operations apart from preparing a Management Plan that establishes goals and objectives for the management of NBL and also prepare Key Performance Indicators (KPIs),” he said adding that the CEO’s tenure would be initially a year with the option of extension as per requirement.
Earlier, on January 15 of 2007, NRB had called for technical and financial proposal to contractout the NBL management to a Nepali professional team that would include CEO, chief credit officer, treasury manager and chief operating officer. However, at that time the application did not meet the crieteria of World Bank guidelines for selection and employment of consultants.
This time, however, the central bank has called only for a CEO. “However, the management team will comprise up to three other management experts from different fields. The CEO shall recommend to NRB a maximum of other three management team members within three months of his appointment,” the official said adding that the other management team members would be appointed by NRB on the recommendation of the CEO.
Interested Nepali individuals having qualifications, eligibility and adherence to the terms and conditions can apply by January 20.
The government has received credit for an amount equivalent to $16 million and DFID grant for an amount equivalent to $10 million towards the cost of the Financial Sector Technical Assistance Project and intends to apply part of the grant for consultant service that includes management services for the continuation of NBL’s restructuring.The CEO should have working experience in any commercial bank in the upper levels of management, according to the ToR. “The CEO will have to prepare a revised Management Plan for review and approval of the NRB within 30 days of taking up the management and submit Key Performance Indicators (KPIs), Single Borrower Limit Strategy and Action Plan to bring the credit of all customers crossing single obligor limit and Loan Recovery Strategy - and will report directly to NRB,” the official added.
The consultant will this time also be selected in accordance with the World Bank’s ‘Guidelines for Selection and Employment of Consultant by the World Bank Borrowers, Revised-October 2006’.
The troubled commercial bank has been since last one-and-a-half years managed by a three-member team coordinated by Dr Binod Atreya.
NRB last month called back two members — Laxmiprapanna Niraula and Numnath Poudel — of the three-member coordination team that it had sent to manage NBL.
Sunday, January 4, 2009
Direct NAC flight to Doha soon, Shanghai-Tokyo flight planned
The ailing national flag carrier -- Nepal Airlines Corporation (NAC) -- is planning to replace the present Shanghai-Osaka route with Shanghai-Tokyo route and start direct flights on Kathmand-Doha route.
NAC started flying to Doha via Dubai from January 1. While returning to Kathmandu, NAC flies directly from Doha. "NAC is planning direct flight on the Kathmandu-Doha route also in another three months," Sugat Ratna Kansakar, managing director of NAC, said after returing from the inaugural Kathmandu-Dubai-Doha flight.
Pradip Karki, deputy acting director at NAC, said that at present the Kathmandu-Dubai-Doha route has around 70 per cent of passengers travelling to Doha as it is a major destination of Nepali migrant workers. This extension in the international flight has facilitated Nepali workers traveling to Gulf countries.
"Nepalis in Doha were very happy that they can now take NAC flights," Kansakar added.
Karki said, "Only 30 per cent of NAC's passengers on Kathmandu-Dubai-Doha route travel to Dubai." According to him, the international flight extension to Doha was actually planned for September after flights to Shangai and Osaka were officially closed in October. "This is being preoned to utilise spare time," he said.
Kansakar said that the Ministry of Tourism -- at the NAC's request -- has requested Japan to permit NAC to fly on the Shangai -Tokyo route instead of Shanghai-Osaka route. He added that if things went as planned, NAC would start flying on the Shanghai-Tokyo route from October-November.
"In the long term, NAC is planning direct flights to Tokyo," the newly appointed MD said, adding, "However, Naruhito Airport is one of the busiest ones. If NAC gets a time slot, it'll fly directly to Tokyo.
"NAC is planning expansion but the global recession has hit air travel also. According to Karki, though worldwide tourism faced a three per cent fall in 2008 due to global recession, NAC was lucky enough to be unaffected till date.
According to NAC, there are three flights in a week on the Kathmandu-Dubai-Doha-Kathmandu route. On January 1, a total of 171 passengers went on the inaugural flight from Kathmandu, while the number of passenger coming back from from Doha was 168 on January 2.
Karki also said that the number of passengers traveling to Doha has increased in recent days. Till 15 days ago, the total number was around 40 to 50 per day but it has now increased to 80-90."If the Gulf countries start cutting labour force due to recession, the number of passengers might also decrease," Karki said adding that in that case, NAC would have to work out new strategies to cope up with the situation. He apprehended that as these are actually labour-based flights as there is a huge number of Nepalis working in the Gulf countries, the scenario might change after three-four months due to global recession and the number of passengers returning Nepal may increase.
NAC started flying to Doha via Dubai from January 1. While returning to Kathmandu, NAC flies directly from Doha. "NAC is planning direct flight on the Kathmandu-Doha route also in another three months," Sugat Ratna Kansakar, managing director of NAC, said after returing from the inaugural Kathmandu-Dubai-Doha flight.
Pradip Karki, deputy acting director at NAC, said that at present the Kathmandu-Dubai-Doha route has around 70 per cent of passengers travelling to Doha as it is a major destination of Nepali migrant workers. This extension in the international flight has facilitated Nepali workers traveling to Gulf countries.
"Nepalis in Doha were very happy that they can now take NAC flights," Kansakar added.
Karki said, "Only 30 per cent of NAC's passengers on Kathmandu-Dubai-Doha route travel to Dubai." According to him, the international flight extension to Doha was actually planned for September after flights to Shangai and Osaka were officially closed in October. "This is being preoned to utilise spare time," he said.
Kansakar said that the Ministry of Tourism -- at the NAC's request -- has requested Japan to permit NAC to fly on the Shangai -Tokyo route instead of Shanghai-Osaka route. He added that if things went as planned, NAC would start flying on the Shanghai-Tokyo route from October-November.
"In the long term, NAC is planning direct flights to Tokyo," the newly appointed MD said, adding, "However, Naruhito Airport is one of the busiest ones. If NAC gets a time slot, it'll fly directly to Tokyo.
"NAC is planning expansion but the global recession has hit air travel also. According to Karki, though worldwide tourism faced a three per cent fall in 2008 due to global recession, NAC was lucky enough to be unaffected till date.
According to NAC, there are three flights in a week on the Kathmandu-Dubai-Doha-Kathmandu route. On January 1, a total of 171 passengers went on the inaugural flight from Kathmandu, while the number of passenger coming back from from Doha was 168 on January 2.
Karki also said that the number of passengers traveling to Doha has increased in recent days. Till 15 days ago, the total number was around 40 to 50 per day but it has now increased to 80-90."If the Gulf countries start cutting labour force due to recession, the number of passengers might also decrease," Karki said adding that in that case, NAC would have to work out new strategies to cope up with the situation. He apprehended that as these are actually labour-based flights as there is a huge number of Nepalis working in the Gulf countries, the scenario might change after three-four months due to global recession and the number of passengers returning Nepal may increase.
Friday, January 2, 2009
APPON calls for level playing field
Nepali pharmaceuticals producers have urged neighbouring countries for reciprocal treatment to their products. They also complained of lack of effective monitoring of sub-standard products flooding the market.
"If other countries do not let our products enter, then our government should levy the highest tariff -- under the World Trade Orgsanisation (WTO) norms -- on the import of drugs that Nepali manufacturers produce sufficiently in the country," said Pradeep Man Vaidya, immediate past president (IPP) of the Association of Pharmaceuticals Producers of Nepal (APPON) at the association's 15th annual general meeting (AGM) here today.
"The market is flooded with unregistered and sub-standard drugs due to ineffective monitoring of the Department of Drugs Management," he said adding that on one hand Nepali companies are hurt while on the other people are compelled to buy fake products - especially in Tarai - a problem that often has fatal effects.
Every drug sold in the country needs to be registered and certified by the Department of Drugs Management but still the market is flooded with unregistered and sub-standard drugs. "The department lacks manpower and adequate infrascture for effective monitoring," Pradeep Jung Pandey, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and former president of APPON said. "The government also needs to bring a new policy to boost the confidence of pharma producers," he said adding that the present Act was brought one-and-a-half decades ago. "The present Act - brought in 2051 BS - is also a major hurdle in developing the pharma industry," Pandey said.
If the government brings a supportive policy, Nepal can be self-dependent by 2013, Vaidya said, adding, "It will not only produce sufficient pharma products but also start exporting them."
There are currently over 40 pharmaceutical industries that fulfil 35 per cent of the total market demand in Nepal. "In 1970, the pharma industry came into existence but it is only after 1990 that the sector started flourishing," informed said APPON president Umesh Lal Shrestha, who has been re-elected for another term.
Without economic development the country cannot develop, he said adding that like other industries the Rs 7 billion pharma industry is also hurt by long hours of power-outage, fuel shortage, worsening labour problems, frequent bandhs, unstable politics and policy level hurdles."Over a dozen companies are WHO/GMP certified and more are in the process of getting certified which would guarantee the quality of domestic products," Shrestha added. "Apart from that, Nepali drugs are cheaper as well."
"Nepali drugs are of international quality," affirmed health secretary Dr Dirgha Singh Bam adding that unhealthy and unethical competition has marred the Nepali pharma industry. "It is the government's responsibility to protect the national industry and give it priority," he said.
Nepal Medical Association (NMA) president Dr Chop Lal Bhusal supported Dr Bam's stance and urged the government to protect the national industry.
Minister for Industries, Astalaxmi Shakya, assured APPON of the government's support.
New Team
KATHMANDU: The 15th AGM of Association of Pharmaceutical Producers of Nepal (APPON) elected a new executive committee under president Umesh Lal Shrestha. Mahesh Gorkhali is vice-president, whereas Shankar Ghimire is general secretary and Rajendra Kabara is treasurer. Including Immediate Past President Pradeep Man Vaidya the 11-member new executive committee took oath of the office on Friday after the AGM. The APPON was established 19 years ago.
"If other countries do not let our products enter, then our government should levy the highest tariff -- under the World Trade Orgsanisation (WTO) norms -- on the import of drugs that Nepali manufacturers produce sufficiently in the country," said Pradeep Man Vaidya, immediate past president (IPP) of the Association of Pharmaceuticals Producers of Nepal (APPON) at the association's 15th annual general meeting (AGM) here today.
"The market is flooded with unregistered and sub-standard drugs due to ineffective monitoring of the Department of Drugs Management," he said adding that on one hand Nepali companies are hurt while on the other people are compelled to buy fake products - especially in Tarai - a problem that often has fatal effects.
Every drug sold in the country needs to be registered and certified by the Department of Drugs Management but still the market is flooded with unregistered and sub-standard drugs. "The department lacks manpower and adequate infrascture for effective monitoring," Pradeep Jung Pandey, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and former president of APPON said. "The government also needs to bring a new policy to boost the confidence of pharma producers," he said adding that the present Act was brought one-and-a-half decades ago. "The present Act - brought in 2051 BS - is also a major hurdle in developing the pharma industry," Pandey said.
If the government brings a supportive policy, Nepal can be self-dependent by 2013, Vaidya said, adding, "It will not only produce sufficient pharma products but also start exporting them."
There are currently over 40 pharmaceutical industries that fulfil 35 per cent of the total market demand in Nepal. "In 1970, the pharma industry came into existence but it is only after 1990 that the sector started flourishing," informed said APPON president Umesh Lal Shrestha, who has been re-elected for another term.
Without economic development the country cannot develop, he said adding that like other industries the Rs 7 billion pharma industry is also hurt by long hours of power-outage, fuel shortage, worsening labour problems, frequent bandhs, unstable politics and policy level hurdles."Over a dozen companies are WHO/GMP certified and more are in the process of getting certified which would guarantee the quality of domestic products," Shrestha added. "Apart from that, Nepali drugs are cheaper as well."
"Nepali drugs are of international quality," affirmed health secretary Dr Dirgha Singh Bam adding that unhealthy and unethical competition has marred the Nepali pharma industry. "It is the government's responsibility to protect the national industry and give it priority," he said.
Nepal Medical Association (NMA) president Dr Chop Lal Bhusal supported Dr Bam's stance and urged the government to protect the national industry.
Minister for Industries, Astalaxmi Shakya, assured APPON of the government's support.
New Team
KATHMANDU: The 15th AGM of Association of Pharmaceutical Producers of Nepal (APPON) elected a new executive committee under president Umesh Lal Shrestha. Mahesh Gorkhali is vice-president, whereas Shankar Ghimire is general secretary and Rajendra Kabara is treasurer. Including Immediate Past President Pradeep Man Vaidya the 11-member new executive committee took oath of the office on Friday after the AGM. The APPON was established 19 years ago.
SEZ Act in offing: Trade Minister Shakya
Carpet Industry on death-bed: Thakur
Trade Minister Astalaxmi Shakya said that the Special Economic Zone (SEZ) Act will come anytime this week.
"To promote a helathy industrial environment, the government is bringing the SEZ Act immediately," she said addressing an interaction on 'Carpet Industry: Present Problems and Challenges', here in the valley today.
"Not only the carpet industry, every second other industry in the country is facing problems; be it trade unions, power outage or frequent bandhs," Shakya said adding that the ministry is working hard to revive industries and bring a new Industry Policy to address the sector's grievenaces and boost entrepreneurs' confidence.
"Once a lucrative sector and one of the largest foreign currency-earners, the carpet industry is today on its death-bed," said Constituent Assembly member and industrialist Kabindra Nath Thakur.
Presenting a paper, carpet expert Surendra Dhakal said, "The industry that once employed 0.4 million workers has been forced to downsize workforce to 0.15 million." He pointed out that the country exported 3.326 million sq-metres of carpet in 1993-94. This year, it exported 1.136 sq-metre -- a whopping drop of 65.8 per cent.
"The propaganda in Germany by some vested interest groups about child labour -- to destroy the Nepali carpet industry -- and the competition with cheaper Indian and Chinese carpets have hurt the sector hard," he said adding that industrial and labour unrest and government apathy have also pushed it to this sorry state.
Nepali carpet is completely dependent on US and European markets and the global economic crisis will definitely hit it. Among them, Germany -- the only country with which Nepal has no trade imbalance due to carpet export -- is the biggest market for Nepali carpet.
"The government has also failed in economic diplomacy," accused Pradeep Jung Pandey, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). "The boost in exports will increase job opportunities and bring social justice," he said, "If not, there will again be conflict." He urged the government to declare an 'Industrial Crisis' to revive national industries.Carpet industry can help reduce rural poverty as it generates mass employment. "To weave one square metre of carpet it takes 12 persons one hour, thus generating more employment directly," Dhakal said adding that indirectly the industry provides employment three times more than direct employment.
"Nepal has to develop backward linkage -- like rearing sheep for wool so as to be independent in the matter of materials for carpet and substitute raw material import -- to get maximum advantage," he suggested. "The government should support the industry that has a proven record of success."
Nepal Chambers of Commerce (NCC) president Surendra Bir Malakar accused the government of being unsupportive and acting like a mute bystander. "The militancy of trade unions and increasing hours of load-shedding have hit industries," he said. He also urged the government to declare 'Industrial Crisis' and bring stimulus packages to revive industries.
However, minister Shakya said that her ministry had to take stock of the situation before it could take such a bold step. "Trade unions will start behaving," she tried to assuage the industrialists. Of late, the industry is also affected by the minimum wage dispute
Trade Minister Astalaxmi Shakya said that the Special Economic Zone (SEZ) Act will come anytime this week.
"To promote a helathy industrial environment, the government is bringing the SEZ Act immediately," she said addressing an interaction on 'Carpet Industry: Present Problems and Challenges', here in the valley today.
"Not only the carpet industry, every second other industry in the country is facing problems; be it trade unions, power outage or frequent bandhs," Shakya said adding that the ministry is working hard to revive industries and bring a new Industry Policy to address the sector's grievenaces and boost entrepreneurs' confidence.
"Once a lucrative sector and one of the largest foreign currency-earners, the carpet industry is today on its death-bed," said Constituent Assembly member and industrialist Kabindra Nath Thakur.
Presenting a paper, carpet expert Surendra Dhakal said, "The industry that once employed 0.4 million workers has been forced to downsize workforce to 0.15 million." He pointed out that the country exported 3.326 million sq-metres of carpet in 1993-94. This year, it exported 1.136 sq-metre -- a whopping drop of 65.8 per cent.
"The propaganda in Germany by some vested interest groups about child labour -- to destroy the Nepali carpet industry -- and the competition with cheaper Indian and Chinese carpets have hurt the sector hard," he said adding that industrial and labour unrest and government apathy have also pushed it to this sorry state.
Nepali carpet is completely dependent on US and European markets and the global economic crisis will definitely hit it. Among them, Germany -- the only country with which Nepal has no trade imbalance due to carpet export -- is the biggest market for Nepali carpet.
"The government has also failed in economic diplomacy," accused Pradeep Jung Pandey, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). "The boost in exports will increase job opportunities and bring social justice," he said, "If not, there will again be conflict." He urged the government to declare an 'Industrial Crisis' to revive national industries.Carpet industry can help reduce rural poverty as it generates mass employment. "To weave one square metre of carpet it takes 12 persons one hour, thus generating more employment directly," Dhakal said adding that indirectly the industry provides employment three times more than direct employment.
"Nepal has to develop backward linkage -- like rearing sheep for wool so as to be independent in the matter of materials for carpet and substitute raw material import -- to get maximum advantage," he suggested. "The government should support the industry that has a proven record of success."
Nepal Chambers of Commerce (NCC) president Surendra Bir Malakar accused the government of being unsupportive and acting like a mute bystander. "The militancy of trade unions and increasing hours of load-shedding have hit industries," he said. He also urged the government to declare 'Industrial Crisis' and bring stimulus packages to revive industries.
However, minister Shakya said that her ministry had to take stock of the situation before it could take such a bold step. "Trade unions will start behaving," she tried to assuage the industrialists. Of late, the industry is also affected by the minimum wage dispute