After a minor scuffle and with the help of security personnel this afternoon some 45 tankers carrying petroleum products set out from the Thankot depot of Nepal Oil Corporation (NOC) for Kathmandu, according to NOC. "Though it is less than the normal daily supply of 65 tankers, at least this will help smoothen the supply from tomorrow," it added. Yesterday, only 28 tankers brought the petroleum products.
Six protesting tanker owners were also arrested under the Essential Services Act after they tried to stop the tankers. The Home Ministry has directed the Chief District Officers to provide security to the tankers.
Meanwhile, consumer rights groups supported the government's move to invoke the Essential Services Act to bring in the petroleum products.
Nepal Consumers' Forum, National Consumers' Forum and Consumers' Rights Protection Forum (CRPF) have urged the government to strictly implement the Essential Goods Act and Essential Services Act to end all forms of blackmarketing and syndicate system in the essential goods sector.
Kathmandu valley, along with other parts of the country, is facing an acute shortage of petrol, diesel and kerosene after the Federation of Nepal Petrol Tanker Entrepreneurs (FNPTE) stopped transporting petroleum products from Sunday. Nepal Petroleum Dealers' Association (NPDA) and Tankers' Drivers Association are supporting the FNPTE.
The Ministry of Commerce and Supplies requested the Home Ministry to invoke the Act to ensure the supply of petroleum products after FNPTE stopped ferrying petro-products.
"The government has taken the right decision," consumer rights activist Ram Chandra Simkhada said adding that they support the move as it is giving relief to the consumers.
Consumer rights groups are against the protesting parties and have urged the government to enforce ESA strictly. "Had the government not invoked ESA, we would have seized the tankers for the benefit of the people," Nepal Consumers' Forum said.
CRPF general secretary Jyoti Baniya said that the strike was a drama to promote carteling and increase commission. "The issue of phasing out 20 years old tankers is not the only reason," he said adding that there was more to what met the eye.
Of the privately-owned 1,200 tankers, at least 200 are more than 20 years old while some are even 30 years old.
Tuesday, March 31, 2009
Price hike set for marathon run
The price of most key food commodities remained high during March but stayed generally stable compared to last month. "The price of mustard oil, soybean oil, musuro (broken lentil), black gram and coarse rice were all within three per cent over February prices," said a report of the World Food Programme (WFP).
Compared to last year, musuro is up by 37 per cent, coarse rice by 16 per cent and soybean oil by 15 per cent. Prices of other key commodities are still inflated by 4 to 12 per cent, according to the report. High prices remain a serious concern as Nepal has not experienced any significant price reprieve since the global price hikes of mid-2008.
The report produced by WFP Nepal in collaboration with the Agri-business Promotion and Marketing Development Directorate, FNCCI and Consumer's Interest Protection Forum also reveals that nearly 40 per cent of hill and mountain markets had insufficient or depleted supply of coarse rice; mountain markets had no maize while only 15 per cent of hill markets had sufficient supply of maize and nationally only 40 per cent of markets had sufficient cooking gas/ kerosene supply.
"A 13-day bandh in the Tarai disrupted markets in Kailali, Banke and Parsa and caused severe supply scarcity and food insecurity in various hill and mountain feeder markets including Ilam, Dadeldhura, Baitadi, Bajhang, Achham, Bajura and Udaypur," it said.
Price hikes in these districts were largely correlated to increased supply constraints. Across Nepal, the combined impact of bandhs, seasonal reductions and other supply constraints resulted in an overall depletion of food stocks -- particularly in the mountains and hills, it said adding bandhs had significant impact on supply, disrupting a number of markets.In addition, government-subsidised rice was reportedly unable to reach the markets of Achham and Bajura and WFP food aid could not be delivered in far north districts like Mugu due to disrupted fuel supply in the Tarai.
Compared to last year, musuro is up by 37 per cent, coarse rice by 16 per cent and soybean oil by 15 per cent. Prices of other key commodities are still inflated by 4 to 12 per cent, according to the report. High prices remain a serious concern as Nepal has not experienced any significant price reprieve since the global price hikes of mid-2008.
The report produced by WFP Nepal in collaboration with the Agri-business Promotion and Marketing Development Directorate, FNCCI and Consumer's Interest Protection Forum also reveals that nearly 40 per cent of hill and mountain markets had insufficient or depleted supply of coarse rice; mountain markets had no maize while only 15 per cent of hill markets had sufficient supply of maize and nationally only 40 per cent of markets had sufficient cooking gas/ kerosene supply.
"A 13-day bandh in the Tarai disrupted markets in Kailali, Banke and Parsa and caused severe supply scarcity and food insecurity in various hill and mountain feeder markets including Ilam, Dadeldhura, Baitadi, Bajhang, Achham, Bajura and Udaypur," it said.
Price hikes in these districts were largely correlated to increased supply constraints. Across Nepal, the combined impact of bandhs, seasonal reductions and other supply constraints resulted in an overall depletion of food stocks -- particularly in the mountains and hills, it said adding bandhs had significant impact on supply, disrupting a number of markets.In addition, government-subsidised rice was reportedly unable to reach the markets of Achham and Bajura and WFP food aid could not be delivered in far north districts like Mugu due to disrupted fuel supply in the Tarai.
ADB slashes growth forecast
Asian Development Bank (ADB) has slashed Nepal's growth forecast to three per cent -- against the government’s seven per cent -- for the year 2009. Contrary to the Central Bank's revised forecast of 11 per cent price hike, ADB looked more optimistic and projected only a 10 per cent price hike.
"If growth accelerates, the inflation will not have much impact," said Paolo Spantigati, senior country specialist at Nepal Resident Mission, while launching the Asian Development Outlook (ADO) 2009 here today. He added that it, however, depended on smooth political transition, prudent macro policies and improved business confidence.
The ADB's flagship annual economic publication -- Asian Development Outlook 2009 (ADO 2009) -- has projected growth at 3.5 per cent and inflation at eight per cent for 2010.
Though the aid flow might tighten due to global recession, the Balance of Payment (BoP) will remain surplus, he said adding ADB will also readjust its assistance -- albeit marginally -- based on performance. "Assistance to Nepal will not be impacted," he said.
"Short-term challenges for Nepal are not as bleak as perceived for the region," Spantigati said adding that improvement in business environment for increased private sector investments, scaling up capital spending on infrastructure and social sectors to support the peace process, employment generation given the burgeoning labour force, repatriation of migrant workers and strenghtening regulation and supervision of financial institutions will, however, remain challenging.
In the long-term, sustaining the poverty reduction gains of the past, addressing the rising inequality in economy, social and human development, addressing structural weakness in the economy and attracting private sector investment for infrastructure development also will be challenging, according to the new report.
South Asia, though not as open to trade as other regional economies, is also expected to lose steam. According to the report, The highest economic growth rate in South Asia in 2009 was in Bangladesh at nine per cent and the lowest in the Maldives at one per cent.
"Rebalancing growth is in developing Asia's interest. A more balanced approach can boost social welfare by using its savings more productively and help reduce global imbalances that factored the current crisis," he said.
Developing Asia's economic growth will slow in 2009 to its most sluggish pace since the 1997-98 Asian financial crisis. The report has forecast that economic growth in developing Asia will slide to just 3.4 per cent in 2009, down from 6.3 per cent last year and 9.5 per cent in 2007.
Many Asian governments have already responded quickly to the crisis with appropriate financial, monetary and fiscal policies and so far the impact on financial stability has been limited, the report added. But it warned that there are significant downside risks to the global outlook, which could further impact the already gloomy regional outlook.
If the global economy experiences a mild recovery next year, the outlook for the region will improve to six per cent in 2010. Deteriorating economic prospects will hinder efforts to reduce poverty. With the slow growth, more than 60 million people in 2009, and close to 100 million people in 2010, will remain trapped in poverty -- living on less than $1.25 a day.
The report said that the region's slowdown underlines the risks of excessive dependence on external demand, and developing Asia must adopt a mix of policies that will bolster demand and use resources more efficiently.
"If growth accelerates, the inflation will not have much impact," said Paolo Spantigati, senior country specialist at Nepal Resident Mission, while launching the Asian Development Outlook (ADO) 2009 here today. He added that it, however, depended on smooth political transition, prudent macro policies and improved business confidence.
The ADB's flagship annual economic publication -- Asian Development Outlook 2009 (ADO 2009) -- has projected growth at 3.5 per cent and inflation at eight per cent for 2010.
Though the aid flow might tighten due to global recession, the Balance of Payment (BoP) will remain surplus, he said adding ADB will also readjust its assistance -- albeit marginally -- based on performance. "Assistance to Nepal will not be impacted," he said.
"Short-term challenges for Nepal are not as bleak as perceived for the region," Spantigati said adding that improvement in business environment for increased private sector investments, scaling up capital spending on infrastructure and social sectors to support the peace process, employment generation given the burgeoning labour force, repatriation of migrant workers and strenghtening regulation and supervision of financial institutions will, however, remain challenging.
In the long-term, sustaining the poverty reduction gains of the past, addressing the rising inequality in economy, social and human development, addressing structural weakness in the economy and attracting private sector investment for infrastructure development also will be challenging, according to the new report.
South Asia, though not as open to trade as other regional economies, is also expected to lose steam. According to the report, The highest economic growth rate in South Asia in 2009 was in Bangladesh at nine per cent and the lowest in the Maldives at one per cent.
"Rebalancing growth is in developing Asia's interest. A more balanced approach can boost social welfare by using its savings more productively and help reduce global imbalances that factored the current crisis," he said.
Developing Asia's economic growth will slow in 2009 to its most sluggish pace since the 1997-98 Asian financial crisis. The report has forecast that economic growth in developing Asia will slide to just 3.4 per cent in 2009, down from 6.3 per cent last year and 9.5 per cent in 2007.
Many Asian governments have already responded quickly to the crisis with appropriate financial, monetary and fiscal policies and so far the impact on financial stability has been limited, the report added. But it warned that there are significant downside risks to the global outlook, which could further impact the already gloomy regional outlook.
If the global economy experiences a mild recovery next year, the outlook for the region will improve to six per cent in 2010. Deteriorating economic prospects will hinder efforts to reduce poverty. With the slow growth, more than 60 million people in 2009, and close to 100 million people in 2010, will remain trapped in poverty -- living on less than $1.25 a day.
The report said that the region's slowdown underlines the risks of excessive dependence on external demand, and developing Asia must adopt a mix of policies that will bolster demand and use resources more efficiently.
Petroleum supply to continue
The Ministry of Commerce and Supplies has made arrangements to ferry in petroleum products from tomorrow.
"We have requested the Home Ministry to invoke the Essential Services Act-2014 to bring in petroleum products as it is a very sensitive issue," Digamber Jha managing director of Nepal Oil Corporation (NOC) said adding that strikes in import, transportation and distribution of petroelum products should be banned.
The Federation of Nepal Petrol Tanker Entrepreneurs (FNPTE) has unilaterally stopped ferrying petroleum products from Sunday. "They have not informed NOC, which is unethical," Jha added. The tanker owners have been protesting NOC's request to replace their old tankers though earlier they had agreed to it.
Currently, some 1,200 private tankers ferry pertroleum products. Some of them are 30 years old, but the owners refuse to phase them out. There are also over 200 tankers that are more than 20 years old. Old and decrepit tankers are prone to leakage and accident. "There is no insurance coverage for such ancient vehicles that each carry 12,000 litres petrol worth Rs 1.5 million," said Jha.
NOC had proposed their phase-wise replacement over 25 years in the first phase and so on. However, some tanker-owners for their own vested interests have taken hostage the country's essential supply system. The association of tanker owners itself is divided over the matter.
"In india, tankers older than 15 years are not allowed to ferry petroleum products," he said adding that NOC is also planning addition measures for the smooth supply of petroleum products. The state oil monopoly that is responsible for supply of petroleum products will add 50 tankers as a long-term solution to ferrying problem as the private sector is not cooperating. "It will make us self-reliant and enable us to wriggle out of the grasp of the tanker syndicate," Jha added.
NOC has also planned to help Nepal Police and Armed Police Force (APF) to buy 25 oil tankers each so that the total number of fallback tankers stands at 100 and lessens the dependence on private tankers. Police and APF will also be encouraged to open new petrol pumps also, according to the supplies ministry.
NOC depots will also be provided better security and security personnel will also be deployed for the safety of the drivers and their helpers ferrying petroleum products.
"We have requested the Home Ministry to invoke the Essential Services Act-2014 to bring in petroleum products as it is a very sensitive issue," Digamber Jha managing director of Nepal Oil Corporation (NOC) said adding that strikes in import, transportation and distribution of petroelum products should be banned.
The Federation of Nepal Petrol Tanker Entrepreneurs (FNPTE) has unilaterally stopped ferrying petroleum products from Sunday. "They have not informed NOC, which is unethical," Jha added. The tanker owners have been protesting NOC's request to replace their old tankers though earlier they had agreed to it.
Currently, some 1,200 private tankers ferry pertroleum products. Some of them are 30 years old, but the owners refuse to phase them out. There are also over 200 tankers that are more than 20 years old. Old and decrepit tankers are prone to leakage and accident. "There is no insurance coverage for such ancient vehicles that each carry 12,000 litres petrol worth Rs 1.5 million," said Jha.
NOC had proposed their phase-wise replacement over 25 years in the first phase and so on. However, some tanker-owners for their own vested interests have taken hostage the country's essential supply system. The association of tanker owners itself is divided over the matter.
"In india, tankers older than 15 years are not allowed to ferry petroleum products," he said adding that NOC is also planning addition measures for the smooth supply of petroleum products. The state oil monopoly that is responsible for supply of petroleum products will add 50 tankers as a long-term solution to ferrying problem as the private sector is not cooperating. "It will make us self-reliant and enable us to wriggle out of the grasp of the tanker syndicate," Jha added.
NOC has also planned to help Nepal Police and Armed Police Force (APF) to buy 25 oil tankers each so that the total number of fallback tankers stands at 100 and lessens the dependence on private tankers. Police and APF will also be encouraged to open new petrol pumps also, according to the supplies ministry.
NOC depots will also be provided better security and security personnel will also be deployed for the safety of the drivers and their helpers ferrying petroleum products.
Monday, March 30, 2009
NRB helpless before price hike
The price hike remains uncontrolled, with the latest level recorded at 13.7 per cent in the first seven months of the current fiscal year, according to Nepal Rastra Bank (NRB), the central authority.
"Driven by both the significant rise in price of food and beverages as well as rise in price of non-food and services group, inflation rose to 13.7 per cent in mid-February from 6.4 per cent in the corresponding period the previous fiscal year," said the central bank's current macroeconomic situation report based on the first seven months' data of 2008-09.
The year-on-year inflation is still above the central bank's revised target of 11 per cent. Unable to crack the whip at the growing price hike, NRB governor Dipendra Bahadur Chhetri has urged the government to intervene in the market.
"In the first seven months of 2008-09, the price rise in Kathmandu valley, the Terai and Hills remained above 13 per cent -- double than that in the correspomnding period the last fiscal," the NRB report said.
However, revenue mobilisation grew by 32.5 per cent to Rs 72.3 billion compared to an increase of 29 per cent in the corresponding period the previous year. "The government's commitment to revenue leakage control, administrative reforms and implementation of Voluntary Declaration of Income Source programme contributed to such impressive growth," said the central bank.
Similarly, the budget also remained at a surplus of Rs 8.8 billion in contrast to a deficit of Rs 6.2 billion in the corresponding period the previous fiscal year. In the first seven months of this fiscal year, the overall Balance of Payment recorded a significant surplus of Rs 25.68 billion in comparison to a surplus of Rs 251.1 million in the corresponding period last fiscal year.
The huge surplus is due to government's failure in spending on development works that will ultimately hit the economy hard.
Remittance has came down by six per cent though the report says that it soared by 58.6 per cent in comparison to a growth of 23.2 per cent in the same period last fiscal year. This fiscal, it had increased by 65.3 per cent in the first six months.
The seventh month for the fiscal year 2008-09 has
* Gross foreign exchange reserves aggregated Rs 251.79 billion -- an upsurge by 18.4 per cent compared to the level as in mid-July 2008.
* On the basis of the US dollar, gross foreign exchange reserves rose by 4.4 per cent to $3.24 billion in mid-February 2009 against an increase of 3.6 per cent in the same period last fiscal year
* Overall exports rose by 19.5 per cent in contrast to a decline by 3.3 per cent in the same period last fiscal year.
* Exports to India rose by 2.3 per cent against a decline by 5.5 per cent in the corresponding period of the previous fiscal year
* Total imports went up by 25.5 per cent as compared to an increase of 18.5 per cent in the corresponding period last fiscal year
* Imports from India increased by 12.5 per cent in comparison to a growth of 24.5 per cent in the corresponding period of last fiscal year.
"Driven by both the significant rise in price of food and beverages as well as rise in price of non-food and services group, inflation rose to 13.7 per cent in mid-February from 6.4 per cent in the corresponding period the previous fiscal year," said the central bank's current macroeconomic situation report based on the first seven months' data of 2008-09.
The year-on-year inflation is still above the central bank's revised target of 11 per cent. Unable to crack the whip at the growing price hike, NRB governor Dipendra Bahadur Chhetri has urged the government to intervene in the market.
"In the first seven months of 2008-09, the price rise in Kathmandu valley, the Terai and Hills remained above 13 per cent -- double than that in the correspomnding period the last fiscal," the NRB report said.
However, revenue mobilisation grew by 32.5 per cent to Rs 72.3 billion compared to an increase of 29 per cent in the corresponding period the previous year. "The government's commitment to revenue leakage control, administrative reforms and implementation of Voluntary Declaration of Income Source programme contributed to such impressive growth," said the central bank.
Similarly, the budget also remained at a surplus of Rs 8.8 billion in contrast to a deficit of Rs 6.2 billion in the corresponding period the previous fiscal year. In the first seven months of this fiscal year, the overall Balance of Payment recorded a significant surplus of Rs 25.68 billion in comparison to a surplus of Rs 251.1 million in the corresponding period last fiscal year.
The huge surplus is due to government's failure in spending on development works that will ultimately hit the economy hard.
Remittance has came down by six per cent though the report says that it soared by 58.6 per cent in comparison to a growth of 23.2 per cent in the same period last fiscal year. This fiscal, it had increased by 65.3 per cent in the first six months.
The seventh month for the fiscal year 2008-09 has
* Gross foreign exchange reserves aggregated Rs 251.79 billion -- an upsurge by 18.4 per cent compared to the level as in mid-July 2008.
* On the basis of the US dollar, gross foreign exchange reserves rose by 4.4 per cent to $3.24 billion in mid-February 2009 against an increase of 3.6 per cent in the same period last fiscal year
* Overall exports rose by 19.5 per cent in contrast to a decline by 3.3 per cent in the same period last fiscal year.
* Exports to India rose by 2.3 per cent against a decline by 5.5 per cent in the corresponding period of the previous fiscal year
* Total imports went up by 25.5 per cent as compared to an increase of 18.5 per cent in the corresponding period last fiscal year
* Imports from India increased by 12.5 per cent in comparison to a growth of 24.5 per cent in the corresponding period of last fiscal year.
Sebon awaits govt nod to Mutual Fund Regulation
The Securities Board of Nepal (Sebon) is waiting for the Finance Ministry's final nod to the Mutual Fund Regulation.
"We have sent the final draft of the regulation to the finance ministry," said Niraj Giri, director at the Securities Board of Nepal, the regulatory authority of the capital market. The ministry has formed a three-man team to finalise the regulation that is expected to lure small investors to the capital market.
Even after more than 16 years of securities trading, Nepal is yet to bring a regulation to better manage and regulate mutual funds.
After getting suggestions from Nepal Rastra Bank (NRB) and Nepal Bankers' Association (NBA), Sebon forwarded the draft regulation for mutual funds to the ministry. "After getting the clearance from the ministry, the regulation will come into effect," Giri added.
Mutual fund -- with a face value of Rs 10 per unit -- is the most suitable investment for a common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
After the regulation, Mutual fund is expected to fuel the capital market -- that is at present slowing down -- as many commercial banks have shown keen interest in it. It will also create institutional investors also -- something that the domestic capital market lacks at present.
Despite an absence of the regulation, NIDC Capital Markets Ltd and Citizen Investment Trust (CIT) had issued NCM mutual fund and CIT unit trust. However, NIDC had a bitter experience in the absence of transparency and any regulation.
The regulation is expected to have all the tools that a transparent and professional fund must have. Besides the sponsors that issue Mutual Funds, the draft envisions an Asset Management Company (AMC) that will manage the fund, a trustee that will act as a watchdog, a custodian and a depositor, all of whom will have to get separate licences from Sebon.
Commercial banks and financial institutions can sponsor the mutual fund and sponsors will appoint AMCthe . According to the draft regulation, mutual funds can also invest 50 per cent of their funds in foreign country.
A mutual fund is a trust that pools the savings of many who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit-holders in proportion to the number of units owned by them.
They can even be traded in the secondary market as well. Apart from that, these funds are convertible and have liquidity. Unlike other institutions, they can be stopped or liquidated or transferred to a new scheme if 75 per cent of the unit-holders complain of mismanagement of the fund or if any foul play is suspected.
"We have sent the final draft of the regulation to the finance ministry," said Niraj Giri, director at the Securities Board of Nepal, the regulatory authority of the capital market. The ministry has formed a three-man team to finalise the regulation that is expected to lure small investors to the capital market.
Even after more than 16 years of securities trading, Nepal is yet to bring a regulation to better manage and regulate mutual funds.
After getting suggestions from Nepal Rastra Bank (NRB) and Nepal Bankers' Association (NBA), Sebon forwarded the draft regulation for mutual funds to the ministry. "After getting the clearance from the ministry, the regulation will come into effect," Giri added.
Mutual fund -- with a face value of Rs 10 per unit -- is the most suitable investment for a common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
After the regulation, Mutual fund is expected to fuel the capital market -- that is at present slowing down -- as many commercial banks have shown keen interest in it. It will also create institutional investors also -- something that the domestic capital market lacks at present.
Despite an absence of the regulation, NIDC Capital Markets Ltd and Citizen Investment Trust (CIT) had issued NCM mutual fund and CIT unit trust. However, NIDC had a bitter experience in the absence of transparency and any regulation.
The regulation is expected to have all the tools that a transparent and professional fund must have. Besides the sponsors that issue Mutual Funds, the draft envisions an Asset Management Company (AMC) that will manage the fund, a trustee that will act as a watchdog, a custodian and a depositor, all of whom will have to get separate licences from Sebon.
Commercial banks and financial institutions can sponsor the mutual fund and sponsors will appoint AMCthe . According to the draft regulation, mutual funds can also invest 50 per cent of their funds in foreign country.
A mutual fund is a trust that pools the savings of many who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit-holders in proportion to the number of units owned by them.
They can even be traded in the secondary market as well. Apart from that, these funds are convertible and have liquidity. Unlike other institutions, they can be stopped or liquidated or transferred to a new scheme if 75 per cent of the unit-holders complain of mismanagement of the fund or if any foul play is suspected.
Sunday, March 29, 2009
Malaysia reduces foreign labour forces
Major Nepali labour destination market Malaysia has shed a huge number jobs of as it is hit due to the financial crisis. More than 26,000 people have lost their jobs in Malaysia so far this year as the economic slowdown forced employers to cut back, reported a news agency Bernama today.
Malaysian Employers' Federation executive director Shamsuddin Bardan told Bernama he expected further job losses in the coming weeks. He said a $16.2 billion stimulus package unveiled earlier this month had not provided immediate incentive for companies to retain their workers. The blue-collar Nepali job-holders are among the worst hit in the East Asian country that had seen a boom in the construction sector in the past years.
The Malaysian government has slashed work permit approvals for foreign workers by almost 70 per cent this year and cancelled work visas of 55,000 Bangladeshi workers after unions said the situation for Malaysians was bleak enough.
In January, the Malaysian government has also banned the hiring of new foreign workers in the manufacturing and services sectors after a report forecast 45,000 Malaysians would lose their jobs in the next few months.
Malaysia is one of Asia's largest importers of labour and has an estimated 2.2 million foreign workers who are the mainstay of the plantation and manufacturing sectors. There are around 4,00,000 Nepalis in Malaysia. The country slipped from second position to fourth as a top Nepali labour destination market. Only 1,509 Nepalis migrant workers reached Malaysia in Falgun. Qatar, as usual ranked first, with 5,177 Nepalis going to work in the Gulf country.
According to the Nepal's Department of Foreign Employment (DoFE), a total of 13,743 Nepalis left for nearly four dozens countries between mid-Feb and mid-March, 296 less than the number the previous month. Around 14,039 people left for foreign employment in Falgun (between mid-January and mid-February).
Nearly 9,758 Nepalis -- 9304 male and 454 female -- got prior permission last month. Likewise, 3,025 migrant workers left Nepal through individual sources. A slight change in the pattern of Nepali migrant workers was seen in DoFE data. The number of Nepalis going to non-preferred destinations increased in Falgun.
Malaysian Employers' Federation executive director Shamsuddin Bardan told Bernama he expected further job losses in the coming weeks. He said a $16.2 billion stimulus package unveiled earlier this month had not provided immediate incentive for companies to retain their workers. The blue-collar Nepali job-holders are among the worst hit in the East Asian country that had seen a boom in the construction sector in the past years.
The Malaysian government has slashed work permit approvals for foreign workers by almost 70 per cent this year and cancelled work visas of 55,000 Bangladeshi workers after unions said the situation for Malaysians was bleak enough.
In January, the Malaysian government has also banned the hiring of new foreign workers in the manufacturing and services sectors after a report forecast 45,000 Malaysians would lose their jobs in the next few months.
Malaysia is one of Asia's largest importers of labour and has an estimated 2.2 million foreign workers who are the mainstay of the plantation and manufacturing sectors. There are around 4,00,000 Nepalis in Malaysia. The country slipped from second position to fourth as a top Nepali labour destination market. Only 1,509 Nepalis migrant workers reached Malaysia in Falgun. Qatar, as usual ranked first, with 5,177 Nepalis going to work in the Gulf country.
According to the Nepal's Department of Foreign Employment (DoFE), a total of 13,743 Nepalis left for nearly four dozens countries between mid-Feb and mid-March, 296 less than the number the previous month. Around 14,039 people left for foreign employment in Falgun (between mid-January and mid-February).
Nearly 9,758 Nepalis -- 9304 male and 454 female -- got prior permission last month. Likewise, 3,025 migrant workers left Nepal through individual sources. A slight change in the pattern of Nepali migrant workers was seen in DoFE data. The number of Nepalis going to non-preferred destinations increased in Falgun.
Saturday, March 28, 2009
Baburam effect pushes market up
The market seems to have reacted to the finance minister Dr Baburam Bhattarai's assurance -- that the government is committed to develop the capital market -- as the sole secondary market, Nepse this week gained 8.71 points to close at 675.30 points from the Sunday's opening of 666.59 points.
The 78-scrip sensitive index -- considered the blue chip shares in the domestic market -- also gained 1.92 points to 177.73 points from Sunday's opening of 175.81 points. Similarly, the float index -- calculated on the basis of real transactions -- gained 0.51 point to 65.54 points from the Sunday's opening of 65.03 points.
However, the total transaction amount for this week decreased by 4.92 per cent to Rs 279.46 million from last week's transaction of Rs 293.93 million. The contribution of Group-A companies also dropped to 69.19 per cent against last week's 73.28 per cent.
The four-day session this week -- due to public holiday on Thursday -- started in green as on Sunday evening, the Nepse surged by 19.91 points to 683.50 points from the morning's opening of 666.50 points. Though, Monday witnessed a loss of 7.19 points to 676.31 points, the Nepse tried to rebound on Tuesday as it gained 1.69 points to 678 points. But the market closed at 675.30 points, shedding 2.70 points on Wednesday.
Of the nine-sub groups' indices, the four sub-groups -- commercial banks, others, hydropower companies and manufacturing -- surged to push the Nepse up. But three sub-groups -- development banks, finance companies and insurance companies -- lost whereas two sub-groups -- hotels and trading at 352.88 points and 213.82 points -- remained unchanged.
The other sub-group gained 17.62 points -- the highest during the week -- to 657.94 points, whereas the manufacturing sub-group -- traded in many weeks -- gained 15.77 points to 419.87 points. The commercial banks group gained 13.35 points to 669.71 points and hydropower group gained 3.24 points to 891.10 points.
However, the development banks sub-group's index plunged by a whopping 39.05 points to 870.76 points and the finance companies sub-group shed 6.94 points to 772.18 points. Similarly, the insurance companies sub-group lost 4.55 points to 656.59 points.
This week's top performers were Siddhartha Development Bank (with Rs 44.06 million), Bank of Kathmandu (with Rs 32.44 million), Standard Chartered Bank Nepal (with Rs 31.68 million), Nepal Development and Employment Promotion Bank (with Rs 16.65 million) and NIC Bank (with Rs 11.72 million).
Over 50.40-million-unit bonus shares of Everest Insurance, NMB Bank, NIC Bank and Himalayan Bank, and 6,00,000-unit of primary shares of Purbanchal Gramin Bikas Bank were listed this week.
The 78-scrip sensitive index -- considered the blue chip shares in the domestic market -- also gained 1.92 points to 177.73 points from Sunday's opening of 175.81 points. Similarly, the float index -- calculated on the basis of real transactions -- gained 0.51 point to 65.54 points from the Sunday's opening of 65.03 points.
However, the total transaction amount for this week decreased by 4.92 per cent to Rs 279.46 million from last week's transaction of Rs 293.93 million. The contribution of Group-A companies also dropped to 69.19 per cent against last week's 73.28 per cent.
The four-day session this week -- due to public holiday on Thursday -- started in green as on Sunday evening, the Nepse surged by 19.91 points to 683.50 points from the morning's opening of 666.50 points. Though, Monday witnessed a loss of 7.19 points to 676.31 points, the Nepse tried to rebound on Tuesday as it gained 1.69 points to 678 points. But the market closed at 675.30 points, shedding 2.70 points on Wednesday.
Of the nine-sub groups' indices, the four sub-groups -- commercial banks, others, hydropower companies and manufacturing -- surged to push the Nepse up. But three sub-groups -- development banks, finance companies and insurance companies -- lost whereas two sub-groups -- hotels and trading at 352.88 points and 213.82 points -- remained unchanged.
The other sub-group gained 17.62 points -- the highest during the week -- to 657.94 points, whereas the manufacturing sub-group -- traded in many weeks -- gained 15.77 points to 419.87 points. The commercial banks group gained 13.35 points to 669.71 points and hydropower group gained 3.24 points to 891.10 points.
However, the development banks sub-group's index plunged by a whopping 39.05 points to 870.76 points and the finance companies sub-group shed 6.94 points to 772.18 points. Similarly, the insurance companies sub-group lost 4.55 points to 656.59 points.
This week's top performers were Siddhartha Development Bank (with Rs 44.06 million), Bank of Kathmandu (with Rs 32.44 million), Standard Chartered Bank Nepal (with Rs 31.68 million), Nepal Development and Employment Promotion Bank (with Rs 16.65 million) and NIC Bank (with Rs 11.72 million).
Over 50.40-million-unit bonus shares of Everest Insurance, NMB Bank, NIC Bank and Himalayan Bank, and 6,00,000-unit of primary shares of Purbanchal Gramin Bikas Bank were listed this week.
Friday, March 27, 2009
FM to wage war on Money laundering
Finance Minister Dr Baburam Bhattarai here today said that money laundering could become a grave threat to the country.
The government will bring strong measures to check money laundering through tax evasion and illegally amassing wealth, he said adding that the regulation against money laundering was on the anvil.
The Financial Information Unit under the central bank investigates complaints of money laundering. "The department will be strengthened to check the crime," Dr Bhattarai said while inaugurating a one-day seminar on money laundering organized by Nepal Rastra Bank here today.
"Though Nepal has an Anti-Money Laundering Act, it lacks regulation", said Nepal Rastra Bank (NRB) governor Dipendra Bahadur Chettri. "Nepal can learn from international experience and its own experience as well on how to combat money laundering," he added.
"Amassing wealth overnight without proper source of income is rampant in Nepal. This phenomenon needs to be checked for the better health of the financial market," Chhetri said.
"Financial institutions are being used in illegal channelling of money," said NRB deputy governor K B Manandhar. Thus, banks can help in the implementation of the Anti-Money Laundering Act," he added.Members of the Constitutent Assembly (CA) and representatives of regulatory authorities took part in the seminar.
The government will bring strong measures to check money laundering through tax evasion and illegally amassing wealth, he said adding that the regulation against money laundering was on the anvil.
The Financial Information Unit under the central bank investigates complaints of money laundering. "The department will be strengthened to check the crime," Dr Bhattarai said while inaugurating a one-day seminar on money laundering organized by Nepal Rastra Bank here today.
"Though Nepal has an Anti-Money Laundering Act, it lacks regulation", said Nepal Rastra Bank (NRB) governor Dipendra Bahadur Chettri. "Nepal can learn from international experience and its own experience as well on how to combat money laundering," he added.
"Amassing wealth overnight without proper source of income is rampant in Nepal. This phenomenon needs to be checked for the better health of the financial market," Chhetri said.
"Financial institutions are being used in illegal channelling of money," said NRB deputy governor K B Manandhar. Thus, banks can help in the implementation of the Anti-Money Laundering Act," he added.Members of the Constitutent Assembly (CA) and representatives of regulatory authorities took part in the seminar.
Monday, March 23, 2009
Nepal slips to 121st from 96th as business destination
Nepal slipped 25 places down to rank 121st on the list of the world's best countries for business, compiled by the Forbes. Nepal lost ground in areas like property rights, innovation, technology, red tapism and personal freedom.
Nepal has moved down from its previous 96th position in Forbes' annual list, which ranks 127 nations on the basis of business climate in a country for entrepreneurs, investors and workers. Denmark topped the chart -- for the consecutive second year -- followed by the US that saw an improvement from last year's fourth position.
"This is not a tally of economies with high gross domestic product (GDP) growth, or low unemployment. The goal is to quantify for entrepreneurs and investors the often-qualified information about dynamic economies and what they would consider desirable conditions for business," said the Forbes.
In the South Asian region, all other countries except Bangladesh slipped from their last year's position. India has slipped 11 places to rank 75th while Sri Lanka slipped to 83rd postion from last year's 67th. Pakistan slipped to 101st spot from last year's 83rd. However, Bangladesh moved up four places to 106th position from last year's 110th.
All the South Asian countires posted a negative performance in personal freedom and increased red tapism. But amazingly, Nepal has done better in protection of investors' interests in comparison to other South Asian countries, where they have dismal performance, according to Forbes.
Canada and Singapore moved up four places each to number three and four respectively. Other countries in the top 10 this year include New Zealand, the UK, Sweden, Australia, Hong Kong and Norway. New Zealand, Australia and Norway joined the top 10 list this year while Finland, Ireland and Switzerland were dislodged from this league.
Big movers included New Zealand (no 5, seven places up), followed by Jordan (no 33, 28 places up), Australia (no 8, five places up), the UAE (no 46, 28 places up) and Malaysia (no 25, 13 places up).
According to the report, Nepal has considerable scope for exploiting its potential in hydropower and tourism, areas of recent foreign investment interest. "Prospects for foreign trade or investment in other sectors will remain poor, however, because of the small size of the economy, its technological backwardness, its remoteness, its landlocked geographic location, civil strife and its susceptibility to natural disaster," said Forbes that gives more points to personal freedom.
Amid financial turmoil this year, Forbes added stock market performance to reflect the extent of disrepair in countries' banking systems as well as investor confidence in a recovery. Intellectual property rights, the promotion of free trade and low inflation, combined with low taxes on income and investment, give a snapshot of the conditions for business in each.
Sliding down the most this year was Ireland (no 14, 12 places down), which even saw plans for a Guinness mega-brewery shelved by parent Diageo as exports slowed. Uruguay (no 66, 22 places down), Armenia (no 94, 31 places down), Paraguay (no 99, 29 places down) and Latvia (no 45, 13 places down) rounded out this year's losers.
Nepal's score-card
Trade Freedom - 113
Monetary Freedom - 43
Property Rights - 92 (down)
Innovation - 120 (down)
Technology - 123 (down)
Red Tapism - 79 (down)
Investor Protection - 48
Corruption - 96
Personal Freedom - 94 (down)
Tax Burden - 71
Market Performance - Not Available
Nepal has moved down from its previous 96th position in Forbes' annual list, which ranks 127 nations on the basis of business climate in a country for entrepreneurs, investors and workers. Denmark topped the chart -- for the consecutive second year -- followed by the US that saw an improvement from last year's fourth position.
"This is not a tally of economies with high gross domestic product (GDP) growth, or low unemployment. The goal is to quantify for entrepreneurs and investors the often-qualified information about dynamic economies and what they would consider desirable conditions for business," said the Forbes.
In the South Asian region, all other countries except Bangladesh slipped from their last year's position. India has slipped 11 places to rank 75th while Sri Lanka slipped to 83rd postion from last year's 67th. Pakistan slipped to 101st spot from last year's 83rd. However, Bangladesh moved up four places to 106th position from last year's 110th.
All the South Asian countires posted a negative performance in personal freedom and increased red tapism. But amazingly, Nepal has done better in protection of investors' interests in comparison to other South Asian countries, where they have dismal performance, according to Forbes.
Canada and Singapore moved up four places each to number three and four respectively. Other countries in the top 10 this year include New Zealand, the UK, Sweden, Australia, Hong Kong and Norway. New Zealand, Australia and Norway joined the top 10 list this year while Finland, Ireland and Switzerland were dislodged from this league.
Big movers included New Zealand (no 5, seven places up), followed by Jordan (no 33, 28 places up), Australia (no 8, five places up), the UAE (no 46, 28 places up) and Malaysia (no 25, 13 places up).
According to the report, Nepal has considerable scope for exploiting its potential in hydropower and tourism, areas of recent foreign investment interest. "Prospects for foreign trade or investment in other sectors will remain poor, however, because of the small size of the economy, its technological backwardness, its remoteness, its landlocked geographic location, civil strife and its susceptibility to natural disaster," said Forbes that gives more points to personal freedom.
Amid financial turmoil this year, Forbes added stock market performance to reflect the extent of disrepair in countries' banking systems as well as investor confidence in a recovery. Intellectual property rights, the promotion of free trade and low inflation, combined with low taxes on income and investment, give a snapshot of the conditions for business in each.
Sliding down the most this year was Ireland (no 14, 12 places down), which even saw plans for a Guinness mega-brewery shelved by parent Diageo as exports slowed. Uruguay (no 66, 22 places down), Armenia (no 94, 31 places down), Paraguay (no 99, 29 places down) and Latvia (no 45, 13 places down) rounded out this year's losers.
Nepal's score-card
Trade Freedom - 113
Monetary Freedom - 43
Property Rights - 92 (down)
Innovation - 120 (down)
Technology - 123 (down)
Red Tapism - 79 (down)
Investor Protection - 48
Corruption - 96
Personal Freedom - 94 (down)
Tax Burden - 71
Market Performance - Not Available
BoK calls back MD, to hire professional CEO
Radhesh Pant, managing director, Bank of Kathmandu (BoK), has been ‘called back’ from the post of managing director by the majority of the Board of Director, yesterday.Sanjay Bahadur Shah, chairman of the Board, dubbed the action as a strategic initiative of the bank while looking into the future. Significantly, it has a bearing on the global economic meltdown and its impact on the nation's banking sector.
"I was taken aback by the move," a surprised Pant said.
A source, close to him, maintained that he was asked to step down last week. "He, however, turned down the proposal. He insisted that he did nothing wrong to warrant such a move," added the source.
In the latest realignment of head honchos, BoK has elevated Sabin Raj Shrestha as officiating Chief Executive Officer (CEO). Earlier, he was Chief Business Officer.
"We have formed a sub-committee to recommend an independent professional CEO at the earliest," added the chairman. He elaborated on the unprecedented move.
A majority of BoK's shares are with the public. Only 42 per cent is with the promoters, making it the only private bank in the country, which has 58 per cent public shareholders.
According to Shah, the Board felt that a professional CEO – instead of a promoter -- would be best primed for chalking out future initiatives and strategies. This will be devoid of "any promoter, investor or owner group bias".
"However, Pant -- who has 10 per cent shares -- will continue as a director in the Board. The decision has nothing to do with his perceived non-performance," added Shah.
Pant served as the MD for seven years in BoK. He turned around the financial institution into a profitable venture. At present, its shares are trading at Rs 1400. It was Rs 200 when he assumed charge.
"In retrospect, he was apt in light of the bank's financial health. He did a commendable job. But, times have changed. Hence, the Board feels an independent professional CEO is better suited for the top job," reasoned Shah.
The 313th Board meeting yesterday took the decision by majority to ‘call back’ Pant from the post of MD and scrapped the post as well . Four directors, two each from promoters and public, upheld the decision. The remaining duo did not oppose the move. There are only seven members -- including Pant -- in the Board at present after one public director resigned.
Sunday, March 22, 2009
SAFE plans cross-border transaction
South Asian Federation of Exchanges (SAFE) is planning to integrate the stock exchanges of South Asian Countries.
Established with the aim of development of human resources, technology and exchange of technologies and knowledge, SAFE also plans to start cross-border listing and trading between member-organisations that is composed of 16 stock and commodity exchanges in South Asia and the UAE.
The eighth annual general meeting of the organisation in Abu Dhabi has elected a new committee under Adanan Afridi of Karachi Stock Exchange Ltd as its president. Fakhruddin Ali Ahmed of Chittagong Stock Exchange, Bangladesh; Joseph Messy of Multi-Commodity Exchange of India and Rashid A L Balushi of Abu Dhabi Securities Exchange of UAE; Mohammed Luqman of National Clearing Company of Pakistan and Shankar Man Singh, managing director of Nepal Stock Exchange are members of the SAFE.
Established in 2000 with the objective of consolidating exchange practices and helping to streamline securities' laws and regulations in the region, SAFE's permanent secretariat is located in Islamabad.
During the AGM, SAFE also launched the Dow Jones SAFE 100 index and the Dow Jones SAFE Pakistan Index. Dow Jones SAFE 100 index has listed companies from Bangladesh, Mauritius, Pakistan, India and Sri Lanka. This is the first time an index has been created to measure the performance of blue-chip companies in five of the eight member-states of SAFE. The Dow Jones SAFE indices are designed to support index-linked investment products such as funds, exchange-traded funds, structured products, futures and options. The index measures the performance of the 50 largest Indian stocks and the 50 largest stocks trading in Bangladesh, Mauritius, Pakistan and Sri Lanka.
Aftab Ahmad Chaudhary, managing director and CEO of Islamabad Stock Exchange and secretary general of SAFE, said the Dow Jones SAFE 100 Index showcases the region as one asset class and can be used as an underlying tool for investment products at the national and international level alike.
Independently, South Asian markets like Nepal and others are considered too small by international fund managers. But when grouped together in an index, and more so in an index with India, the markets could attract more attention.
"South Asia is home to some of the most rapidly evolving financial markets worldwide," saids Dow Jones Indexes president Michael Petronella. "By further developing securities markets and aiming at their regional and international integration, SAFE has been contributing significantly to these developments."
IPO regulation on
KATHMANDU: The Initial Public Offering (IPO) Regulation-2065 has come into effect from Sunday. According to the Securities Board of Nepal (Sebon), the regulation has clearly directed the issue managers to return the money within five days after allotment of the issue. But the time period of allotment has been increased from one-and-half months to two-and-a-half months, depending on the number of applications. Earlier, the allotment duration was a minimum of one month and a maximum of two months. Issue managers had been requesting the Board for extension of allotment time saying that the time was not enough for allotment. The regulation has also told issue managers to have space in the application form for photo. "The regulatory authority might make it mandatory for a photo of the applicant because many fake investors applied for the primary shares," said issue manager. Sebon has already made it mandatory to have a bank account to submit application. This was done to check fake applications.
Established with the aim of development of human resources, technology and exchange of technologies and knowledge, SAFE also plans to start cross-border listing and trading between member-organisations that is composed of 16 stock and commodity exchanges in South Asia and the UAE.
The eighth annual general meeting of the organisation in Abu Dhabi has elected a new committee under Adanan Afridi of Karachi Stock Exchange Ltd as its president. Fakhruddin Ali Ahmed of Chittagong Stock Exchange, Bangladesh; Joseph Messy of Multi-Commodity Exchange of India and Rashid A L Balushi of Abu Dhabi Securities Exchange of UAE; Mohammed Luqman of National Clearing Company of Pakistan and Shankar Man Singh, managing director of Nepal Stock Exchange are members of the SAFE.
Established in 2000 with the objective of consolidating exchange practices and helping to streamline securities' laws and regulations in the region, SAFE's permanent secretariat is located in Islamabad.
During the AGM, SAFE also launched the Dow Jones SAFE 100 index and the Dow Jones SAFE Pakistan Index. Dow Jones SAFE 100 index has listed companies from Bangladesh, Mauritius, Pakistan, India and Sri Lanka. This is the first time an index has been created to measure the performance of blue-chip companies in five of the eight member-states of SAFE. The Dow Jones SAFE indices are designed to support index-linked investment products such as funds, exchange-traded funds, structured products, futures and options. The index measures the performance of the 50 largest Indian stocks and the 50 largest stocks trading in Bangladesh, Mauritius, Pakistan and Sri Lanka.
Aftab Ahmad Chaudhary, managing director and CEO of Islamabad Stock Exchange and secretary general of SAFE, said the Dow Jones SAFE 100 Index showcases the region as one asset class and can be used as an underlying tool for investment products at the national and international level alike.
Independently, South Asian markets like Nepal and others are considered too small by international fund managers. But when grouped together in an index, and more so in an index with India, the markets could attract more attention.
"South Asia is home to some of the most rapidly evolving financial markets worldwide," saids Dow Jones Indexes president Michael Petronella. "By further developing securities markets and aiming at their regional and international integration, SAFE has been contributing significantly to these developments."
IPO regulation on
KATHMANDU: The Initial Public Offering (IPO) Regulation-2065 has come into effect from Sunday. According to the Securities Board of Nepal (Sebon), the regulation has clearly directed the issue managers to return the money within five days after allotment of the issue. But the time period of allotment has been increased from one-and-half months to two-and-a-half months, depending on the number of applications. Earlier, the allotment duration was a minimum of one month and a maximum of two months. Issue managers had been requesting the Board for extension of allotment time saying that the time was not enough for allotment. The regulation has also told issue managers to have space in the application form for photo. "The regulatory authority might make it mandatory for a photo of the applicant because many fake investors applied for the primary shares," said issue manager. Sebon has already made it mandatory to have a bank account to submit application. This was done to check fake applications.
Central bank projects price hike, lower growth
Nepal Rastra bank (NRB) has upwardly revised its earlier inflation target of 7.5 per cent to 11 per cent.
During the mid-term Monetary Policy review here today, the central bank not only revised its inflation target but also slashed the growth target that was projected at seven per cent. "Though globally prices are coming down, the price hike in the domestic market could not be brought down due to non-monetary factors," said NRB governor Dipendra Bahadur Chhetri.
He said that the central bank can bring a strict Monetary Policy to control the prices but fearing its negative impact on private sector, it is reluctant to do so. "We will continue with a lenient monetary policy," he said adding that the central bank could not control money supply only to curb inflation as that would hit private sector hard.
"The growth of seven per cent also could not be achieved," Chhetri admitted adding that the growth would be lower. Though, he did not specifically say what the growth target would be, the Central Bureau of Statics based on the first six months' data has projected 3.8 per cent growth during this fiscal year. "Regular hours of power crisis and low investor confidence give little space for growth this fiscal year," according to the review. The lower projection not only debunks the Monetary Policy's tall claims but also reflects the impact of the global financial crisis that has hit the major labour destinations.
The mid-term evaluation underlines that the declining number of tourists and outbound Nepali workers might shake economic foundations. "Decreasing number of incoming tourists and outbound blue-collar Nepali job seekers will bleed the economy white," the governor said adding that the central bank, however, is hopeful that the new market -- like Libya -- for Nepali labourers might give some respite to remittance that is the life-line of the economy.
The review did not change key variables such as cash reserve ratio (CRR) as the advisor of the government is satisfied with the measures it took in the Monetary Policy.
However, the governor expressed serious concern over the government's inability to spend. "High revenue mobilisation and less spending will result in the contraction of liquidity," he said adding that the at present overall liquidity of the economy was in a comfortable position.
During the mid-term Monetary Policy review here today, the central bank not only revised its inflation target but also slashed the growth target that was projected at seven per cent. "Though globally prices are coming down, the price hike in the domestic market could not be brought down due to non-monetary factors," said NRB governor Dipendra Bahadur Chhetri.
He said that the central bank can bring a strict Monetary Policy to control the prices but fearing its negative impact on private sector, it is reluctant to do so. "We will continue with a lenient monetary policy," he said adding that the central bank could not control money supply only to curb inflation as that would hit private sector hard.
"The growth of seven per cent also could not be achieved," Chhetri admitted adding that the growth would be lower. Though, he did not specifically say what the growth target would be, the Central Bureau of Statics based on the first six months' data has projected 3.8 per cent growth during this fiscal year. "Regular hours of power crisis and low investor confidence give little space for growth this fiscal year," according to the review. The lower projection not only debunks the Monetary Policy's tall claims but also reflects the impact of the global financial crisis that has hit the major labour destinations.
The mid-term evaluation underlines that the declining number of tourists and outbound Nepali workers might shake economic foundations. "Decreasing number of incoming tourists and outbound blue-collar Nepali job seekers will bleed the economy white," the governor said adding that the central bank, however, is hopeful that the new market -- like Libya -- for Nepali labourers might give some respite to remittance that is the life-line of the economy.
The review did not change key variables such as cash reserve ratio (CRR) as the advisor of the government is satisfied with the measures it took in the Monetary Policy.
However, the governor expressed serious concern over the government's inability to spend. "High revenue mobilisation and less spending will result in the contraction of liquidity," he said adding that the at present overall liquidity of the economy was in a comfortable position.
Petrol crisis jolts public confidence
It seems that the valley denizens have stopped believing in the government's promises of smooth supply of petroleum products. Regular bandhs in the Tarai and blockade of the highways connecting to the capital -- the only supply route -- has taught them a new lesson: Hoarding of essential goods and petroleum products according to necessity.
Though Nepal Oil Corporation (NOC) has been selling adequate quantity of petrol, most of the petrol pumps in the Valley were crowded today especially by motorcyclists. At some of the pumps, queues were more than a half-kilometre.
"NOC here sold 3,00,000 litres of petrol on Friday to the petrol pumps and 1,00,000 litres was sold by the Amlekhgunj NOC depot that reached Kathmandu yesterday," informed NOC spokesperson Mukund Dhungel. NOC is the nation's sole petroleum products' distributor cum supplier.
Dhungel was of the view that there was no cause for lower supply. "The Thankot depot sold 22 tankerfuls of petrol today," he said adding that the around 1,00,000 litres of petrol sold today by the Amlekhgunj depot would reach the Valley by tomorrow. "Not only that, we have made arrangements to get supply from Bhairahawa also," he added.
Though Nepal Oil Corporation (NOC) has been selling adequate quantity of petrol, most of the petrol pumps in the Valley were crowded today especially by motorcyclists. At some of the pumps, queues were more than a half-kilometre.
"NOC here sold 3,00,000 litres of petrol on Friday to the petrol pumps and 1,00,000 litres was sold by the Amlekhgunj NOC depot that reached Kathmandu yesterday," informed NOC spokesperson Mukund Dhungel. NOC is the nation's sole petroleum products' distributor cum supplier.
Dhungel was of the view that there was no cause for lower supply. "The Thankot depot sold 22 tankerfuls of petrol today," he said adding that the around 1,00,000 litres of petrol sold today by the Amlekhgunj depot would reach the Valley by tomorrow. "Not only that, we have made arrangements to get supply from Bhairahawa also," he added.
Saturday, March 21, 2009
Sashin Joshi new president
Nepal Bankers' Association's annual general meeting elected a seven-member executive committee under the presidency of NIC Bank Ltd CEO Sashin Joshi.Sashin Joshi, CEO, NIC Bank -- president
Anil Shah, CEO, Nabil Bank -- vice-president
Ashok SJB Rana, CEO, HBL – member
Rajan Singh Bhandari, CEO, Citizens’ Int’l Bank -- member
Suman Joshi, CEO, Laxmi Bank -- member
R K Ummat, CEO, Everest Bank -- member
Siddhanta Raj Pandey, CEO, Ace Development Bank -- member
Prithvi Bahadur Pande, Chairperson-CEO, NIBL -- advisor
Radesh Pant, CEO, BoK -- advisor
Investors 'still' feel jittery
The investors are still feeling jittery as the Nepse -- the sole secondary market -- index did not show any encouraging sign this week too.
Of the nine-sub group indices, trading and manufacturing groups did not see any trading of their scrips this week. Three -- hydropower, hotel and others -- groups gained while remaining four -- development banks, insurance companies, finance companies and commercial banks -- groups lost.
The news of 35 per cent cash dividend by Chilime Hydro power and 25 per cent cash dividend by Nepal Telecomm (NT) has tried to boost the confidence of investors as the hydro power and others group gained this week by an impressive 49.79 points to 887.86 points and 2.35 points to 640.32 points. Similarly hotels group also gained 5.82 points to 352.88 points.
But the development banks group lost by a whopping 48.28 points to 909.81 points, insurance companies group lost by 20.33 points to 661.14 points, finance companies group lost by 13.43 points to 779.12 points and commercial banks group lost by 0.46 point to end at 656.36 points.
The 78-scrip sensitive index -- considered blue chip shares in the domestic market - lost 1.09 points to drop to 175.81 points from Sunday's opening of 176.90 points. Similarly, the float index -- calculated on the basis of real transactions -- also lost 0.28 point to drop to 65.03 points from Sunday's opening of 65.31 points.
However, the transaction amount for this week increased by 6.40 per cent to Rs 293.93 million from last week's Rs 276.25 million. Group-A companies gained their dominance back in the total transaction as they contributed to 73.28 per cent against last week's 48.53 per cent.
This week's top performers were Siddhartha Development Bank (with Rs 44.96 million), Bank of Kathmandu (with Rs 24.01 million), Nepal SBI Bank (with Rs 17.32 million), United Finance (with Rs 17.11 million) and Annapurna Development Bank (with Rs 16.04 million).
Will it won't it?
KATHMANDU: Finance minister Dr Baburam Bhattarai on Thursday visited the Nepal Stock Exchange (Nepse) for the first time since he became the finance minister to boost the confidence of investors. He has been blamed for not being serious in the development of capital market that could be a wheel to change in the small economy like Nepal. He tried to assure that government was committed to the development of the capital market and its the key to industrialisation. Will his assurance boost the investors' confidence or not next week's performance will make it clear.
Over 10 million-unit shares added
KATHMANDU: The secondary market was also flooded with primary, bonus and rights shares in the month of Falgun. Over 10 million shares, including 4 million-unit of primary shares and 5.77 million-unit of bonus shares apart from a huge number of rights shares were listed during the month, said the Nepse. The number of listed companies also touched 152 by the mid-March.
The month of Falgun (mid-February to mid March) witnessed a transaction of Rs 1.16 billion that is 15.65 per cent higher than a month earlier. A total of 17,62,000-unit shares changed hands during the month that saw only 17-day trading.
However, the Nepse index was at 667.20 points and the market capitalisation was at Rs 4.23 trillion -- that is 44.66 per cent to the GDP -- and an increase of 0.55 per cent from a month earlier, the Nepse figures reveal.
Of the nine-sub group indices, trading and manufacturing groups did not see any trading of their scrips this week. Three -- hydropower, hotel and others -- groups gained while remaining four -- development banks, insurance companies, finance companies and commercial banks -- groups lost.
The news of 35 per cent cash dividend by Chilime Hydro power and 25 per cent cash dividend by Nepal Telecomm (NT) has tried to boost the confidence of investors as the hydro power and others group gained this week by an impressive 49.79 points to 887.86 points and 2.35 points to 640.32 points. Similarly hotels group also gained 5.82 points to 352.88 points.
But the development banks group lost by a whopping 48.28 points to 909.81 points, insurance companies group lost by 20.33 points to 661.14 points, finance companies group lost by 13.43 points to 779.12 points and commercial banks group lost by 0.46 point to end at 656.36 points.
The 78-scrip sensitive index -- considered blue chip shares in the domestic market - lost 1.09 points to drop to 175.81 points from Sunday's opening of 176.90 points. Similarly, the float index -- calculated on the basis of real transactions -- also lost 0.28 point to drop to 65.03 points from Sunday's opening of 65.31 points.
However, the transaction amount for this week increased by 6.40 per cent to Rs 293.93 million from last week's Rs 276.25 million. Group-A companies gained their dominance back in the total transaction as they contributed to 73.28 per cent against last week's 48.53 per cent.
This week's top performers were Siddhartha Development Bank (with Rs 44.96 million), Bank of Kathmandu (with Rs 24.01 million), Nepal SBI Bank (with Rs 17.32 million), United Finance (with Rs 17.11 million) and Annapurna Development Bank (with Rs 16.04 million).
Will it won't it?
KATHMANDU: Finance minister Dr Baburam Bhattarai on Thursday visited the Nepal Stock Exchange (Nepse) for the first time since he became the finance minister to boost the confidence of investors. He has been blamed for not being serious in the development of capital market that could be a wheel to change in the small economy like Nepal. He tried to assure that government was committed to the development of the capital market and its the key to industrialisation. Will his assurance boost the investors' confidence or not next week's performance will make it clear.
Over 10 million-unit shares added
KATHMANDU: The secondary market was also flooded with primary, bonus and rights shares in the month of Falgun. Over 10 million shares, including 4 million-unit of primary shares and 5.77 million-unit of bonus shares apart from a huge number of rights shares were listed during the month, said the Nepse. The number of listed companies also touched 152 by the mid-March.
The month of Falgun (mid-February to mid March) witnessed a transaction of Rs 1.16 billion that is 15.65 per cent higher than a month earlier. A total of 17,62,000-unit shares changed hands during the month that saw only 17-day trading.
However, the Nepse index was at 667.20 points and the market capitalisation was at Rs 4.23 trillion -- that is 44.66 per cent to the GDP -- and an increase of 0.55 per cent from a month earlier, the Nepse figures reveal.
Friday, March 20, 2009
Nepal at 121st position in the Corruption Perception Index
Nepal ranks at the bottom 121st position on the Corruption Perception Index (CPI) 2008 published by Transparency International.
Nepal scored 2.7 in 2008, slightly above than in 2007 when it had scored 2.5. Countries scoring below three – out of the total 10 -- are said to be in rampant corruption.
"To improve Nepal's grading and atleast score above three is our goal," said CIAA acting chief commissioner Lalit Bahadur Limbu during an interaction between the financial institutions and Commission for Investigation of Abuse of Authority (CIAA) here today.
To improve the score the private sector must be brought into the net of CIAA, he said adding that to improve Nepal's grading the private sector -- especially financial institutions -- must be more transparent and self-regulated.
"However, a highly developed country like the US also failed in maintaining financial discipline -- which brought about the recent global crisis -- so how can Nepali financial institutions self-regulate?" said central bank governor Dipendra Bahadur Chhetri. "The global financial crisis is the result of failure of self-regulation in US financial institutions," he said adding that Nepali financial institutions should be more vigilant. "One of the measures could be maintaining a Code of Conduct," he said.
"To self-regulate, please maintain a Code of Conduct," CIAA acting chief commissioner Limbu also said.
The anti-corruption body organised the interaction to inform financial institutions on the convention -- that is going to be ratified by the parliament in the next session -- to give more teeth to the CIAA to act against private financial institutions also.
"There are lots of complaints against private banks also and the private sector will also be brough into the net of the CIAA after the convention is ratified," he said.
"The financial institutions -- custodians of public deposit -- should be more self-regulated," Bed Prasad Siwakoti, commissioner at the CIAA said hailing the bankers' efforts at self- regulation.
On the occasion, the bankers informed of their institutions' Code of Conduct and initiatives of Nepal Bankers' Association (NBA). The banking sector is considered one of the most transparent sectors in Nepal, though it has still to pass a lot of tests.
Nepal Rastra Bank (NRB) took Nepal Bangladesh Bank (NBB) under its control to safeguard the public deposit. It is one of the best examples of how lack of self-regulatory mechanism hurts a financial institution and puts public's money in danger.
Nepal scored 2.7 in 2008, slightly above than in 2007 when it had scored 2.5. Countries scoring below three – out of the total 10 -- are said to be in rampant corruption.
"To improve Nepal's grading and atleast score above three is our goal," said CIAA acting chief commissioner Lalit Bahadur Limbu during an interaction between the financial institutions and Commission for Investigation of Abuse of Authority (CIAA) here today.
To improve the score the private sector must be brought into the net of CIAA, he said adding that to improve Nepal's grading the private sector -- especially financial institutions -- must be more transparent and self-regulated.
"However, a highly developed country like the US also failed in maintaining financial discipline -- which brought about the recent global crisis -- so how can Nepali financial institutions self-regulate?" said central bank governor Dipendra Bahadur Chhetri. "The global financial crisis is the result of failure of self-regulation in US financial institutions," he said adding that Nepali financial institutions should be more vigilant. "One of the measures could be maintaining a Code of Conduct," he said.
"To self-regulate, please maintain a Code of Conduct," CIAA acting chief commissioner Limbu also said.
The anti-corruption body organised the interaction to inform financial institutions on the convention -- that is going to be ratified by the parliament in the next session -- to give more teeth to the CIAA to act against private financial institutions also.
"There are lots of complaints against private banks also and the private sector will also be brough into the net of the CIAA after the convention is ratified," he said.
"The financial institutions -- custodians of public deposit -- should be more self-regulated," Bed Prasad Siwakoti, commissioner at the CIAA said hailing the bankers' efforts at self- regulation.
On the occasion, the bankers informed of their institutions' Code of Conduct and initiatives of Nepal Bankers' Association (NBA). The banking sector is considered one of the most transparent sectors in Nepal, though it has still to pass a lot of tests.
Nepal Rastra Bank (NRB) took Nepal Bangladesh Bank (NBB) under its control to safeguard the public deposit. It is one of the best examples of how lack of self-regulatory mechanism hurts a financial institution and puts public's money in danger.
RID combing RB Complex shops
The Revenue Investigation Department (RID) has started investigation into the charge of revenue theft by owners of the shops that they sealed in RB Complex on March 16. "We have started checking the stocks but by today we could cover only three shops," said RID director general Tanka Mani Sharma.
Today, the traders cooperated with the investigation officers according to an understanding reached between the officials and the traders last Friday, the day shops at RB Complex re-opened. The complex had shut down for four days to protest the RID raid.
On March 16, the RID officials had gone to RB Complex to conduct a raid after getting a tip-off about VAT theft by some traders there. They sealed six shops -- B120, B121, B119, G49, G45, G304 amid a major scuffle with the traders.
The traders and their helpers surrounded the officials, manhandled them and took them hostage. They also burnt their official documents. Armed Police Force personnel had to be mobilised to free the RID officials.
On Thursday, the traders gave a written apology to the RID for manhandling RID staffers on duty. The department has, however, started legal action against owners of the six shops in RB Complex and one shop in Surya Arcade. The investigation will be completed within a week and only then the seven shops will be given clearance.
RID has started the investigation against them for alleged VAT theft and other revenue irregularities.
Today, the traders cooperated with the investigation officers according to an understanding reached between the officials and the traders last Friday, the day shops at RB Complex re-opened. The complex had shut down for four days to protest the RID raid.
On March 16, the RID officials had gone to RB Complex to conduct a raid after getting a tip-off about VAT theft by some traders there. They sealed six shops -- B120, B121, B119, G49, G45, G304 amid a major scuffle with the traders.
The traders and their helpers surrounded the officials, manhandled them and took them hostage. They also burnt their official documents. Armed Police Force personnel had to be mobilised to free the RID officials.
On Thursday, the traders gave a written apology to the RID for manhandling RID staffers on duty. The department has, however, started legal action against owners of the six shops in RB Complex and one shop in Surya Arcade. The investigation will be completed within a week and only then the seven shops will be given clearance.
RID has started the investigation against them for alleged VAT theft and other revenue irregularities.
Thursday, March 19, 2009
Industrialists hail government decision
The private sector today welcomed yesterday's cabinet decision to provide it relief.
At a press meet organised jointly by the Ministry of Industry (MoI), Federation of Nepalese Chambers of Commerce and Industries (FNCCI), Nepal Chambers of Commerce (NCC), Confederation of Nepalese Industries (CNI) and Morang Industry Association (MIA) here, representatives of the private sector organisations said they had called off their protest programmes.
"The government has addressed our demands," FNCCI president Joshi said adding that the private sector had called off all its protests.
The cabinet has decided to arrange for alternative power supply to the industries. "We have formed a commmittee that will suggest how to provide regular power supply to the industries," said Industry Minister Astalaxmi Shakya.
The onus now is on the Ministry of Water Resources (MoWR) that will have to arrange the regular power supply, she said adding that the industries, however, will get five days regular supply of power. FNCCI president Kush Kumar Joshi also said that the private sector would wait and see how MoWR addresses the problem.
The government has also requested everyone not to call strikes or bandhs but to support the smooth operation of industries. "I request everyone to be sensitive and not call bandhs but help protect the ailing industrial sector," the minister said.
Industrialists in Sunsari-Morang corridor were on strike since the last two weeks demanding regular power supply and halt to bandhs and forced donation. MIA had also threatened to go on a hunger-strike from today if their demands were not addressed.
"If the private sector moves ahead unitedly, it can convince the government," CA member and CNI president Binod Kumar Chaudhary told The Himalayan Times from Nawalparasi. "The economic agenda should come to the forefront," he added.
Meanwhile, Hotel Association of Nepal (HAN) has demanded subsidy in diesel for the hotel sector. Submitting a memorandum to Industry Minister Astalaxmi Shakya, it demanded that the demand charge not be taken until the power crisis resolves.
At a press meet organised jointly by the Ministry of Industry (MoI), Federation of Nepalese Chambers of Commerce and Industries (FNCCI), Nepal Chambers of Commerce (NCC), Confederation of Nepalese Industries (CNI) and Morang Industry Association (MIA) here, representatives of the private sector organisations said they had called off their protest programmes.
"The government has addressed our demands," FNCCI president Joshi said adding that the private sector had called off all its protests.
The cabinet has decided to arrange for alternative power supply to the industries. "We have formed a commmittee that will suggest how to provide regular power supply to the industries," said Industry Minister Astalaxmi Shakya.
The onus now is on the Ministry of Water Resources (MoWR) that will have to arrange the regular power supply, she said adding that the industries, however, will get five days regular supply of power. FNCCI president Kush Kumar Joshi also said that the private sector would wait and see how MoWR addresses the problem.
The government has also requested everyone not to call strikes or bandhs but to support the smooth operation of industries. "I request everyone to be sensitive and not call bandhs but help protect the ailing industrial sector," the minister said.
Industrialists in Sunsari-Morang corridor were on strike since the last two weeks demanding regular power supply and halt to bandhs and forced donation. MIA had also threatened to go on a hunger-strike from today if their demands were not addressed.
"If the private sector moves ahead unitedly, it can convince the government," CA member and CNI president Binod Kumar Chaudhary told The Himalayan Times from Nawalparasi. "The economic agenda should come to the forefront," he added.
Meanwhile, Hotel Association of Nepal (HAN) has demanded subsidy in diesel for the hotel sector. Submitting a memorandum to Industry Minister Astalaxmi Shakya, it demanded that the demand charge not be taken until the power crisis resolves.
Chinese Crisis in offing, to hit Nepal harder
China is heading towards a US-like situation that led to global crisis.
"China is also heading towards a US-like situation," said Rashed Al Mahmud Titumir, professor of economics at Dhaka University speaking at an interaction here. "Currently, China is also following the US path that led to the global crisis," he said adding that there has been a huge job cut in China over the recent months.
The impact of the crisis in China on Nepal, according to him, will be even more deadlier than the global crisis. Consumer items will become cheaper than food.
"TVs will be cheaper but food prices will skyrocket, hurting Nepal," agreed Nabin Subedi, Team Leader, ActionAid Nepal. "It might lead to a humanitarian crisis."
At a time when the government is fighting to meet the rising expectations of Nepalis, after the global crisis the Chinese crisis will be the last straw on its back.
Nepal, unlike earlier claims, will feel the heat of the global recession as it has a strong representation of its labour force in the markets that are tied to the US economy.
Though lesser global exposure will result in lesser impact on Nepal, experts here have claimed that remittance -- the life line of Nepal's economy -- will decline when the number of migrant Nepali workers start returning and the outward bound trend slows down. "Thriving financial institutions will see holes in their balance sheets," they said.
The professor toed the school of thought that developing countries like Nepal will feel the heat of the financial crisis -- in his own words, 'Real Systemic Crisis'.
Blind faith in the efficiency of deregulated financial markets and the absence of a cooperative financial and monetary system created an illusion of risk-free profits and licensed profligacy through speculative finance in many areas.
"The crisis -- fuelled by easy money -- has raised serious questions as to whether it is the result of misleading policy interventions and whether this will weather US hegemony," the professor said adding that the crisis was evident due to over-production and decline in profit. "The US tried hard to stop this crisis by offering more innovative products but failed," he added. The mounting turmoil reflects failures of national and international financial deregulation, persistent global current-accounts imbalances, absence of a rule-based international monetary system, and deep inconsistencies among global trading, financial, and monetary policies.
"China is also heading towards a US-like situation," said Rashed Al Mahmud Titumir, professor of economics at Dhaka University speaking at an interaction here. "Currently, China is also following the US path that led to the global crisis," he said adding that there has been a huge job cut in China over the recent months.
The impact of the crisis in China on Nepal, according to him, will be even more deadlier than the global crisis. Consumer items will become cheaper than food.
"TVs will be cheaper but food prices will skyrocket, hurting Nepal," agreed Nabin Subedi, Team Leader, ActionAid Nepal. "It might lead to a humanitarian crisis."
At a time when the government is fighting to meet the rising expectations of Nepalis, after the global crisis the Chinese crisis will be the last straw on its back.
Nepal, unlike earlier claims, will feel the heat of the global recession as it has a strong representation of its labour force in the markets that are tied to the US economy.
Though lesser global exposure will result in lesser impact on Nepal, experts here have claimed that remittance -- the life line of Nepal's economy -- will decline when the number of migrant Nepali workers start returning and the outward bound trend slows down. "Thriving financial institutions will see holes in their balance sheets," they said.
The professor toed the school of thought that developing countries like Nepal will feel the heat of the financial crisis -- in his own words, 'Real Systemic Crisis'.
Blind faith in the efficiency of deregulated financial markets and the absence of a cooperative financial and monetary system created an illusion of risk-free profits and licensed profligacy through speculative finance in many areas.
"The crisis -- fuelled by easy money -- has raised serious questions as to whether it is the result of misleading policy interventions and whether this will weather US hegemony," the professor said adding that the crisis was evident due to over-production and decline in profit. "The US tried hard to stop this crisis by offering more innovative products but failed," he added. The mounting turmoil reflects failures of national and international financial deregulation, persistent global current-accounts imbalances, absence of a rule-based international monetary system, and deep inconsistencies among global trading, financial, and monetary policies.
Capital market key to change: FM
Finance minister Dr Baburam Bhattarai today tried to boost the confidence of investors saying that government was committed to the development of the capital market. "Capital market is the key to industrialisation," Dr Bhattarai said during his first visit to the Nepal Stock Exchange Ltd (Nepse) -- the sole secondary market."However, the dominance of financial institutions should be reduced and more real sectors need to be listed," added the Maoist finance minister.
Contradicting popular belief that he is not serious about the development of capital market, the finance minister paid a visit to the secondary market that is considered a fast-track to capitalism.
On the occasion, acting revenue secretary Krishna Hari Baskota said that a few players have a monopoly of the market. "Despite the huge number of investors, it is only a few people who still have a hold over it," he added.
"The capital market can be a tool for poverty reduction," said Shankar Man Singh, general manager of the government-owned Nepse. "It needs to be expanded to the rural areas," he added.
At a time when two other stock exchanges from private sector are in the pipeline, the government should be serious about developing Nepse. "Nepse is an example of how a government-run institution can fare better, if run in a transparent manner," said Dr Narayan Prasad Poudel, Nepse chairman.
Established in 1993, Nepse has seen a sea change in its technology and development over the last one-and-a-half decades but still the number of brokers is small and the delay in transfer of share certificates is one of the hurdles pulling back market development.
Wednesday, March 18, 2009
Changed spending pattern makes NRB review CPI
Nepal Rastra Bank, the central bank, has started reviewing the Consumer Pricer Index (CPI) -- the main gauge of inflation -- as the pattern of spending on consumer goods has changed dramatically over the last one decade.
"We are reviewing the present basket of 301 goods and services that is an indicator of price hike," Trilochan Pangeni, executive director at the Research Department of Nepal Rastra Bank (NRB) said. The department is responsible for the collection and compilation of the CPI that is published every month.
"However, it will take a year to complete the review process and finalise the new basket," he said adding that since the CPI was formed the expenditure pattern of Nepali consumers had changed. The spending pattern changed drastically thanks to remittance sent by migrant workers.
Remittance has contributed to not only change in lifestyle but has also fuelled consumerism, said Pangeni. "The living standards of the rural populace has gone up and people there have also started spending on better education for their children. Nowadays, they send their children to boarding schools instead of government ones." A review is required for wider coverage, he added.
The consumer price index (CPI) is a measure of the average price of consumer goods and services purchased by households. It is an index determined by measuring the price of a standard group of goods meant to represent the typical market basket that includes 301 goods and services and applied to the typical urban consumer.
It is one of several price indices calculated by the central bank. The per cent change in the CPI is a measure of inflation. The CPI can be used to index -- adjust for the effects of inflation -- wages, salaries, pensions or regulated or contracted prices.
The price data are collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times. The weight data are estimates of the shares of the different types of expenditure as fractions of the total expenditure covered by the index. These weights are usually based upon expenditure data obtained for sampled periods from a sample of households.
The CPI is one of the most closely watched national economic statistics that is published every month by the Research Department of NRB, according to which the first six months' price hike stands at 14.4 per cent.
"We are reviewing the present basket of 301 goods and services that is an indicator of price hike," Trilochan Pangeni, executive director at the Research Department of Nepal Rastra Bank (NRB) said. The department is responsible for the collection and compilation of the CPI that is published every month.
"However, it will take a year to complete the review process and finalise the new basket," he said adding that since the CPI was formed the expenditure pattern of Nepali consumers had changed. The spending pattern changed drastically thanks to remittance sent by migrant workers.
Remittance has contributed to not only change in lifestyle but has also fuelled consumerism, said Pangeni. "The living standards of the rural populace has gone up and people there have also started spending on better education for their children. Nowadays, they send their children to boarding schools instead of government ones." A review is required for wider coverage, he added.
The consumer price index (CPI) is a measure of the average price of consumer goods and services purchased by households. It is an index determined by measuring the price of a standard group of goods meant to represent the typical market basket that includes 301 goods and services and applied to the typical urban consumer.
It is one of several price indices calculated by the central bank. The per cent change in the CPI is a measure of inflation. The CPI can be used to index -- adjust for the effects of inflation -- wages, salaries, pensions or regulated or contracted prices.
The price data are collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times. The weight data are estimates of the shares of the different types of expenditure as fractions of the total expenditure covered by the index. These weights are usually based upon expenditure data obtained for sampled periods from a sample of households.
The CPI is one of the most closely watched national economic statistics that is published every month by the Research Department of NRB, according to which the first six months' price hike stands at 14.4 per cent.
Tuesday, March 17, 2009
Baharain Air's maiden flight lands in Kathmandu
Bahrain Air -- the second airlines that has started flying on the Kathmandu- Baharain route -- landed at Tribhuwan International Airport (TIA) here this morning.
Airlines managing director Ibrahim Abdulla Al Hamr said the airlines will strengthen economic ties between Nepal and Bahrain. "It has established itself as a brand in the competitive Gulf-Asia sector in a comparatively short time," he added.
Gulf Air is already flying on this route that is considered lucrative due to Nepali migrant workers' inflow and outflow in the Gulf nations. Bahrain Air is eyeing the market pie that Gulf Air has been monopolising.
Bahrain is also a transit point for Nepali and foreign tourists to and from Kathmandu apart from the crowd of blue-collar Nepali workers.
With the country's tourism industry bouncing back and massive increase in number of Nepalis going abroad, more and more foreign airline companies are seeking an opportunity to operate flights to Nepal.
Silk Air celebrates 20th anniversary
KATHMANDU: Silk Air -- the regional airlines of Singapore Airlines -- celebrated its 20th anniversary in the capital on Monday. The airlines is planning to again increase its flight frequency from the current three flights a week. Earlier, it had six flights on the Kathmandu-Singapore route. "But due to off-season, the airlines reduced the frequency of flights," said Silk Air's Nepal manager Joshua Ganesan.
Airlines flying to Nepal
KATHMANDU: Some of the international airlines flying to Nepal.
Aeroflot Russian Airlines
Biman Bangladesh Airlines
British Airways
Dragon Air
Baharain Air
Gulf Air
Jet Airways
Indian Airlines
Pakistan International Airlines
Quatar Airways
Royal Bhutan Airline - Druk Air
Silk Air
Singapore Airlines
Transavia Airlines
Thai Airways International
Airlines managing director Ibrahim Abdulla Al Hamr said the airlines will strengthen economic ties between Nepal and Bahrain. "It has established itself as a brand in the competitive Gulf-Asia sector in a comparatively short time," he added.
Gulf Air is already flying on this route that is considered lucrative due to Nepali migrant workers' inflow and outflow in the Gulf nations. Bahrain Air is eyeing the market pie that Gulf Air has been monopolising.
Bahrain is also a transit point for Nepali and foreign tourists to and from Kathmandu apart from the crowd of blue-collar Nepali workers.
With the country's tourism industry bouncing back and massive increase in number of Nepalis going abroad, more and more foreign airline companies are seeking an opportunity to operate flights to Nepal.
Silk Air celebrates 20th anniversary
KATHMANDU: Silk Air -- the regional airlines of Singapore Airlines -- celebrated its 20th anniversary in the capital on Monday. The airlines is planning to again increase its flight frequency from the current three flights a week. Earlier, it had six flights on the Kathmandu-Singapore route. "But due to off-season, the airlines reduced the frequency of flights," said Silk Air's Nepal manager Joshua Ganesan.
Airlines flying to Nepal
KATHMANDU: Some of the international airlines flying to Nepal.
Aeroflot Russian Airlines
Biman Bangladesh Airlines
British Airways
Dragon Air
Baharain Air
Gulf Air
Jet Airways
Indian Airlines
Pakistan International Airlines
Quatar Airways
Royal Bhutan Airline - Druk Air
Silk Air
Singapore Airlines
Transavia Airlines
Thai Airways International
Monday, March 16, 2009
Kist upgraded as a 26th commercial bank
The central bank has awarded Kist Merchant Banking and Finance Company -- a C-Class finance company -- an A-class commercial bank's licence, making it the 26th commercial bank.
Nepal Rastra Bank's (NRB) board meeting today awarded the licence of a commercial bank to the finance company. It is the second finance company to be upgraded to a commercial bank after NMB bank, the 25th commercial bank.
Currently, there are 173 licenced deposit-taking institutions and at least two dozen financial institutions including five A-class commercial banks are in the pipeline.
The wonder of it is that a small economy like Nepal is sustaining so many financial institutions. However, the financial institutions are blamed for being urban-centric leading to a situation where over 70 per cent of populace not getting access to banking services.
The proposed People's Bank Nepal Ltd, Mero Bank Ltd and Century Commercial Bank are also in the process of getting licences from the central bank apart from another C-class finance company -- Nepal Share Market. In the event of these four getting their licences, the country will have 30 commercial banks.
Kist in numbers (Rs in '000)
1 Authorized Capital Rs 5,000,000
2 Paid Up Capital Rs 2,000,000
3 Deposit Rs 5,014,210
4 Lending & Investment Rs 5,244,758
5 Net Profit (Poush end 65) Rs 16,850
6 Net worth Rs 2,043,173
7 P/E Ratio 477 times
8 No of Branches 19 (in number)
9 Customer Base 60,000 (in number)
10 No of Employees 223 (in number)
Nepal Rastra Bank's (NRB) board meeting today awarded the licence of a commercial bank to the finance company. It is the second finance company to be upgraded to a commercial bank after NMB bank, the 25th commercial bank.
Currently, there are 173 licenced deposit-taking institutions and at least two dozen financial institutions including five A-class commercial banks are in the pipeline.
The wonder of it is that a small economy like Nepal is sustaining so many financial institutions. However, the financial institutions are blamed for being urban-centric leading to a situation where over 70 per cent of populace not getting access to banking services.
The proposed People's Bank Nepal Ltd, Mero Bank Ltd and Century Commercial Bank are also in the process of getting licences from the central bank apart from another C-class finance company -- Nepal Share Market. In the event of these four getting their licences, the country will have 30 commercial banks.
Kist in numbers (Rs in '000)
1 Authorized Capital Rs 5,000,000
2 Paid Up Capital Rs 2,000,000
3 Deposit Rs 5,014,210
4 Lending & Investment Rs 5,244,758
5 Net Profit (Poush end 65) Rs 16,850
6 Net worth Rs 2,043,173
7 P/E Ratio 477 times
8 No of Branches 19 (in number)
9 Customer Base 60,000 (in number)
10 No of Employees 223 (in number)
Government collects record revenue
The government has collected Rs 84.4 billion revenue in the first eight months of this fiscal year. During the same period last fiscal year, the revenue collection was at Rs 60.61 billion, according to the finance ministry.
The increased amount Rs 23.43 billion that is 38.6 per cent growth is the record increasement in the revenue collection in the history, said Krishna Hari Baskota, acting revenue secretary at the finance ministry. In the total collection, Voluntary Disclosure of Income Sources (VDIS) contributed Rs 470 million in the total revenue collection," he added.
The government has been successful in revenue collection, though it has failed to spend on development activities. The government had collected Rs 72.26 billion till the end of the seventh month of this fiscal year 2008-09.
The increased amount Rs 23.43 billion that is 38.6 per cent growth is the record increasement in the revenue collection in the history, said Krishna Hari Baskota, acting revenue secretary at the finance ministry. In the total collection, Voluntary Disclosure of Income Sources (VDIS) contributed Rs 470 million in the total revenue collection," he added.
The government has been successful in revenue collection, though it has failed to spend on development activities. The government had collected Rs 72.26 billion till the end of the seventh month of this fiscal year 2008-09.
Sunday, March 15, 2009
Nepali industries crisis-hit, declares business community
The industrialists today declared industrial crisis, blaming the government apathy for the same.
“The industries are vulnerable due to long hours of power outage, labour disputes and insecurity,” Pradeep Jung Pandey, vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said.
“As responsible citizens, the business fraternity cannot burn tyres and call bandh — the only language the government understands,” the vice-president of umbrella organisation of Nepali private sector said, adding, “We have been compelled to declare crisis as the situation is grim and the government is not serious.”
The district chambers and commodity associations under FNCCI, Nepal Chambers of Commerce (NCC) and Confederation of Nepalese Industries (CNI) met at the FNCCI headquarters in Teku here late in the evening for emergency meeting and declared Industrial Crisis themselves.
“We have decided not to pay demand charge for electricity as our industries have been reeling under 16-hour daily load-shedding,” he said. The industry captains are also planning to submit a memorandum to the prime minister urging him to address their problems immediately.
“The government is concerned only about revenue collection and has been neglecting our problems,” alleged Surendra Bir Malakar, president of NCC. Though the Maoists-led government claims of national industrial capatilism, the domestic industries are the worst-hit due to labour disputes with the trade unions related to the ruling coalition, and the power crisis.
Earlier, the government had declared Energy Crisis, but did nothing concrete for the interrupted power supply for the industrialists. “The power crisis won’t be solved for another five years,” said Pandey. During the decade-long conflict also the industrialists were not so hopeless.
“The government must immediately address power crisis, stop strikes in the industries and come up with a rescue package for the industries,” Malakar urged.
During the mid-term budget review, Finance Minister Dr Baburam Bhattarai had accepted that the desired growth target could not be achieved. The adverse conditions in the country has reduced the growth as the Central Bureau of Statistics (CBS) has also reduced the growth forecast to 3.8 per cent from the government’s seven per cent growth target.
The manufacturing sector will have a negative growth of 0.5 per cent, according to the CBS.
“The industries are vulnerable due to long hours of power outage, labour disputes and insecurity,” Pradeep Jung Pandey, vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said.
“As responsible citizens, the business fraternity cannot burn tyres and call bandh — the only language the government understands,” the vice-president of umbrella organisation of Nepali private sector said, adding, “We have been compelled to declare crisis as the situation is grim and the government is not serious.”
The district chambers and commodity associations under FNCCI, Nepal Chambers of Commerce (NCC) and Confederation of Nepalese Industries (CNI) met at the FNCCI headquarters in Teku here late in the evening for emergency meeting and declared Industrial Crisis themselves.
“We have decided not to pay demand charge for electricity as our industries have been reeling under 16-hour daily load-shedding,” he said. The industry captains are also planning to submit a memorandum to the prime minister urging him to address their problems immediately.
“The government is concerned only about revenue collection and has been neglecting our problems,” alleged Surendra Bir Malakar, president of NCC. Though the Maoists-led government claims of national industrial capatilism, the domestic industries are the worst-hit due to labour disputes with the trade unions related to the ruling coalition, and the power crisis.
Earlier, the government had declared Energy Crisis, but did nothing concrete for the interrupted power supply for the industrialists. “The power crisis won’t be solved for another five years,” said Pandey. During the decade-long conflict also the industrialists were not so hopeless.
“The government must immediately address power crisis, stop strikes in the industries and come up with a rescue package for the industries,” Malakar urged.
During the mid-term budget review, Finance Minister Dr Baburam Bhattarai had accepted that the desired growth target could not be achieved. The adverse conditions in the country has reduced the growth as the Central Bureau of Statistics (CBS) has also reduced the growth forecast to 3.8 per cent from the government’s seven per cent growth target.
The manufacturing sector will have a negative growth of 0.5 per cent, according to the CBS.
Density, distance and division; theme of World Development Report
Nepal lacks 3Ds -- density, distance and division -- according to a World Development Report: Reshaping Economic Geography' -- made public here today."Density, distance and division – the focus of this year’s report -- are key to growth," the report said arguing that the most effective policies for promoting long-term growth are those that facilitate geographic concentration and economic integration, both within and across countries.
"The world's most geographically disadvantaged people know all too well that growth does not come to every place at once," said Indermeet S Gill, director of the World Development Report (WDR) and chief economist, Europe and Central Asia. "Markets favour some places over others. Fighting this concentration tantamount to fighting prosperity. Governments should facilitate the geographic concentration of production," he said adding, "But they must also institute policies that make the provision of basic needs -- schools, security, streets, and sanitation -- more universal."
The new World Development Report also challenges the conventional assumption that economic activities must be spread geographically to benefit the world's most poor and vulnerable. Trying to spread out economic activity can hinder growth and does little to fight poverty, it said. "For rapid, shared growth, governments must promote economic integration which, at its core, is about the mobility of people, products, and ideas."
"Throughout history, mobility has helped people escape the tyranny of poor geography or poor governance," said Gill. "The report sees this as part of a vital process of economic integration, since mobile people and products form the cornerstone of inclusive, sustainable globalisation."
Integration should be the pivotal concept in the policy discussions involving the location of production, people and poverty in particular, debates on urbanization, regional development, and globalisation. Instead, all three overemphasize place-based interventions.
"The ideas that the report brings to the table are highly relevant to the transitional period that Nepal is currently undergoing," said Susan Goldmark, World Bank Country Director for Nepal. "Economic planners and policy makers in Nepal are discussing many of the same issues in the preparation of the government's National Development Strategy and ideas presented in the report should be useful as the country embarks on the path of redefining institutions to support a peaceful, inclusive and prosperous New Nepal."
The report reframes the policy debates to include all the instruments of integration -- common institutions, connective infrastructure, and targeted interventions. By common institutions, the report means regulations affecting land, labour and commerce and social services such as education and health financed through taxes and transfers.
"Infrastructure refers to roads, railways, ports, airports, and communications systems. Interventions include slum clearance programmes, special tax incentives to firms and preferential trade access for poor countries," said Rameshwor Prasad Khanal, secretary at the finance ministry. He also shared Nepal's experiences in planning and implementing development.
The report launching was co-hosted by the World Bank Nepal Office and Management Association of Nepal (MAN). MAN president Janak Raj Shah said Nepal was still in the discussion phase of how to shape the economy. "Reshaping the economy is a mammoth task," he added.National Planning Commission vice-chairman Dr Guna Nidhi Sharma chaired the event while former chief secretary Dr Bimal Prasad Koirala acted as moderator.
Saturday, March 14, 2009
Nepse down, investor confidence low
Two finance companies had a field day in the secondary market this week even though the finance company group lost 3.53 points to end up at 792.55 points.
Capital Merchant Banking and Finance's 2,10,000-unit shares changed hands as it topped the chart in terms of share units traded, whereas in terms of number of transactions Prabhu Finance topped the chart with 554 transactions for this week.
Low investor confidence and poor performance of key players pulled the Nepse index down by 3.48 points to close at 667.20 points.
Except development banks, hydropower and insurance companies groups, other major groups -- commercial banks, trading and finance companies -- lost this week too.
The development bank group gained 7.92 points to reach 958.09 points from the opening of Sunday. Hydropower group surged by 7.01 points to reach 838.07 points and insurance companies group gained 1.05 points to reach 681.47 points from the Sunday's opening.
However, the trading group plunged by 8.14 points to drop to 213.82 points. Commercial banks group lost 5.93 points to drop to 656.82 points. Finance companies group lost 3.53 points to drop to 792.55 points and the others group -- that has the largest scrips of Nepal Telecom -- lost 2.35 points to drop to 637.97 points from the opening on Sunday.
Of the nine-sub group indices, hotels and manufacturing groups did not see any trading of their scrips this week.
This week's top performers were Capital Merchant Banking and Finance (with Rs 42.84 million), Standard Chartered Bank Nepal (with Rs 19.61 million), Siddhartha Development Bank (with Rs 18.58 million), Bank of Kathmandu (with Rs 16.39 million) and Kumari Bank (with Rs 12.91 million).
The capital market this week saw trading only for four days due to the Holi holiday on Tuesday. Nepse began in the green with a 0.67 point gain on Sunday to close the first day at 671.35 points from the opening 670.68 points. The second day also, it witnessed growth, albeit marginal, by 0.09 point to close at 671.44 points. The third day, on Wednesday, Nepse lost 1.21 points to close the day's trading at 670.23 points. The last day for this week, Thursday, saw a further drop by 3.03 points to close trading at 667.20 points.
The 78-scrip sensitive index -- considered blue chip shares - lost a marginal 0.67 point to drop to 176.90 points from Sunday's opening of 177.78 points. Similarly, the float index -- calculated on the basis of real transactions -- also lost by a mere 0.45 point to drop to 65.31 points from Sunday's opening of 65.76 points.
The transaction amount for this week decreased by 1.86 per cent to drop to Rs 276.25 million from last week's 281.48 million. Group-A companies also lost their dominance in the total transaction as they contributed 48.53 per cent against 66.83 per cent last week.
This week only 50,000-unit bonus shares of Narayani Development Bank were listed at Nepse that had listed over seven million units of shares last week. Over-flooding of shares and low investor confidence pulled the sole secondary market index down, according to market analysts.
Capital Merchant Banking and Finance's 2,10,000-unit shares changed hands as it topped the chart in terms of share units traded, whereas in terms of number of transactions Prabhu Finance topped the chart with 554 transactions for this week.
Low investor confidence and poor performance of key players pulled the Nepse index down by 3.48 points to close at 667.20 points.
Except development banks, hydropower and insurance companies groups, other major groups -- commercial banks, trading and finance companies -- lost this week too.
The development bank group gained 7.92 points to reach 958.09 points from the opening of Sunday. Hydropower group surged by 7.01 points to reach 838.07 points and insurance companies group gained 1.05 points to reach 681.47 points from the Sunday's opening.
However, the trading group plunged by 8.14 points to drop to 213.82 points. Commercial banks group lost 5.93 points to drop to 656.82 points. Finance companies group lost 3.53 points to drop to 792.55 points and the others group -- that has the largest scrips of Nepal Telecom -- lost 2.35 points to drop to 637.97 points from the opening on Sunday.
Of the nine-sub group indices, hotels and manufacturing groups did not see any trading of their scrips this week.
This week's top performers were Capital Merchant Banking and Finance (with Rs 42.84 million), Standard Chartered Bank Nepal (with Rs 19.61 million), Siddhartha Development Bank (with Rs 18.58 million), Bank of Kathmandu (with Rs 16.39 million) and Kumari Bank (with Rs 12.91 million).
The capital market this week saw trading only for four days due to the Holi holiday on Tuesday. Nepse began in the green with a 0.67 point gain on Sunday to close the first day at 671.35 points from the opening 670.68 points. The second day also, it witnessed growth, albeit marginal, by 0.09 point to close at 671.44 points. The third day, on Wednesday, Nepse lost 1.21 points to close the day's trading at 670.23 points. The last day for this week, Thursday, saw a further drop by 3.03 points to close trading at 667.20 points.
The 78-scrip sensitive index -- considered blue chip shares - lost a marginal 0.67 point to drop to 176.90 points from Sunday's opening of 177.78 points. Similarly, the float index -- calculated on the basis of real transactions -- also lost by a mere 0.45 point to drop to 65.31 points from Sunday's opening of 65.76 points.
The transaction amount for this week decreased by 1.86 per cent to drop to Rs 276.25 million from last week's 281.48 million. Group-A companies also lost their dominance in the total transaction as they contributed 48.53 per cent against 66.83 per cent last week.
This week only 50,000-unit bonus shares of Narayani Development Bank were listed at Nepse that had listed over seven million units of shares last week. Over-flooding of shares and low investor confidence pulled the sole secondary market index down, according to market analysts.
Friday, March 13, 2009
VDIS extended deadline brings in more cash
The Inland Revenue Department (IRD) collected Rs 220 million today — on the last day of the extended deadline of the Voluntary Disclosure of Income Sources (VDIS) scheme.
The Finance Ministry has managed to mop up Rs 1.51 billion, thanks to this scheme, that exceeds its minimum target of Rs 1 billion.
“Our records reveal that around 3,600 people have paid taxes after declaring their assets till today. However, we had compiled a list of 10,000 people,” said Kapil Dev Ghimire, director general, IRD.
The government extended the deadline by a month after the industry captains urged the former to accede to their request.
In the first phase, the government had managed to rake in Rs 1.42 billion. The original deadline had expired on February 11.
But, the extension came in handy for the government if the collections are anything to go by. It collected an additional Rs 467.8 million from 1,600 people.
Interestingly, a bulk of the people, who availed of the revised deadline, is realtors.
Finance Minister Dr Baburam Bhattrai has announced the scheme during his budget speech on September 19, 2008.
As per the VDIS, an individual can declare property that has no specific source of income. The tax payee has to cough up 10 per cent of the total cost of the asset to make it legitimate.
On the last day, a person paid a record Rs 4.7 million.
According to the IRD, only 15 per cent of the sum was collected from outside the Valley. Biratnagar came second to the capital.
Dr Bhattarai made an announcement for all those who did not come under the scheme.
“They have to pay a cumulative tax of 65 per cent, inclusive of penalty,” said the Finance Minister.
“We will prepare the defaulters’ list, which runs up to around 6,400 people, within the next three days. We will send letters to them, urging them to pay up soon. They will be booked if they fail to furnish sources of income and asset,” added Ghimire.
The Finance Ministry has managed to mop up Rs 1.51 billion, thanks to this scheme, that exceeds its minimum target of Rs 1 billion.
“Our records reveal that around 3,600 people have paid taxes after declaring their assets till today. However, we had compiled a list of 10,000 people,” said Kapil Dev Ghimire, director general, IRD.
The government extended the deadline by a month after the industry captains urged the former to accede to their request.
In the first phase, the government had managed to rake in Rs 1.42 billion. The original deadline had expired on February 11.
But, the extension came in handy for the government if the collections are anything to go by. It collected an additional Rs 467.8 million from 1,600 people.
Interestingly, a bulk of the people, who availed of the revised deadline, is realtors.
Finance Minister Dr Baburam Bhattrai has announced the scheme during his budget speech on September 19, 2008.
As per the VDIS, an individual can declare property that has no specific source of income. The tax payee has to cough up 10 per cent of the total cost of the asset to make it legitimate.
On the last day, a person paid a record Rs 4.7 million.
According to the IRD, only 15 per cent of the sum was collected from outside the Valley. Biratnagar came second to the capital.
Dr Bhattarai made an announcement for all those who did not come under the scheme.
“They have to pay a cumulative tax of 65 per cent, inclusive of penalty,” said the Finance Minister.
“We will prepare the defaulters’ list, which runs up to around 6,400 people, within the next three days. We will send letters to them, urging them to pay up soon. They will be booked if they fail to furnish sources of income and asset,” added Ghimire.
Finance Minister holds mid-term review meet
The government has received seven Letters of Intent (LoI) for the feasibility study of East-West Electric Railway Project, Finance Minister Dr Baburam Bhattarai said here today during a mid-term review of the budget.
Dr Bhattarai admitted that the government had failed to achieve targetted growth, but he claimed that the growth would reach close to the target. He had set a target of seven per cent growth, but the Central Bureau of Static's (CBS) -- based on the first six months' data -- has reduced Gross Domestic Product (GDP) to 3.8 per cent for this fiscal year.
CBS also claimed that the price hike would stand at 12.15 per cent, contrary to Dr Bhattarai's promise to reduce it to 7.5 per cent. Inflation is at 14.4 per cent in the first six months of this fiscal year, according to the bureau.
The government is working to change the Income Tax Act according to the changed context. "A three-member committee led by Surya Nath Upadhayay has been formed to study and give suggestions on the changes in the present Income Tax Act," Dr Bhattarai said.
Though things look bleak, he painted a rosy picture of the economy. "All macroeconomic indicators are encouraging," he said. "Revenue collection is encouraging and we will meet the target." While presenting his first budget, he had predicted revenue target growth by 31.77 per cent. "The treasury is in a comfortable position at Rs 25 billion surplus and the economy is sound," he claimed.
He also presented a list of achievements like increment in minimum wage of labourers, Bill passed for the Investment Promotion Board, planning of cooperative shops in villages, starting of self-employment scheme and preparation of draft for holding companies' manual.
Dr Bhattarai admitted that the government had failed to achieve targetted growth, but he claimed that the growth would reach close to the target. He had set a target of seven per cent growth, but the Central Bureau of Static's (CBS) -- based on the first six months' data -- has reduced Gross Domestic Product (GDP) to 3.8 per cent for this fiscal year.
CBS also claimed that the price hike would stand at 12.15 per cent, contrary to Dr Bhattarai's promise to reduce it to 7.5 per cent. Inflation is at 14.4 per cent in the first six months of this fiscal year, according to the bureau.
The government is working to change the Income Tax Act according to the changed context. "A three-member committee led by Surya Nath Upadhayay has been formed to study and give suggestions on the changes in the present Income Tax Act," Dr Bhattarai said.
Though things look bleak, he painted a rosy picture of the economy. "All macroeconomic indicators are encouraging," he said. "Revenue collection is encouraging and we will meet the target." While presenting his first budget, he had predicted revenue target growth by 31.77 per cent. "The treasury is in a comfortable position at Rs 25 billion surplus and the economy is sound," he claimed.
He also presented a list of achievements like increment in minimum wage of labourers, Bill passed for the Investment Promotion Board, planning of cooperative shops in villages, starting of self-employment scheme and preparation of draft for holding companies' manual.
Call for labour diplomacy
Experts today demanded labour diplomacy to empower, safeguard and expand the migrant labourers' market.
"The government should play the role of a watchdog," said Prof Tashlima Siddique from Dhaka University addressing an interaction programme, 'Women in Foreign Employment: Right or Wrong -- Experience from Bangladesh and Nepal' organised by Labour Journalists' Group, Nepal and NIDS here.
When male migrant workers are harassed, the government does not take any action. "But when a women migrant worker is harassed, it becomes a tool for the government to ban women migrant workers from having economic freedom," she said adding that the government should lift such bans and facilitate and inform women migrant workers to make it more secure for them.
"Nobody can dismiss women migrant workers' rights," social scientist Ganesh Gurung said adding that they should be given the option of informed choice.
"Women migrant workers should be trained and given orientation for better perks and safety before going out," the experts said while agreeing that the fates of Nepali and Bangladeshi women are not much different as both the countries' governments have similar attitudes towards women.
"Along with political freedom, economic freedom is a must for women empowerment," Gurung said adding that they not only contribute to the economy but also to bringing about change in society.
"Choice of profession is a personal matter," said Prof Siddiqi while sharing Bangladeshi experience on lifting the ban on women migrant workers. Both Bangladeshi and Nepali male migrant workers in Gulf countries have protested against sending women migrant workers asked their respective governments to ban women workers from going abroad.
There is a huge demand for women migrant workers but government officials are confused and they take decisions based on a single case, which cannot be a benchmark. "If the governments do not facilitate the women migrant workers, they will be trafficked and become more vulnerable," Prof Siddiqi and Gurung both said.
The Bangladesh government has put various restrictions on women migrant workers and so has the Nepal government, though in practice they have not banned them from going out.
"According to the Department of Foreign Employment (DoFE), there are only 40,000 women migrant workers. But the actual number is double," said Gurung.
Nepal's situation corresponds to that of Bangladesh. Every year 3,00,000 Nepalis enter the domestic labour market and 40 per cent of them are women. Nepal could not employ them all and finally they land up in the foreign labour market -- either legally or illegally.Prior to 1997, there was no any restriction on women migrant workers but Nepal put a ban on their going out in May 1997 after a woman Kami Sherpa's death in Saudi Arabia.
"The government should play the role of a watchdog," said Prof Tashlima Siddique from Dhaka University addressing an interaction programme, 'Women in Foreign Employment: Right or Wrong -- Experience from Bangladesh and Nepal' organised by Labour Journalists' Group, Nepal and NIDS here.
When male migrant workers are harassed, the government does not take any action. "But when a women migrant worker is harassed, it becomes a tool for the government to ban women migrant workers from having economic freedom," she said adding that the government should lift such bans and facilitate and inform women migrant workers to make it more secure for them.
"Nobody can dismiss women migrant workers' rights," social scientist Ganesh Gurung said adding that they should be given the option of informed choice.
"Women migrant workers should be trained and given orientation for better perks and safety before going out," the experts said while agreeing that the fates of Nepali and Bangladeshi women are not much different as both the countries' governments have similar attitudes towards women.
"Along with political freedom, economic freedom is a must for women empowerment," Gurung said adding that they not only contribute to the economy but also to bringing about change in society.
"Choice of profession is a personal matter," said Prof Siddiqi while sharing Bangladeshi experience on lifting the ban on women migrant workers. Both Bangladeshi and Nepali male migrant workers in Gulf countries have protested against sending women migrant workers asked their respective governments to ban women workers from going abroad.
There is a huge demand for women migrant workers but government officials are confused and they take decisions based on a single case, which cannot be a benchmark. "If the governments do not facilitate the women migrant workers, they will be trafficked and become more vulnerable," Prof Siddiqi and Gurung both said.
The Bangladesh government has put various restrictions on women migrant workers and so has the Nepal government, though in practice they have not banned them from going out.
"According to the Department of Foreign Employment (DoFE), there are only 40,000 women migrant workers. But the actual number is double," said Gurung.
Nepal's situation corresponds to that of Bangladesh. Every year 3,00,000 Nepalis enter the domestic labour market and 40 per cent of them are women. Nepal could not employ them all and finally they land up in the foreign labour market -- either legally or illegally.Prior to 1997, there was no any restriction on women migrant workers but Nepal put a ban on their going out in May 1997 after a woman Kami Sherpa's death in Saudi Arabia.
Thursday, March 12, 2009
Forbes Rich List 2009
Forbes has released its annual list of the world’s richest people, and it’s a bit smaller than usual. The number of billionaires in the world has dropped from 1,125 last year to only 793 now, the publication reports, and the average net worth among them has fallen 23 per cent to a measly $3 billion.
Even Bill Gates took a hit, Forbes’ list reports, with his worth dropping a full $18 billion to $40 billion total. Even with the loss, though, Gates moved back into the top spot he had previously lost, as previous richest man Warren Buffett suffered a substantial slide of his own: Buffett lost $25 billion, Forbes says, as his Berkshire Hathaway shares fell almost by 50 per cent over the past year.
Here’s your top 12 and their current net worth, according to Forbes’ rich list of billionaires in 2009.
Forbes Billionaires 2009
1. Bill Gates — $40 billion
2. Warren Buffett — $37 billion
3. Carlos Slim Helu and family — $35 billion
4. Lawrence Ellison — $22.5 billion
5. Ingvar Kamprad and family — $22 billion
6. Karl Albrecht — $21.5 billion
7. Mukesh Ambani — $19.5 billion
8. Lakshmi Mittal — $19.3 billion
9. Theo Albrecht — $18.8 billion
10. Amancio Ortega — $18.3 billion
11. Jim Walton — $17.8 billion
12 (tie). Alice Walton — $17.6 billion
12 (tie). Christy Walton and family — $17.6 billion
12 (tie). S. Robson Walton — $17.6 billion
Asian Rich List
Two dozen Indians made it to the Forbes list of ‘World's Richest’ with four of them among the top 10, as Warren Buffett dethroned Microsoft co-founder Bill Gates, who held the top slot for 13 straight years.
Steel czar Lakshmi Mittal, heading the world's largest steelmaker ArcelorMittal, is in the fourth place with a personal fortune of $45 billion. A long-time resident of London, he is also Europe's richest resident, notes the US business magazine.
Next comes Mukesh Ambani, "Asia's richest resident, who heads petrochemicals giant Reliance Industries, India's most valuable company by market cap" with $43 billion.
The year's biggest gainer, Anil Ambani, is in the sixth place with a fortune of $42 billion. He is up $23.8 billion in the past year, and is closing the gap with his estranged brother Mukesh.
K P Singh, now the world's richest real estate baron after listing his real estate development company DLF in 2007, takes the eighth place in the list with $30 billion. Declaring Buffett as the richest man on the planet, Forbes said, "Riding the surging price of Berkshire Hathaway stock, America's most beloved investor has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago."
That massive pile of scratch puts him ahead of Gates, who is now worth $58 billion and is ranked third in the world after Mexican telecom tycoon Carlos Slim Helú with an estimated net worth of $60 billion.
The other 20 Indians in the billionaires list are Shashi and Ravi Ruia (43), Azim Premji (60), Sunil Mittal and family (64), Kumar Birla (76), Ramesh Chandra (86), Gautam Adani (91), Savitri Jindal and family (110), Anil Agarwal (164), Adi Godrej and family (178), G.M. Rao (198), Indu Jain (236), Dilip Shanghvi (260), Jaiprakash Gaur (277), Shiv Nadar (277), Uday Kotak (288), Cyrus Poonawalla (307), Anand Jain (327), Chandru Raheja (368), Tulsi Tanti (368) and Rakesh Wadhawan and family (428).
The Forbes list also mentions two Indians, Gautam Adani ($9.3 billion) and Sameer Gehlaut ($1.2 billion), as "notable billionaires".
"Adani is a college dropout who spurned his father's textile trading business to seek his own fortune... Today he is Asia's richest newcomer thanks to two big public holdings, Adani Enterprises, and Mundra Port, one of India's first private-sector ports," it says. "India's youngest self-made billionaire, Gehlaut" is an engineer from the elite Indian Institute of Technology, Delhi. He started online brokerage Indiabulls with two college friends in 1999. He still heads the company and is its largest shareholder.
A few young tycoons were able to make money this past year in the face of financial turmoil, Forbes said. Among them Indian pharmaceutical kings Malvinder and Shivinder Singh added $100 million to their combined net worth. --Indo-Asian News Service
Even Bill Gates took a hit, Forbes’ list reports, with his worth dropping a full $18 billion to $40 billion total. Even with the loss, though, Gates moved back into the top spot he had previously lost, as previous richest man Warren Buffett suffered a substantial slide of his own: Buffett lost $25 billion, Forbes says, as his Berkshire Hathaway shares fell almost by 50 per cent over the past year.
Here’s your top 12 and their current net worth, according to Forbes’ rich list of billionaires in 2009.
Forbes Billionaires 2009
1. Bill Gates — $40 billion
2. Warren Buffett — $37 billion
3. Carlos Slim Helu and family — $35 billion
4. Lawrence Ellison — $22.5 billion
5. Ingvar Kamprad and family — $22 billion
6. Karl Albrecht — $21.5 billion
7. Mukesh Ambani — $19.5 billion
8. Lakshmi Mittal — $19.3 billion
9. Theo Albrecht — $18.8 billion
10. Amancio Ortega — $18.3 billion
11. Jim Walton — $17.8 billion
12 (tie). Alice Walton — $17.6 billion
12 (tie). Christy Walton and family — $17.6 billion
12 (tie). S. Robson Walton — $17.6 billion
Asian Rich List
Two dozen Indians made it to the Forbes list of ‘World's Richest’ with four of them among the top 10, as Warren Buffett dethroned Microsoft co-founder Bill Gates, who held the top slot for 13 straight years.
Steel czar Lakshmi Mittal, heading the world's largest steelmaker ArcelorMittal, is in the fourth place with a personal fortune of $45 billion. A long-time resident of London, he is also Europe's richest resident, notes the US business magazine.
Next comes Mukesh Ambani, "Asia's richest resident, who heads petrochemicals giant Reliance Industries, India's most valuable company by market cap" with $43 billion.
The year's biggest gainer, Anil Ambani, is in the sixth place with a fortune of $42 billion. He is up $23.8 billion in the past year, and is closing the gap with his estranged brother Mukesh.
K P Singh, now the world's richest real estate baron after listing his real estate development company DLF in 2007, takes the eighth place in the list with $30 billion. Declaring Buffett as the richest man on the planet, Forbes said, "Riding the surging price of Berkshire Hathaway stock, America's most beloved investor has seen his fortune swell to an estimated $62 billion, up $10 billion from a year ago."
That massive pile of scratch puts him ahead of Gates, who is now worth $58 billion and is ranked third in the world after Mexican telecom tycoon Carlos Slim Helú with an estimated net worth of $60 billion.
The other 20 Indians in the billionaires list are Shashi and Ravi Ruia (43), Azim Premji (60), Sunil Mittal and family (64), Kumar Birla (76), Ramesh Chandra (86), Gautam Adani (91), Savitri Jindal and family (110), Anil Agarwal (164), Adi Godrej and family (178), G.M. Rao (198), Indu Jain (236), Dilip Shanghvi (260), Jaiprakash Gaur (277), Shiv Nadar (277), Uday Kotak (288), Cyrus Poonawalla (307), Anand Jain (327), Chandru Raheja (368), Tulsi Tanti (368) and Rakesh Wadhawan and family (428).
The Forbes list also mentions two Indians, Gautam Adani ($9.3 billion) and Sameer Gehlaut ($1.2 billion), as "notable billionaires".
"Adani is a college dropout who spurned his father's textile trading business to seek his own fortune... Today he is Asia's richest newcomer thanks to two big public holdings, Adani Enterprises, and Mundra Port, one of India's first private-sector ports," it says. "India's youngest self-made billionaire, Gehlaut" is an engineer from the elite Indian Institute of Technology, Delhi. He started online brokerage Indiabulls with two college friends in 1999. He still heads the company and is its largest shareholder.
A few young tycoons were able to make money this past year in the face of financial turmoil, Forbes said. Among them Indian pharmaceutical kings Malvinder and Shivinder Singh added $100 million to their combined net worth. --Indo-Asian News Service
Security to escort petroleum products in the Valley
Security agencies will escort the tankers bringing petroleum products from Raxaul to Kathmandu tomorrow.
A meeting of government agencies, Nepal Oil Corporation (NOC) and representatives of security agencies in Hetauda today decided to rush the oil tankers to the capital under police escort, said NOC deputy managing director Bachhu Kumar Kafle from Hetauda, where he -- alongwith Digambar Jha, managing director of NOC -- is attending the meeting.
Due to the ongoing Terai bandh called by the Tharuhat Joint Struggle Committee since the last 11 days, the valley has run out of petroleum products -- especially petrol -- leaving the government no option but bring in the oil tankers under police escort. "To ensure smooth supply of petroleum products in the capital, we have decided to escort the oil tankers that are ready to move from Raxual," he said adding that the tankers will start tomorrow evening and reach the valley the day after.
According to NOC, the current of stock of diesel is sufficient for another 15 days, kerosene for a month but stock of petrol is diminishing by the day.
While the stock of other petroleum products -- cooking gas and diesel -- is also diminishing, the petrol scarcity has become acute. Only the institutional petrol pumps -- like those of Nepal Army, Nepal Police and Sajha Yatayat -- are distributing petrol in the capital. The result: long queues can seen in front of these 10 petrol pumps. Altogether, there are 114 retail dealers in the valley. The nationwide count stands at 2,403.
The state-run oil supply monopoly has halted the distribution of petroleum products to private petrol pumps since Monday due to low stock.
NOC boasts of a cumulative storage capacity of 71,742.3 kl of petroleum products that last for a month only. It has a storage capacity of 6,300 kl of diesel and kerosene each and 7,640 ATFs in the capital.
A meeting of government agencies, Nepal Oil Corporation (NOC) and representatives of security agencies in Hetauda today decided to rush the oil tankers to the capital under police escort, said NOC deputy managing director Bachhu Kumar Kafle from Hetauda, where he -- alongwith Digambar Jha, managing director of NOC -- is attending the meeting.
Due to the ongoing Terai bandh called by the Tharuhat Joint Struggle Committee since the last 11 days, the valley has run out of petroleum products -- especially petrol -- leaving the government no option but bring in the oil tankers under police escort. "To ensure smooth supply of petroleum products in the capital, we have decided to escort the oil tankers that are ready to move from Raxual," he said adding that the tankers will start tomorrow evening and reach the valley the day after.
According to NOC, the current of stock of diesel is sufficient for another 15 days, kerosene for a month but stock of petrol is diminishing by the day.
While the stock of other petroleum products -- cooking gas and diesel -- is also diminishing, the petrol scarcity has become acute. Only the institutional petrol pumps -- like those of Nepal Army, Nepal Police and Sajha Yatayat -- are distributing petrol in the capital. The result: long queues can seen in front of these 10 petrol pumps. Altogether, there are 114 retail dealers in the valley. The nationwide count stands at 2,403.
The state-run oil supply monopoly has halted the distribution of petroleum products to private petrol pumps since Monday due to low stock.
NOC boasts of a cumulative storage capacity of 71,742.3 kl of petroleum products that last for a month only. It has a storage capacity of 6,300 kl of diesel and kerosene each and 7,640 ATFs in the capital.
Sri Lankan experience on foreign employment
Sri Lankan experiences and initiatives can be helpful in safeguarding the lives of Nepalis migrant workers, participants in an interaction said here today. The Sri Lanka Bureau of Foreign Employment (SLBFE) has various schemes like training, insurance, loan, health and education facilities targeting migrant workers and their families.
Insurance is mandatory for migrant workers, said Kodd Fernando, deputy general manager at the Sri Lanka Bureau of Foreign Employment.
SLBFE provides special assistance to those not covered through the insurance scheme. Likewise, the Sri Lankan government provides different loan schemes like pre-departure loan, housing loan and self-employment loan to migrant workers and their families, he added.
Sri Lanka gives a package of training and counseling on safety, friendly migration, protection against and prevention of HIV/AIDS and family management before migrant workers depart. It also has a pension scheme for migrant workers which it operates through the Social Security Board (SSB).
The Sri Lankan government takes responsibility for the children of migrant workers. They get scholarships in lower classes and loans for higher studies.
Insurance is mandatory for migrant workers, said Kodd Fernando, deputy general manager at the Sri Lanka Bureau of Foreign Employment.
SLBFE provides special assistance to those not covered through the insurance scheme. Likewise, the Sri Lankan government provides different loan schemes like pre-departure loan, housing loan and self-employment loan to migrant workers and their families, he added.
Sri Lanka gives a package of training and counseling on safety, friendly migration, protection against and prevention of HIV/AIDS and family management before migrant workers depart. It also has a pension scheme for migrant workers which it operates through the Social Security Board (SSB).
The Sri Lankan government takes responsibility for the children of migrant workers. They get scholarships in lower classes and loans for higher studies.
Wednesday, March 11, 2009
GDP growth estimation at 3.8 per cent
The government's projection of seven per cent gross domestic growth (GDP) seems to be a pipe-dream, thanks to regular power outage, nationwide protest programmes and labour disputes.
According to the Central Bureau of Static’s (CBS) report, based on the first six months’ data, the Gross Domestic Product (GDP) will grow by 3.8 per cent during this current fiscal. The national data bank has estimated the preliminary GDP at basic prices to grow by 3.8 per cent and at producer price to multiply at 4.66 per cent.
As per the Asian Development Bank (ADB), the GDP’s growth is pegged at 3.5 per cent.
The lower projection debunks Finance Minister Dr Baburam Bhattarai’s tall claims. “The GDP growth is estimated to be at seven per cent," he had said while presenting his first budget on September 19.
Similarly, the CBS report has reduced the government's projection of growth in agriculture and non-agriculture sector by half. The agriculture sector will now witness a growth of 2.13 and 4.81 per cent, respectively.
While, the government’s ambitious figures were 4.5 and 8.3 per cent, respectively, as the budget speech bore out. The adverse weather conditions have pulled it down. Agriculture accounts for 32.35 per cent of the GDP.
Electricity, gas and water sectors will see negative growth of 1.06 per cent. Ditto for the manufacturing sector — the largest employer after the agricultural sector. It will be in red by 0.5 per cent.
Incidentally, these sectors were growing by 3.73 and 0.18, per cent, respectively, in the last fiscal year.
But, there is boom amid the doom as well. Transport, communication and storage industries are growing by 7.84 per cent, thanks to the spurt in communication.
Meanwhile, the GDP deflector predicts inflation at 12.15 per cent. The government, however, had factored in only 7.5 per cent. According to the last fiscal year’s revised GDP, it stands at 5.26 per cent.
In 1961-62, the CBS first published the estimated growth. “But only from 1964-65, it started publishing report regularly,” according to Suman Aryal, statiscal officer at the CBS that is planning to publish the report quarterly from next fiscal year.
According to the Central Bureau of Static’s (CBS) report, based on the first six months’ data, the Gross Domestic Product (GDP) will grow by 3.8 per cent during this current fiscal. The national data bank has estimated the preliminary GDP at basic prices to grow by 3.8 per cent and at producer price to multiply at 4.66 per cent.
As per the Asian Development Bank (ADB), the GDP’s growth is pegged at 3.5 per cent.
The lower projection debunks Finance Minister Dr Baburam Bhattarai’s tall claims. “The GDP growth is estimated to be at seven per cent," he had said while presenting his first budget on September 19.
Similarly, the CBS report has reduced the government's projection of growth in agriculture and non-agriculture sector by half. The agriculture sector will now witness a growth of 2.13 and 4.81 per cent, respectively.
While, the government’s ambitious figures were 4.5 and 8.3 per cent, respectively, as the budget speech bore out. The adverse weather conditions have pulled it down. Agriculture accounts for 32.35 per cent of the GDP.
Electricity, gas and water sectors will see negative growth of 1.06 per cent. Ditto for the manufacturing sector — the largest employer after the agricultural sector. It will be in red by 0.5 per cent.
Incidentally, these sectors were growing by 3.73 and 0.18, per cent, respectively, in the last fiscal year.
But, there is boom amid the doom as well. Transport, communication and storage industries are growing by 7.84 per cent, thanks to the spurt in communication.
Meanwhile, the GDP deflector predicts inflation at 12.15 per cent. The government, however, had factored in only 7.5 per cent. According to the last fiscal year’s revised GDP, it stands at 5.26 per cent.
In 1961-62, the CBS first published the estimated growth. “But only from 1964-65, it started publishing report regularly,” according to Suman Aryal, statiscal officer at the CBS that is planning to publish the report quarterly from next fiscal year.
No let-up in price hike
The month of February witnessed rise in prices of musuro (broken lentil), rice and mustard oil whereas the price of chicken -- again due to the bird flu scare -- decreased.
The recent cases of bird flu in the Eastern Terai have resulted in falling chicken prices across the country. In Kathmandu, the price of chicken fell by almost 25 per cent in February, said a Market Watch report prepared by World Food Programme (WFP) in association with Consumer Interest Protection Group, Federation of Nepalese Chambers of Commerce and Industry, Ministry of Agriculture and Cooperatives' Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate.
The price of musuro (broken lentil) increased by three per cent this month -- most noticeable in Terai markets where prices increased on average by more than 10 per cent, said the report. Rice prices increased marginally and are expected to continue to gradually increase until the paddy harvest in November.
"The seasonal downward trend in the price of rice has ended as prices are three per cent higher than last month and are still expected to gradually increase until the next harvest season in November," the report claimed.
Soybean oil prices remained largely stable while mustard oil prices increased in line with seasonal expectations (up by six per cent). Compared to last year, prices are up by 22 per cent and 27 per cent respectively. Meanwhile, wheat prices also remained largely stable and are only marginally higher than last year -- up by four per cent.
The government has begun selling key food items including rice, wheat and sugar in response to reported carteling by major food wholesellers. The government has claimed that it is selling food items in major consumer markets at around 15 per cent less than the wholesellers. "However, this is not expected to have a major impact on overall prices as the quantity is relatively small," said the report.
In an attempt to control the rapidly increasing cost of sugar, the government is reportedly considering importing up to 50,000 MT from India. If this occurs, then the increased supply will likely reduce the price of sugar that has increased by over 37 per cent between 2008 and 2009.
During February, Nepal Oil Corporation -- the state-run sole petroleum products' supplier -- marginally lowered the cost of petrol to Rs 77 (down by three rupees) and diesel to Rs 57.50.
However, according to a WFP Market Traders Survey conducted in late 2008, only 37 per cent of traders believe transportation costs have reduced from peak rates experienced in the first half of 2008. High transportation costs will continue to keep market prices inflated across the country unless price reductions are fully passed on by transporters.
The recent cases of bird flu in the Eastern Terai have resulted in falling chicken prices across the country. In Kathmandu, the price of chicken fell by almost 25 per cent in February, said a Market Watch report prepared by World Food Programme (WFP) in association with Consumer Interest Protection Group, Federation of Nepalese Chambers of Commerce and Industry, Ministry of Agriculture and Cooperatives' Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate.
The price of musuro (broken lentil) increased by three per cent this month -- most noticeable in Terai markets where prices increased on average by more than 10 per cent, said the report. Rice prices increased marginally and are expected to continue to gradually increase until the paddy harvest in November.
"The seasonal downward trend in the price of rice has ended as prices are three per cent higher than last month and are still expected to gradually increase until the next harvest season in November," the report claimed.
Soybean oil prices remained largely stable while mustard oil prices increased in line with seasonal expectations (up by six per cent). Compared to last year, prices are up by 22 per cent and 27 per cent respectively. Meanwhile, wheat prices also remained largely stable and are only marginally higher than last year -- up by four per cent.
The government has begun selling key food items including rice, wheat and sugar in response to reported carteling by major food wholesellers. The government has claimed that it is selling food items in major consumer markets at around 15 per cent less than the wholesellers. "However, this is not expected to have a major impact on overall prices as the quantity is relatively small," said the report.
In an attempt to control the rapidly increasing cost of sugar, the government is reportedly considering importing up to 50,000 MT from India. If this occurs, then the increased supply will likely reduce the price of sugar that has increased by over 37 per cent between 2008 and 2009.
During February, Nepal Oil Corporation -- the state-run sole petroleum products' supplier -- marginally lowered the cost of petrol to Rs 77 (down by three rupees) and diesel to Rs 57.50.
However, according to a WFP Market Traders Survey conducted in late 2008, only 37 per cent of traders believe transportation costs have reduced from peak rates experienced in the first half of 2008. High transportation costs will continue to keep market prices inflated across the country unless price reductions are fully passed on by transporters.
Govt not to probe investment in productive sectors
As the deadline for Voluntary Disclosure of Income Sources (VDIS) approaches nearer the business community is busy holding talks with Prime Minister Pushpa Kamal Dahal 'Prachanda' and Finance Minister Dr Baburam Bhattarai to resolve the issue of investigation into the sources of investments. Though the community was of the view that government define investment logistics, the government has assured it that sources of investment in hydropower and other productive sectors will not be investigated.
The extended VDIS deadline is March 14 -- just three days away.
In the talks between PM 'Prachanda' and the business community led by the Nepali private sector's umbrella organisation Federation of Nepalese Chamber of Commerce (FNCCI) president Kush Kujmar Joshi here today, private sector industry captains repeated their concern over the propopsed investigation into past investments that are already in the tax net.
Finance Minister Dr Bhattarai, who was also present in the meeting with the business community's Confederation of Nepalese Industrialists (CNI), Nepal Chambers of Commerce (NCC), Hotel Association of Nepal (HAN), Nepal Export and Import Association (NEIA), Nepal Bankers' Association (NBA) and FNCCI, said that the government had brought the VDIS scheme to stop capital flight. "The government will not investigate sources of investment in hydropower and productive sectors," he assured.
"The government will bring relief packages to make an investment-friendly environment and promote more investment," Prime Minister 'Prachanda' said.
Meanwhile, another group of industrialists -- in a separate meeting with Finance Minister Dr Bhattarai -- demanded the government take action against to those who do not come under VDIS. A group of industrialists led by Krishna Acharya, president of Nepal National Industries and Business Association asked Dr Bhattarai to punish those who have amassed illegal money and protect the law-abiding ones. Dr Bhattarai assured them that the government would start taking strong action against evaders after March 14.
He said that the government would apply the soft touch in those investments that employ Nepali labourers and are export-oriented. "The government is planning to honour taxpayers from the next fiscal year," he added.
Inland Revenue Department director general Kapil Dev Ghimire said that the department was collecting information about those who have amassed illegal wealth but have not yet come under VDIS.
The government was successful in collecting Rs 1.42 billion -- according to its target -- till the first deadline of February 11 but after the deadline extension for one more month till March 14, the collection is not worth mentioning.
The extended VDIS deadline is March 14 -- just three days away.
In the talks between PM 'Prachanda' and the business community led by the Nepali private sector's umbrella organisation Federation of Nepalese Chamber of Commerce (FNCCI) president Kush Kujmar Joshi here today, private sector industry captains repeated their concern over the propopsed investigation into past investments that are already in the tax net.
Finance Minister Dr Bhattarai, who was also present in the meeting with the business community's Confederation of Nepalese Industrialists (CNI), Nepal Chambers of Commerce (NCC), Hotel Association of Nepal (HAN), Nepal Export and Import Association (NEIA), Nepal Bankers' Association (NBA) and FNCCI, said that the government had brought the VDIS scheme to stop capital flight. "The government will not investigate sources of investment in hydropower and productive sectors," he assured.
"The government will bring relief packages to make an investment-friendly environment and promote more investment," Prime Minister 'Prachanda' said.
Meanwhile, another group of industrialists -- in a separate meeting with Finance Minister Dr Bhattarai -- demanded the government take action against to those who do not come under VDIS. A group of industrialists led by Krishna Acharya, president of Nepal National Industries and Business Association asked Dr Bhattarai to punish those who have amassed illegal money and protect the law-abiding ones. Dr Bhattarai assured them that the government would start taking strong action against evaders after March 14.
He said that the government would apply the soft touch in those investments that employ Nepali labourers and are export-oriented. "The government is planning to honour taxpayers from the next fiscal year," he added.
Inland Revenue Department director general Kapil Dev Ghimire said that the department was collecting information about those who have amassed illegal wealth but have not yet come under VDIS.
The government was successful in collecting Rs 1.42 billion -- according to its target -- till the first deadline of February 11 but after the deadline extension for one more month till March 14, the collection is not worth mentioning.
Tuesday, March 10, 2009
Forex reserve swells
The central bank has confortable forex reserve that can finance merchandise imports of almost a year.
"The current level of reserves are sufficient for financing merchandise imports of 11.4 months and merchandise and service imports of 9.1 months," according to the current macro-economic report published by the central bank and based on the first six months of the current fiscal year.
In mid-January 2009 the gross foreign exchange reserves aggregated Rs 254.5 billion, an upsurge by 19.7 per cent compared to the level as at mid-July 2008. The central bank in its report said that in the corresponding period of last fiscal year, such reserves had declined by 0.2 per cent.
On the basis of US dollar, gross foreign exchange reserves rose by 5.5 per cent to $3.27 billion in the first six months of this current fiscal year, said the report of the Nepal Rastra Bank (NRB). Such reserves had increased by 2.9 per cent in the same period in the last fiscal year.
Remittance is one of the key component in the increment in forex reserve. It contributes to 50 per cent of the total foreign currency earnings contrary to a popular belief that tourism, carpet or the readymade garments (RMG) sector is the largest foreign currency earner.
The report claimed that the migrant workers' remittance has also increased by 65.3 per cent in the first six months of 2008-09 compared to the growth of 18.2 per cent in the corresponding period of the previous year.
"The current level of reserves are sufficient for financing merchandise imports of 11.4 months and merchandise and service imports of 9.1 months," according to the current macro-economic report published by the central bank and based on the first six months of the current fiscal year.
In mid-January 2009 the gross foreign exchange reserves aggregated Rs 254.5 billion, an upsurge by 19.7 per cent compared to the level as at mid-July 2008. The central bank in its report said that in the corresponding period of last fiscal year, such reserves had declined by 0.2 per cent.
On the basis of US dollar, gross foreign exchange reserves rose by 5.5 per cent to $3.27 billion in the first six months of this current fiscal year, said the report of the Nepal Rastra Bank (NRB). Such reserves had increased by 2.9 per cent in the same period in the last fiscal year.
Remittance is one of the key component in the increment in forex reserve. It contributes to 50 per cent of the total foreign currency earnings contrary to a popular belief that tourism, carpet or the readymade garments (RMG) sector is the largest foreign currency earner.
The report claimed that the migrant workers' remittance has also increased by 65.3 per cent in the first six months of 2008-09 compared to the growth of 18.2 per cent in the corresponding period of the previous year.
Rupee depreciates
Nepali rupee is loosing its ground as it has slipped to a record low of Rs 83.40 per dollar lat Tuesday. Though it is at Rs 83.05 per dollar on Tuesday, it was at Rs 77.75 in the mid-January. In comparison to mid-July 2008, the Nepali currency vis-à-vis the US dollar depreciated by 11.9 per cent in mid-January 2009, said the NRB.
"It had appreciated by 3.1 per cent in the corresponding period of the last fiscal year. The exchange rate of one US dollar stood at Rs 77.75 in mid-January 2009 compared to Rs 68.50 in mid-July 2008." Indian ruppes that is pegged to Nepali rupee has slipped dragging the Nepali rupees down. The rupee against dollar has depreciated by around seven per cent in 2009 and 28.5 per cent in comparison to the exchange rate a year ago.Any volatility in the Indian currency market directly affects Nepali rupee vis-à-vis the US dollar due to direct relation between the Nepali and Indian rupee. The Indian rupee is hovering around Rs 52 per dollar. However, price of gold is again rising in the international market due to heavy fall in the share markets.
"It had appreciated by 3.1 per cent in the corresponding period of the last fiscal year. The exchange rate of one US dollar stood at Rs 77.75 in mid-January 2009 compared to Rs 68.50 in mid-July 2008." Indian ruppes that is pegged to Nepali rupee has slipped dragging the Nepali rupees down. The rupee against dollar has depreciated by around seven per cent in 2009 and 28.5 per cent in comparison to the exchange rate a year ago.Any volatility in the Indian currency market directly affects Nepali rupee vis-à-vis the US dollar due to direct relation between the Nepali and Indian rupee. The Indian rupee is hovering around Rs 52 per dollar. However, price of gold is again rising in the international market due to heavy fall in the share markets.
Asia hosts the world's cheapest and most expensive cities
Seoul (Korea Newswire): The latest Economist Intelligence Unit cost of living survey highlights the way in which sharp shifts in exchange rates in recent months have altered the relative cost of living in cities around the world.
By comparing the ranking of cities in September 2008 (when the price survey was conducted) to the ranking in February 2009 (adjusting the September price data for recent exchange-rate movements), it is possible to see which locations have been relative winners or losers as a result of the currency dislocation.
Asia: Home to the cheapest and most expensive
The impact on the ranking of Asian cities of rebasing the survey to February 2009 exchange rates is very mixed, as the region plays host to countries with the most and the least expensive cost of living in the survey. Cities in Australia and New Zealand have seen dramatic falls of between 21 and 25 index points. Conversely a stronger yen now means that the Japanese cities of Tokyo and Osaka have become the most expensive cities in our survey. The Chinese renminbi is tightly linked to the US dollar, which means that the relative cost of living in Chinese cities has risen as the currencies of other countries fall. Shanghai, with a cost of living that is only two per cent cheaper than New York, is now more expensive than Sydney (Australia), which is eight per cent cheaper. Asia is home to many of the least expensive cities in the world, supplying five of the ten cheapest locations in the survey, four of which hail from the Indian subcontinent. Manila (Philippines), in 126th position, joins Kathmandu, New Delhi, Mumbai and Karachi.
The cost of living in Manila is half that of New York, whereas that in Karachi, the cheapest city in the survey, is just over one-third of that of New York.
Global round-up
Oslo (Norway), previously the most expensive city, has fallen to fifth place, below Paris (France) and Copenhagen (Denmark). London (UK), originally ranked eighth, has slid dramatically in line with a weak sterling to joint 27th position, below New York (US) for the first time since 2002. Reykjavik (Iceland), one of the early casualties of the current global malaise, was the fifth most expensive city last year. It fell to 39th using exchange rates from September 2008, but by February this year had fallen to 67th in the ranking.
Jon Copestake, editor of the report, comments, "Two factors drive the relative cost of living: local prices and exchange rates. Normally our ranking of cities by cost of living is relatively stable, but in the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities."
The main changes in the ranking, achieved by applying February 2009 exchange rates to the original price data collated in September 2008, occur among the most expensive cities. The decline of European currencies, most notably the euro, sterling and the Norwegian krone, has driven a significant weakening in the relative cost of living for many European cities. West European cities still dominate the top ten worldwide, with just three cities (Tokyo, Osaka and Singapore) from outside Europe. Nevertheless, the cost of living gap has closed. The strong US dollar has meant that cities in the United States, along with any country that pegs its currency to the dollar, have jumped in the ranking.
New York, Los Angeles and Chicago have risen from joint 39th to joint 23rd position, and Hong Kong has risen by 17 places to 11th in the ranking. Much less affected are the lower-cost locations in the world.
The cheapest ones: Kathmandu ranks 128th
The cheapest cities in the survey remain predominantly Asian, with four of the bottom five hailing from the Indian subcontinent: Kathmandu (Nepal), 128th; New Delhi and Mumbai (India), 129th and 130th respectively; and Karachi (Pakistan), 132nd.
This survey compares the original findings of the September 2008 cost of living survey to those at February 2009 exchange rates. For the purposes of this release it is assumed that local prices have not moved between September, when the survey took place, and February when the new exchange rates were applied. The customisation of exchange rates is a standard feature of the worldwide cost of living survey to account for fluctuations like those seen in recent months. Worldwide Cost of Living, the bi-annual Economist Intelligence Unit survey, compares prices and products in 140 cities around the world.
Its purpose is to provide companies with an unbiased and independent guide from which allowances can be calculated for executives and their families being sent overseas. The Economist Intelligence Unit can calculate indices based on any one of the cities. The data quoted here used New York as a base index of 100 for comparisons.
About the Economist Intelligence Unit The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist.
Economist Intelligence Unit Worldwide Cost Of Living 2009
By comparing the ranking of cities in September 2008 (when the price survey was conducted) to the ranking in February 2009 (adjusting the September price data for recent exchange-rate movements), it is possible to see which locations have been relative winners or losers as a result of the currency dislocation.
Asia: Home to the cheapest and most expensive
The impact on the ranking of Asian cities of rebasing the survey to February 2009 exchange rates is very mixed, as the region plays host to countries with the most and the least expensive cost of living in the survey. Cities in Australia and New Zealand have seen dramatic falls of between 21 and 25 index points. Conversely a stronger yen now means that the Japanese cities of Tokyo and Osaka have become the most expensive cities in our survey. The Chinese renminbi is tightly linked to the US dollar, which means that the relative cost of living in Chinese cities has risen as the currencies of other countries fall. Shanghai, with a cost of living that is only two per cent cheaper than New York, is now more expensive than Sydney (Australia), which is eight per cent cheaper. Asia is home to many of the least expensive cities in the world, supplying five of the ten cheapest locations in the survey, four of which hail from the Indian subcontinent. Manila (Philippines), in 126th position, joins Kathmandu, New Delhi, Mumbai and Karachi.
The cost of living in Manila is half that of New York, whereas that in Karachi, the cheapest city in the survey, is just over one-third of that of New York.
Global round-up
Oslo (Norway), previously the most expensive city, has fallen to fifth place, below Paris (France) and Copenhagen (Denmark). London (UK), originally ranked eighth, has slid dramatically in line with a weak sterling to joint 27th position, below New York (US) for the first time since 2002. Reykjavik (Iceland), one of the early casualties of the current global malaise, was the fifth most expensive city last year. It fell to 39th using exchange rates from September 2008, but by February this year had fallen to 67th in the ranking.
Jon Copestake, editor of the report, comments, "Two factors drive the relative cost of living: local prices and exchange rates. Normally our ranking of cities by cost of living is relatively stable, but in the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities."
The main changes in the ranking, achieved by applying February 2009 exchange rates to the original price data collated in September 2008, occur among the most expensive cities. The decline of European currencies, most notably the euro, sterling and the Norwegian krone, has driven a significant weakening in the relative cost of living for many European cities. West European cities still dominate the top ten worldwide, with just three cities (Tokyo, Osaka and Singapore) from outside Europe. Nevertheless, the cost of living gap has closed. The strong US dollar has meant that cities in the United States, along with any country that pegs its currency to the dollar, have jumped in the ranking.
New York, Los Angeles and Chicago have risen from joint 39th to joint 23rd position, and Hong Kong has risen by 17 places to 11th in the ranking. Much less affected are the lower-cost locations in the world.
The cheapest ones: Kathmandu ranks 128th
The cheapest cities in the survey remain predominantly Asian, with four of the bottom five hailing from the Indian subcontinent: Kathmandu (Nepal), 128th; New Delhi and Mumbai (India), 129th and 130th respectively; and Karachi (Pakistan), 132nd.
This survey compares the original findings of the September 2008 cost of living survey to those at February 2009 exchange rates. For the purposes of this release it is assumed that local prices have not moved between September, when the survey took place, and February when the new exchange rates were applied. The customisation of exchange rates is a standard feature of the worldwide cost of living survey to account for fluctuations like those seen in recent months. Worldwide Cost of Living, the bi-annual Economist Intelligence Unit survey, compares prices and products in 140 cities around the world.
Its purpose is to provide companies with an unbiased and independent guide from which allowances can be calculated for executives and their families being sent overseas. The Economist Intelligence Unit can calculate indices based on any one of the cities. The data quoted here used New York as a base index of 100 for comparisons.
About the Economist Intelligence Unit The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist.
Economist Intelligence Unit Worldwide Cost Of Living 2009
Monday, March 9, 2009
Valley petrol pumps again left high and dry
The petrol pumps in the Valley are once again running dry. The irritant is not hard to seek. It is the ubiquitous constraints in supply.
Nepal Oil Corporation (NOC) — the state-run sole petroleum supplier — has been hit hard by the diminishing stock of petrol.
"We haven’t been able to ferry the petroleum products from Amlekhgunj Depot in Bara due to the ongoing stir,” said Digambar Jha, managing director, NOC.
“If the current uncertainty persists in Chitwan, then the crisis is likely to deepen. We have stock for only two days,” he added.
The Valley requires 300 kilolitres (kl) of petrol daily. But, NOC’s storage capacity is only 2,630 kl, which is adequate for only eight days. The protest of Tharu community blocking the highways has entered into the eighth day today forcing the NOC to curtail the supply.
“Though the petrol stock is alarmingly low, there is no immediate cause for concern for Air Turbine Fuel (ATF), diesel and cooking gas," he said.
According to Nepal Petroleum Dealers Association (NPDA), NOC today managed to distribute petrol to only 10 institutional petrol pumps that belong to Nepali Army, Police and Sajha.
Altogether, there are 114 retail dealers in the Valley. While, the nationwide count stands at 2,403.
NOC boasts of a cumulative storage capacity of 71,742.3 kl of petroleum products, which last for 30 days. But, it can store 6,300 kl of diesel and kerosene each and 7,640 ATF in the capital.
Jha tried to put up brave front in the face of the looming crisis. He maintained that efforts were on to bring supplies via Tribhuvan Highway, the old route to the Valley.
Kathmandu had faced similar crisis on a number of occasions in the past. But, the government does not seem to believe in reality check.
The capital is completely dependent on supplies from outside — be it vegetables, edible items or petroleum products — thanks to its geographical location.
The prevailing bandh culture has contributed to spiralling rise of essential commodities’ price. The inflation is at 14.4 per cent. While, the central bank aims to keep it down to seven per cent.
Meanwhile, the western districts are also facing a shortage of petroleum products for the past four days due to the bandh. Many vehicles on both long-and short-routes have gone off the road following the shortage of petroleum products in the local depots of NOC, according to dealers.
Nepal Oil Corporation (NOC) — the state-run sole petroleum supplier — has been hit hard by the diminishing stock of petrol.
"We haven’t been able to ferry the petroleum products from Amlekhgunj Depot in Bara due to the ongoing stir,” said Digambar Jha, managing director, NOC.
“If the current uncertainty persists in Chitwan, then the crisis is likely to deepen. We have stock for only two days,” he added.
The Valley requires 300 kilolitres (kl) of petrol daily. But, NOC’s storage capacity is only 2,630 kl, which is adequate for only eight days. The protest of Tharu community blocking the highways has entered into the eighth day today forcing the NOC to curtail the supply.
“Though the petrol stock is alarmingly low, there is no immediate cause for concern for Air Turbine Fuel (ATF), diesel and cooking gas," he said.
According to Nepal Petroleum Dealers Association (NPDA), NOC today managed to distribute petrol to only 10 institutional petrol pumps that belong to Nepali Army, Police and Sajha.
Altogether, there are 114 retail dealers in the Valley. While, the nationwide count stands at 2,403.
NOC boasts of a cumulative storage capacity of 71,742.3 kl of petroleum products, which last for 30 days. But, it can store 6,300 kl of diesel and kerosene each and 7,640 ATF in the capital.
Jha tried to put up brave front in the face of the looming crisis. He maintained that efforts were on to bring supplies via Tribhuvan Highway, the old route to the Valley.
Kathmandu had faced similar crisis on a number of occasions in the past. But, the government does not seem to believe in reality check.
The capital is completely dependent on supplies from outside — be it vegetables, edible items or petroleum products — thanks to its geographical location.
The prevailing bandh culture has contributed to spiralling rise of essential commodities’ price. The inflation is at 14.4 per cent. While, the central bank aims to keep it down to seven per cent.
Meanwhile, the western districts are also facing a shortage of petroleum products for the past four days due to the bandh. Many vehicles on both long-and short-routes have gone off the road following the shortage of petroleum products in the local depots of NOC, according to dealers.