Narayani Finance and National Finance merged

A joint annual general meeting (AGM) of National Finance Ltd and Narayani Finance Ltd (Bittiya Sanstha) here today decided to merge the two and name the new institution 'Narayani National Finance Company'.
"After the merger of the two financial institutions, the name of the merged company will be Narayani National Finance Company," said Ram Krishna Manandhar, coordinator of the merger committee and chairman of National Finance.
The joint AGM was held here to merge the two finance companies into one after permission from the Nepal Rastra Bank (NRB), the central authority. Last March, NRB had given the go-ahead for the merger. The two companies had also signed a memorandum of understanding (MoU) after NRB's green signal.
This is the first time in the financial history of Nepal that two different financial institutes of different classes have merged, said Manandhar adding that the merged company plans to get upgraded to a Class B development bank soon. "We plan to upgrade the financial institution to A-Class commercial bank in the long run," he said.
The joint AGM also decided to issue 1:0.5 rights shares to increase the paid up capital for upgrading the institution to a Class-B development bank.
The total paid up capital after the merger is Rs 440 million while the total deposit is registered at Rs 1.56 billion. Loans and credit portfolio stand at Rs 1.53 billion, as of at the end of the third quarter of the current fiscal year. The total net profit is at Rs 40 million, said Manandhar.

NIC,BoAN, Kist join hands for extended banking services

The three commercial banks -- NIC Bank, Bank of Asian Nepal (BoAN) and Kist Bank -- have signed an agreement for extended banking services that will help their account holders use any of their branches for cash withdrawal, deposit and transfer of funds.
NIC Bank Chief executive officer Sashin Joshi, BoAN chief executive officer Parshuram Kunwar Chhetri and Kist Bank chief executive officer Kamal Prasad Gnawali signed the agreement for the account holders' benefit, here today.
"Account holders of any of the three banks can now deposit or withdraw their cash and transfer funds from any of the three banks' branches, thus increasing their access to financial institutions in a cost effective way," Joshi said adding that the cost for such transactions would, however, be minimal.
In recent times, banks are competing to expand their branch network, but these three commercial banks here came up with the idea of providing their account holders greater access to their networks.
NIC -- the 13th commercial bank established on July 21, 1998, Bank of Asia Nepal -- the 22nd commercial bank established on October 12, 2007 and Kist Bank -- the recently upgraded 26th commercial bank -- are not the first ones to sign such an agreement.
Earlier, three other commercial banks -- Bank of Kathmandu, Laxmi Bank and Himalayan Bank -- have also inked such an agreement to provide more access to their customers.
"This is another step in the advancement of the branch-less banking that is expected to contribute to increasing access to finance in Nepal in a cost effective way," said Joshi, who is also the president of Nepal Bankers' Association. "However, there will be a limit to the withdrawal amount," he added.

Nepse in eccentric mode

Nepse continued rallying this week too, closing at 718.62 points -- 41.98 points higher than the closing of last week's 676.64 points.
This week saw a whopping rise on Wednesday by 25.17 points -- and a fall -- on Thursday by 21.27 points as the sole secondary market went from green to the red zone.
Some, market gurus attributed the change to the political change -- formation of a liberal government -- but others suspect the 'unnatural rise and fall' of Nepse was due to a handful of investors who are taking advantage by spreading rumours in the transition period.
The 'unnatural growth' could not justify the transaction amount as the total transaction amount -- as against the rise in Nepse -- has gone down by 13.12 per cent to Rs 278.4 million against last week's rise of 51.70 points to Rs 285.1 million. The contribution of Group-A companies -- the blue-chip shares -- also went down by 67.78 points as against last week's 76.19 per cent.
However, shareholders of commercial banks, hydropower companies, development banks, others and trading sub-groups earned profits as shares of these sub-groups witnessed an encouraging growth this week.
Of the nine sub-groups, eight gained to push Nepse up. An exception was the finance companies sub-group that lost 4.50 points to drop to 761.87 points from last week's closing of 766.37 points.
The commercial banks sub-group gained a whopping 60.44 points to reach 736.55 points followed by hydropower sub-group which gained 43.95 points to rise to 888.66 points. Similarly, developing banks sub-group also surged by 32.69 points to reach 756.52 points and the others sub-group -- with the help of Nepal Telecom shares -- flared 25.24 points up to reach 716.67 points. The trading sub-group gained 10.12 points to reach 281.78 points and insurance, manufacturing and hotel sub-groups gained 7.83 points to reach 650.78 points, 2.86 points to reach 434.32 points and 1.89 points to reach 365.00 points, respectively.
Standard Chartered Bank Nepal led the rally as it topped the chart in terms of trading amount at Rs 60.66 million. However, Global Bank topped the chart in terms of share units traded and number of transactions with 30,000-units of Global bank changing hands in 468 transactions.
Standard Chartered Bank Nepal (with Rs 60.66 million), Bank of Kathmandu (with Rs 33.72 million), Nepal SBI Bank (with Rs 27.24 million), Nabil Bank (with Rs 23.76 million) and Global Bank (with Rs 17.88 million) were the top performers of this week.
The 78-scrip sensitive index -- considered blue chip shares in the domestic market -- also gained 12.69 points to reach 190.31 points. The float index -- calculated on the basis of real transactions -- also gained 3.99 points to close at 68.65 points from last week's closing of 64.64 points.
The week started in the green on Sunday as Nepse gained 11.423 points to rise to 688.07 points from last week's closing of 676.64 points. The rally continued on Monday as Nepse surged by 13.44 points. On Tuesday also, Nespe registered a growth of 13.21 points to close the day's trading at 714.72 points.
Wednesday witnessed the biggest growth in the last couple of months as Nepse flared up by 25.17 points to rise to 739.89 points but the week ended in the red with Nepse losing 21.27 points to drop to 718.62 points.
The sole secondary market's five-day trading saw over 2-million-unit bonus shares being listed for transaction.

Gold up by a goodly hop

Gold became costlier by Rs 340 per 10 gram this week.The precious yellow metal this week closed at Rs 24,005 per 10 gram from last week's closing of Rs 23,665. The domestic market witnessed a gradual hike in the price of gold, pushed up by the international price.
"The price in the international market has pushed up the price of gold in the domestic market," said the Nepal Gold and Silver Dealers' Association (NEGOSIDA). The strong global share market and rise in oil price have pushed the international price of gold, making it costlier than in the domestic market.
Gold was traded at $951 per ounce in the international market last Friday but it was $963 per ounce -- a rise of $12 per ounce -- today on Friday. It is expected that the rise in price in the international market will hit domestic tranmsactions.
The price rise has taken toll as during November-December 1998, around 1,050-kg of gold used to be transacted in a month -- 35 kg per day -- it being the wedding season. It worsened in 2007, with the transaction of gold per day hovering at around only five to 10 kg per day. This past season again, transactions picked up to around 15 kg per day sale. However, the recent increase in gold price has again started hitting transactions.
The trend of investing in gold for security had picked up in Nepal, giving a boost to the transaction of the yellow metal in the domestic market. The trend of holding gold had also increased by 10 to 20 per cent as against only five per cent last year. The domestic market witnessed the highest price of gold at Rs 21,860 per 10 gram (Rs 25,500 per tola) in October 2008 since the same year's July 16, when the price was Rs 25,450 per tola.
Gold had closed at Rs 23,665 last Friday and continued to rise throughout the week to close at Rs 24,005 per 10 gram this Friday. The bullish trend is expected to continue.
Meanwhile, silver also followed the bullish trend as it closed at Rs 377 -- Rs 10 higher than the closing price of Rs 367 per 10 gram last week.

US relief for Nepali garment sector

Nepal's beleaguered apparel industry is going to get a shot in the arm with a new US Bill that has introduced trade relief for apparel and textiles imported from Nepal. Though officially a Nepal-US trade issue, the development would indirectly benefit a large number of Indians associated with Nepal's apparel industry.
The recent Bill will provide duty-free status to textiles and apparels imported from 14 Least Developed Countries (LDCs), including Nepal, said Garments Association Nepal (GAN) members. The US is the second-largest market for Nepal's garment exports.
Nepal's garment exports to the US in 2007-08 were worth around $940 million, constituting eight per cent of Nepal's total exports. According to GAN statistics, in 2001-02, 90 per cent of Nepal's total apparel exports was to the US. But due to several reasons, it slipped steeply to 62 per cent in 2007. The downward trend continued even afterwards.
Since this January, Nepal has recorded a further slide. January's drop was followed by a decline of 65 per cent, 31 per cent and 58 per cent during February, March and April, respectively.
"The US Bill will definitely help this labour-intensive industry. Its survival is important for industrially and financially weak Nepal. Against 450 major garments factories 15 years ago, only 10 to 15 are alive. We had several rounds of talks with the US department of foreign trade about this," said RB Pokhrel, executive member of Export Council of Nepal.
Incidentally, with the open border between Nepal and India a large number of Indian workers from border areas too work in Nepali garment factories.
Moreover, a large number of Nepal garment factories used to be run with finance from across the border. "Being land-locked, Nepal utilises sea ports at Kolkata and Mumbai to access to the outer world. This makes for a good number of Indian traders' and handling agents' involvement in Nepal's export operations. A possible increase in Nepal's garment export to the US would benefit all of them," said GAN members.

Nepal-B'desh trade talks fruitful

Bangladesh has urged Nepal to fix the destination for cargo trade. During a joint secretary level meeting with Nepal, Bangladeshi officials discussed the transportation modality at length with their Nepali counterparts. "Bangladesh is convinced that a destination should be fixed for the cargo trade," said Surya Silwal, joint secretary at the Ministry of Commerce and Supply -- who led the Nepali delegation to Bangladesh -- after returning from Dhaka today.
This joint secretary level meeting was a revision meeting of the last commerce secretary level meeting. "We discussed three major issues: revision of the last commerce secretary level meeting between the two countries, facilitating the next talks that will be held in October first week and revising the wish list for exports," he added.
Officials from both countries discussed establishing a preferential bilateral trading arrangement and simplifying movement of goods in respective markets. The Bangladeshi private sector also took active part in the bilateral talks.
Dhaka has restricted Nepali exports with a heavy tariff barrier. It has imposed higher customs duty on some agricultural products that are Nepal's main export items. Kathmandu has been requesting Dhaka to provide duty-free entry facility to some 140 Nepali commodities. "We repeated our request for duty free access and Bangladesh responded positively," Silwal said adding that Nepal's suggestion was to start with a couple of items.
Nepali traders describe the Bangladeshi high duty structure as the barrier in expediting the bilateral trade. However, Silwal said that both countries want to expedite trade "but there are political barriers."
Apart from the tariff, transportation is another major hurdle in bilateral trade. Nepal has proposed tripartite talks for smooth transportation link between the two South Asian countries as both Nepali and Bangladeshi traders or tourists have to cross India while using land routes.Additional secretary of the Commerce Ministry of Bangladesh Mustafa Mohiuddin headed the 12-member Bangladeshi delegation while Silwal led the four-member Nepali team.
During the bilateral trade talks yesterday, both sides also agreed to mobilise tour operators and travel agencies of Bangladesh and Nepal to take initiatives to give a boost to the tourism sector of the two countries.
Around three per cent Bangladeshi tourists used to visit Nepal, but the flow of Bangladeshi tourists to Nepal has seen a whopping fall in recent months. "During 2065 BS (mid-April 2008 to mid-April 2009), the Nepali embassy in Dhaka issued 1,547 visas," said Ramesh Prasad Khanal, minister counsellor and deputy chief of mission at the Nepali embassy, Dhaka."
This year, from mid-April 2009 till date only around 500 visas were issued," he added.
The Bangladeshi tourists visiting by land routes need double entry visa as they have to cross the Indian border twice to enter Nepal. India started issuing a single entry visa that has reduced the number of Bangladeshi tourists coming to Nepal by land.

Price hike trots at steady pace

Price hike in Kathmandu Valley, Hills and Tarai maintained a similar trend. "Region-wise, price rise in Kathmandu valley was 12.5 per cent followed by 11.8 per cent in Hills and 11.7 per cent in Tarai in the first nine months of the current fiscal year. Last year, the respective rates were 8.6 per cent, 8.5 per cent and 9.2 per cent," according to the Nepal Rastra Bank -- the central bank -- current macroeconomic situation based on the third quarter's report.
Incidentally, the price hike seems to be slowing down. According to the year-on-year (y-o-y) consumer price inflation data, it rose to 11.9 per cent in mid-April 2009 from 8.9 per cent in the same period last year. Earlier the price hike was hovering around 13 per cent.
"The inflation, in the review period, was driven mainly by the rise of 14.8 per cent in food and beverages group," said the central bank. The price index of non-food and service group increased by 8.8 per cent. The price rise of food and beverages and non-food and services group was 12.6 per cent and 4.9 per cent respectively in mid-April 2008.
In the food and beverage group, price indices of sugar and sugar-related products increased in mid-April 2009 by a whopping rate of 50.5 per cent. This is in sharp contrast to last year's decline of 3.8 per cent, said the report.
Similarly, the price indices of meat, fish and eggs as well as vegetables and fruits sub-groups increased in the review period by 28.2 per cent and 21.3 per cent respectively compared to an increase of 8.8 per cent and three per cent in the same period last year. During the review period, the indices of pulses rose up by 20.7 per cent compared to an increase of 14.9 per cent in the same period last year.
In the review period, the y-o-y core inflation rose to 12.1 percent from 7.0 percent a year ago. The y-o-y wholesale price inflation increased to 13.7 per cent compared to 9.4 per cent a year ago. The index of agricultural, domestically manufactured and imported commodities increased by 19 per cent, 9.1 per cent and 8.7 per cent respectively in the review period as compared to 10.4 per cent, 8.5 per cent and 8.3 per cent a year ago.
Of agricultural commodities, mainly the price index of cash crops increased by 34.3 per cent in the review period compared to a rise of six per cent a year ago. Likewise, livestock production and fruits and vegetables increased by 30.3 per cent and 26.7 per cent compared to an increase of 7.1 per cent and 4.1 per cent in the same period last year. The overall y-o-y salary and wage rate index rose by 20.3 per cent in the review period as compared to a rise of 9.2 per cent a year ago. The salary index increased by 16.8 per cent in the review period compared to a rise of 10.9 per cent in the corresponding period the previous year.
In the first nine months of 2008-09, the government budget remained at a surplus of Rs 12.7 billion in contrast to a deficit of Rs 5.3 billion in the corresponding period the previous year. "An impressive growth of resource mobilisation relative to the government expenditure accounted for such a budget surplus in the review period," the report said.
In the review period, the government has significant cash surplus of Rs 28 billion with Nepal Rastra Bank (NRB).

Prime Bank's IPO oversubscribed, receives over Rs 7 billion worth applications

Prime Commercial Bank's primary issue has been oversubscribed as it has received applications worth over Rs 7 billion for its primary issue that closed today.
"Our collection exceeded our expectations of Rs 4 million and crossed Rs 7 billion," said Narayan Das Manandhar, chief executive officer of Prime Commercial Bank.
"We thought that the collection would be less because the general investors have not yet got their money back from Sunrise Bank's primary issue though the money has returned to the banking channels," Manandhar said adding that the financial institutions also could not lend sufficiently as their closing was nearing.
The bank's Initial Public Offerings (IPOs) closed today after it received more applications than the units of shares it had floated. The bank floated 30,00,000-unit shares worth Rs 300 million on Sunday. According to the new regulation of Securities Board of Nepal (Sebon), the primary issue can be closed after the fourth day if the collection exceeds the target.
On the first day, Sunday, some 28,328 applications worth Rs 704.239 were received and on the second day 35,994 applications worth Rs 1.05 billion rolled in, making it a total of 1.75 billion in the first two days but by the end of third day, the collection shot up to over Rs 4 billion. "On the last day today, we expect the collection to cross Rs 7 billion," Manandhar, the CEO of the 21st commercial bank said. "The bank had 60 counters at Ranjana Cinema hall alone in New Road and has managed the collection well," Manandhar added.
Prime Commercial Bank -- established on September 24, 2007 -- was one of the last commercial banks to float primary issue. Citizen Investment Trust (CIT) was the issue manager for Prime Commercial Bank. Agriculture Development Bank Ltd (ADBL) is the now the last of 26 commercial banks that is planning to float its primary issue. It has appointed Ace Development Bank as its issue manager for the largest ever IPO of Rs 960 million -- more than three commercial banks put together.
Earlier, the primary issue of Sunrise Bank was oversubscribed by around 30 times to over Rs 10 billion. Similarly, the primary issue of Bank of Asia Nepal was oversubscribed by below 19 per cent to Rs 5.40 billion whereas Citizens' Bank International's primary issue was oversubscribed by a little above 20 times to Rs 6 billion.
Due to no other investment opportunity, investment in financial institutions' shares has become a newfound interest of late.
Meanwhile, Sebon has approved the much-awaited Chilime Hydropower Company's primary issue of 23,04,000 units. The board permitted Chilime to add a premium of Rs 223.70 to the face value of Rs 100 per unit, making it a total of Rs 323.70 per unit share equal to its networth.
Vibor Bikas Bank is planning to float 26,52,000 unit shares of its IPO for the public soon.

Nepse surges
KATHMANDU: Pushed by the commercial banks sub-group Nepse surged by 25.17 points or 3.52 per cent on Wednesday to 739.89 points from Tuesday's closing. The commercial banks sub-group flared by 37.14 points or 5.08 per cent to 768.92 points. HydroPower sub-group also posted a whopping rise of 33.62 points or 3.8 per cent rise to 918.66 points. Standard Chartered bank Nepal Ltd's shares saw a Rs 319 rise in its per unti shares whereas Nabil Bank witnessed Rs 310 in its per unit shares.

Suspended Bank of Kathmandu board members move court

Four of the suspended board members of the Bank of Kathmandu, along with chairman of the suspended board Sanjaya Bahadur Shah and one another board member on Tuesday filed two separate writ petitions at the Supreme Court against the decision of the Nepal Rastra Bank.
One of the members, who filed the writ petition, said the NRB's move to take over the bank's management under the NRB Act 2063 (Section 54) was 'unjustifiable' as the bank's financial health was sound and the interests of BoK's promoters and depositors were not at stake.
The central bank is empowered to take over the management of any financial institution under NRB Act 2063 (Section 54) if it is dissatisfied with the explanation it has sought.
The NRB took over the bank's management on May 19 to safeguard the interests of investors and promoters, which was 'allegedly' at stake due to growing dispute among the board members. The suspended board members cannot hold any position in any financial institution for another five years.
"The decision to call back managing director Radhesh Pant from his post was a majority decision," a board member argued, adding that majority of the board members could take the decision.
The central bank took the decision in an emergency board meeting on May 19 after it received two separate letters of clarification from BoK on May 17.
The crisis precipitated following the 313th board meeting of BoK on March 22, when it was decided to recall Pant from his post. Though the decision was taken by a majority of the board members, the disgruntled members had urged the central bank to intervene. Four directors took the decision against Pant, while the remaining two -- Sitaram Thapaliya and Sudarshan Poudel -- were against the decision.
Later, the disgruntled board members knocked on NRB's door. The central bank had sought explanation following a dispute over the BoK board's move to recall managing director Radhesh Pant from his post.
The NRB has suspended the BoK board and sent a four-member team, led by director Laxmi Prapanna Niraula, who will work with acting CEO Sabin Lal Shrestha. The NRB takeover is for a short period of three months. It will hand over the management to the new board members after the AGM within the next three months.
A board member, Deepak Narsing Shrestha -- who was not in the board meeting that took the controversial decision -- also filed separate writ petition against the NRB decision.

New FM promises of better economy

Newly-appointed finance minister Surendra Pandey said today that the next budget would be guided by a Common Minimum Programme (CMP) that they would finalise with other political partners after the formation of a full-fledged cabinet.

Speaking at the Reporters Club Nepal here today Pandey, who assumed office yesterday hailed the efforts of the immediate past finance minister Dr Baburam Bhattarai for generating more revenue. "The result-oriented programmes of the earstwhile government will be given continuity," he said adding that the size of the budget -- that he is propably bringing by July-half -- would be a little bigger in size than last year's which was Rs 236.15 billion.

His predecessor Dr Bhattarai had presented his first budget of Rs 236.15 billion for the fiscal year 2008-09 on September 19 last year. The revenue target that he had set for this fiscal year was Rs 141.72 billion. Though the government was successful in revenue generation it failed to kickstart development works resulting in the growth forecast of 7.5 per cent getting hit.

Dr Bhattarai was blamed for not being able to create job opportunities and spend on development works. However, Pandey said without elaborating that the government would emphasise on creating more jobs. He said a separate mechanism would be formed -- if an all-party mechanism could not be formed -- at the local level to expediate development works. He would focus on spending on development works and try to crack the whip on price hike. "We will also bring some relief packages," he promised.

Pandey said that the priority of his government's budget would be to create an investment-friendly environment, improve industrial relations and increase investment in productive sectors to create job opportunities.

"The government will encourage the private sector," he said adding that he would try to combine three pillars of economic development -- government, cooperatives and private sector -- for a prosperous Nepal. "People should feel the change," he added.

However, Pandey said that he needed to study the privatisation of government corporations and act against tax and revenue evaders.

NPC members resign

KATHMANDU: National Planning Commission (NPC) members along with vice-chairman Dr Gunanidhi Sharma put in their papers after new Prime Minister Madhav Kumar Nepal and Finance Minister Surendra Pandey took oath of their office on Monday. The prime minister is the chairman of NPC, the national think-tank -- and after the change of guard in the government they resigned making its easier for the new government to appoint new persons.

Nokia's ovi mail to come in Nepali

You don't know English but want to have an e-mail account. No need to worry, Nokia has launched its Ovi mail that will give Nepali users the opportunity to create their e-mail accounts in Nepali language -- Devnagari script.
"From within one year to one-and-a-half years Nepalis can create Ovi mail usernames in their own language," said Prem Chand, general manager at Nokia Emerging Asia, during the launch in Dhaka of Nokia's own mail service -- Ovi Mail -- that will have 50 languages.
Unlike most other email services, an Ovi mail account can be created and used directly in a Nokia device without ever having to use PC, laptop or fixed landline. "Since the launch of the beta service in December 2008 around 90 per cent of the email accounts have been created on a Nokia phone," Chand said adding that to bring the Internet -- the easiest and most popular means of communication -- closer in emerging markets, Nokia has launched its new technology.Chand also launched Ovi mail compatible entry category devices -- Nokia 2323 classic and Nokia 2330 classic -- that will be available in Kathmandu from June. "However, the Nokia 2730 classic will be available during the third quarter of this year," he added."All these phones come internet ready and work with Ovi Mail, giving first-time email users the opportunity to set up and start using an e-mail account (http://us.mc562.mail.yahoo.com/mc/compose?to=username@ovi.com) directly on their mobile phones," said Paula Laine, vice-president, entry category marketing.With a choice of black and dark blue, the Nokia 2323 classic will retail for approximately $60 while Nokia 2330 Classic will be available in black or deep red and will retail for about $50 at all Nokia stores."In 2002, Nokia unveiled a strategy to lower the cost of owning and operating a mobile phone and bring the benefits of mobile telephony to people in emerging markets -- Nepal, Bangladesh, Sri Lanka, the Maldives and Bhutan. "The aim of introducing these devices and services is to bring the power of the Internet to the people of this region at affordable rates," Laine said adding that the mobile device and Internet are a powerful combination in connecting people and the service. "These products are not only affordable but also relevant and easy to use," she added.
"The power of the Internet is undeniable, and we have seen mobile technologies catalyse the growth of the informal sector across the world empowering local entrepreneurs and having an immediate and lasting impact on people's lives," Chand said.
According to him, services like Ovi Mail combined with mobile phones bring powerful solutions that can be a gateway to knowledge and entertainment that people can access without the need for a PC.
According to consumer research, nearly half of the emerging market customers wanted Internet connection over a mobile phone than a PC. Ovi Mail has the potential to be the first digital identity for many people in emerging markets like Bangladesh, Sri Lanka and Nepal where Internet and PC penetration rates are the lowest in Asia.

ADB awards four projects

Road Connectivity Sector I Project, Teacher Education Project and Small Town Water Supply and Sanitation Project were awarded by Asian Development Bank (ADB) for their best performance among ADB-supported project teams in Nepal.
The three were awarded the Outstanding Project Management Team Award. The Community Livestock Development was also presented a Special Recognition.Project secretary for the Ministry of Agriculture and Cooperatives, Shankar P Panday; secretaries for the Ministry of Physical Planning and Works, Purna P Kadariya and Uma Kanta Jha and secretary for the Ministry of Education Ram Swarup Sinha presented the awards to the winning project teams at a special ceremony at ADB's Nepal Resident Mission (NRM) today.
"These awards recognise the project teams' excellent performance, efficiency in implementation and achievements of targets -- both statistical as well as on the ground," said Barry J Hitchcock, country director of Nepal Resident Mission. "We have seen excellent results in terms of portfolio performance in Nepal last year and we appreciate the efforts made by the project teams in delivering the desired results," he added.
The Road Connectivity Sector I Project aims to support construction and upgrading of 10 feeder roads measuring a total of about 490 kms whereas the Teacher Education Project is a follow-up of the ADB's first Primary Education Development Project and aims to establish an effective and sustainable teacher education system for primary education.Similarly, Small Town Water Supply and Sanitation Project assists the government in providing water supply, drainage and sanitation facilities in 29 small towns with an average population of about 18,000 and Community Livestock Development Project aims to reduce the incidence of poverty in rural areas of 48 districts through intensive livestock programme, livestock processing and marketing and higher-altitude livelihood pilot programmes.
NRM instituted the award scheme in 1996 to encourage project staff of ADB-assisted projects to improve portfolio performance in support of its over-arcing goal of poverty reduction.The Manila-based lender is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966 -- ADB is owned by 67 members -- 48 from the region. In 2008, it approved $10.5 billion of loans, $811.4 million of grant projects, and technical assistance amounting to $274.5 million.

Revenue collection continues to rise

By the end of Baishakh (mid-April to mid March) -- the 10th month of the current fiscal year -- the finance ministry collected a total of Rs 110.51 billion revenue, surpassing its target of Rs 103.5 billion for the month.During the corresponding period last fiscal year, it was able to collect Rs 79 billion. "Revenue collection exceeded 40 per cent in comparison to last fiscal's same period," according to the finance ministry. At the end of the ninth month, revenue collection exceeded its own target collecting 39.3 per cent higher to Rs 98.67 billion as against Rs 70.85 billion last Chaitra.
The encouraging collection of revenue is attributed to three major reasons: priority of the finance ministry to revenue mobilisation, fear in the business community of the Maoist leadership and the alacrity of the leadership itself.
"The seriousness of leadership -- both political and bureaucratic, reduction in malpractices and discrepancies and the good relationship between the government and private sector helped us achieve target," said acting revenue secretary Krishna Hari Baskota.Finance Minister Dr Bhattarai presented his first budget of Rs 236.15 billion for the fiscal year 2008-09 on September 19 last year. The revenue target that he had set for this fiscal year was Rs 147.72 billion, and which was dubbed highly ambitious.
Dr Bhattarai when was criticised that his target was too ambitious but he took it as a challenge and concentrated on revenue collection. The bureaucracy -- blamed for being over-politicised and lackadaisical -- also supported him whole-heartedly.Willingly or unwillingly, the business community also cooperated with the government. Though Dr Bhattarai does not agree that the government and private sector had any crisis of confidence, there was definitely a certain level of uneasiness between the business community and the government. But like good citizens, the private sector obeyed the government and came under VDIS, helping the government to increase revenue collection and exceed the revenue target.
The issue of revenue mobilisation has been a serious concern for past governments as well. Realising the importance of revenue mobilisation, the government after second Jan Andolan appointed a separate revenue secretary in 2006 August. "In the immediate past year, revenue growth was only three per cent and nine per cent a year ago," finance secretary Rameshwor Khanal, who was the first incumbent in the post, said adding that the government then was serious about revenue mobilisation and that is why it thought of appointing a separate full-time secretary for revenue.
"Successive finance ministers gave top priority to revenue collection," Baskota said adding that reduction of corruption in customs, a stronger bureaucracy and changed tax system worked miracles in achieving record revenue generation.Dr Bhattarai, as he himself claims, has a reason to be satisfied as he was successful in bringing more people within the tax net through VDIS. "Of the 3600 who came under VDIS, 60 per cent are new entrants," Baskota said. "The older 40 per cent ones also expanded their base."
"The finance ministry went the extra mile and worked hard for forming a separate desk for separate types of taxes like excise desk, income tax desk and customs desk," he said adding that the systematisation of tax and regular follow-up not only helped revenue collection for this government but would also have long-term benefits for successive governments.
Though, the contribution of non-tax revenue to the total revenue is 70 to 75 per cent, Value Added Tax (VAT) target could not be achieved in comparison to income tax and excise.However, the government failed in spending on development activities as finance ministry's task is not only to collect revenue. Dr Bhattarai accepted the failure in development spending but he also blamed the other political parties for not being able to spend the development budget. The cold behaviour of the coalition partners took its toll on development spendings. "In absence of local government, the budget could not be spent on development activities," he said adding that the other ministries also did not whole-heartedly support the finance ministry.

Bank of Kathmandu accepts central bank's offer

Bank of Kathmandu (BoK) has opted for Nepal Rastra Bank's (NRB) proposal to take over the reins of the bank's management. BoK authorities have urged all not to be worried over the turn of events -- NRB will take charge for the next three months.
"We have a sound financial health. The central bank took over the management due to dispute among board members," said BoK.
NRB took control of the 10th commercial bank at an emergency board meeting late last evening to safeguard the interests of BoK's promoters and depositors, which could have been at risk following the differences of opinion among its board members.
However, NRB's move did not have a cascading effect on the bank's share price that traded at Rs 1,485, only Rs 22 less than yesterday. Investors find BoK share a good bargain as it had a deposit base of Rs 17.47 billion and earned a net profit Rs 332.96 million by the end of third quarter. In the last fiscal year, it had also distributed 40 per cent bonus shares.
NRB has suspended the BoK board and sent a four-member team, led by its director Laxmi Prapanna Niraula, who will work with acting CEO Sabin Lal Shrestha. With this move, the central bank wanted to send across a message to all financial institutions that the regulatory authority of the financial market is serious about safeguarding the public deposit.
The growing perception is that financial institutions have to be run by professionals and not by the board. But BoK had argued that a bank's board had full authority to appoint or dismiss any staff and no law allowed NRB to intervene. But, professionals opined that NRB was well within its right to step in since financial institutions were custodians of public money.
"It is an unfortunate decision," said Rajendra Khetan, chairman, Laxmi Bank. He felt that take over was not a solution."NRB has to play the role of a guardian. Undoubtedly, CEOs call the shots in banks. But in the domestic context, promoters would like to have their say," he explained.
Sashin Joshi, CEO of NIC Bank, who is also the president of Nepal Bankers Association (NBA), also felt that the decision was unfortunate. "NRB's intention might be as per the law," he said adding that the dispute should not have reached the central bank.
Agreed Khetan, "The take over could have been averted it the dispute did not have reached the central bank and some body -- aggreed by both the parties -- mediated.
But the dispute in the board is inevitable and more disputes are likely in the future.

More RBB employees opt for VRS

Around 69 employees took voluntary retirement under the sixth phase of Voluntary Retirement Scheme (VRS) offered by Rastriya Banijya Bank (RBB).

After the sixth phase of VRS, the number of present regular employees at the government-owned bank -- excluding those on contract -- has reduced to 2,740.

"Under the Financial Sector Technical Assistance Project (FSTAP), the bank had planned to reduce its workforce to 2,870 by the end of 2010," said RBB chief executive officer Janardan Acharya.

While the bank has achieved its target of reducing the number of employees it has also infused fresh blood for the effective operation of the bank. "Around 242 new employees have been inducted," he added.

Employees who have worked for 15 years or more can put in their papers voluntarily under the VRS. They will be given a golden handshake depending upon the number of years of service and level, which is minimum Rs 3,90,000, an extra amount.

"The total cost of VRS has come to around Rs 7 million," Acharya said adding that though the cost is funded by World Bank under FSTAP, the bank has been paying from its own fund and the World Bank fund has been kept for emergency.

The VRS idea was floated when the management of NBL and Rastriya Banijya Bank (RBB) was handed over to foreign executives in 2002 under FSTAP to re-engineer the two financial institutions and make them competitive.

One of the reform measures undertaken by the foreign management was introducing VRS to downsize these two overstaffed public sector banks. Both banks are successfully running under Nepali CEOs -- Janardan Acharya in RBB and Dr Binod Atreya in Nepal Bank Ltd -- at present.

Under the Nepal Bank Ltd's (NBL) fourth phase of Voluntary Retirement Scheme (VRS) 225 employees have already applied and the number could go higher to 275, after the bank's HR department collects all the applications. The final date for NBL's VRS application ended yesterday.

RBB's VRS

1st phase -- 1,267

2nd phase -- 225

3rd phase -- 140

4th phase -- 66

5th phase -- 100 staffers

6th phase -- 69 staffers

Total staffers taking VRS -- 1,867

Central bank takes over Bank of Kathmandu

Nepal Rastra Bank (NRB) has decided to take over -- albeit "for a brief period" -- the reins of the Bank of Kathmandu (BoK). However, the central bank has given options to BoK as well.

"If the bank can convince us that it will work together for its betterment, then we can rethink on the move after three months," a NRB board member said after the meeting.

The central bank took the decision in an emergency board meeting this evening after it received two separate letters of clarification from BoK on Sunday. The central bank sought the explanation following a dispute over the BoK board's move to call back its managing director Radhesh Pant from his post.

The central bank is set to take over the management as per NRB Act 2063 (Section 54) since it was dissatisfied with the explanation furnished by the bank. As per the rule, if NRB is not convinced with the explanation, then it is empowered to take over the bank's management.

The bank, in turn, argued that the decision to call back Pant from his post of managing director was "an internal matter and a normal process."

The crisis precipitated after the 313th board meeting of BoK on March 22, where it was decided to call back Pant from his post. Though the decision was taken by a majority of the board members, the disgruntled ones urged the central bank to intervene.

Four directors -- two each from promoters and public -- took the decision against Pant, while the remaining two -- Sitaram Thapaliya and Sudarshan Poudel -- were neutral.

Later, the disgruntled ones knocked on NRB's door. They submitted a separate letter of clarification on Sunday as well.

A majority of shares of BoK -- established on March 3, 1995 as the 10th commercial bank -- is with the public. The promoters are only 42 per cent stakeholders.

This is the second instance that the central bank is taking over a commercial bank. Earlier, Nepal Bangladesh Ltd came under NRB's control in November 2006 due to financial irregularities. But this time the reason is different.

Sebon approves Chilime primary issue

Securities Board of Nepal (Sebon) has approved the much-awaited Chilime Hydropower Company's primary issue of 23,04,000 units. The board permitted Chilime to add a premium of Rs 223.70 to the face value of Rs 100 per unit, making it a total of Rs 323.70 per unit share equal to its networth.
Today its per unit share was traded at Rs 1,125 per unit at the Nepal Stock Exchange Ltd (Nepse) -- the sole secondary market.
According to the new regulation, a company can issue primary shares adding premium if it has recorded profit and distributed bonus for three consecutive years. Chilime last week distributed 35 per cent cash dividends to its shareholders from last year's profits. The model hydropower company, after repeated pressure from Sebon, finally agreed to float its primary shares to the public, though it had sold shares to Nepal Electricity Authority (NEA) staff and started trading in the secondary market according to the then regulation.
Chilime Hydropower -- constructed with domestic technology -- has been long planning to raise Rs 240 million through an equity offering. The Chilime model is an example of how Nepalis can themselves construct hydro power plants by raising money from the domestic market, if the government has a clear vision of utilising the capital market for development purpose.
Chilime Hydropower is the first hydropower company to be listed for share trading at Nepse. The much-vaunted Chilime model will be replicated in the Upper Tamakoshi Hydropower soon. Currently, there are only three listed hydropower companies -- National Hydropower, Butwal Hydropower and Chilime Hydropower -- in the secondary market.
The issue and sales manager of Chilime's primary issue are NIDC Capital Market Ltd and Citizen Investment Trust.
Sebon -- the regulator of the capital market approved the primary issue on the basis of the Due Diligence Certificate the company provided the board.

Record revenue collected

The government has been blamed for not being able to spend on development activities, but it has exceeded its own target and set another record in revenue collection.
By end of Baishakh (mid-April to mid March) -- the 10th month of this fiscal year -- the finance ministry has collected Rs 110.51 billion, surpassing its target for the month that was Rs 103.5 billion.
During the same period last fiscal year, the government was able to collect Rs 79 billion. "Revenue collection exceeded 40 per cent in comparison to the last fiscal year's same period," according to the finance ministry. At the end of ninth month, the revenue collection target has exceeded its own target and collected 39.3 per cent higher revenue up to Rs 98.67 billion against Rs 70.85 billion collected last Chaitra.
When finance minister Dr Baburam Bhattarai presented his first budget of Rs 236.15 billion for the fiscal year 2008-09 on September 19, the revenue target of the budget was termed ambitious. He had set a revenue target of Rs 147.72 billion.
The encouraging collection of revenue is attributed the rise in revenue collection to the seriousness of the leadership, reduction in malpractices and discrepancies, and the good relationship between the government and private sector.

Bank of Kathmandu justifies sacking of Pant

Bank of Kathmandu (BoK) today said that its decision to call Radhesh Pant back from the post of managing director of the bank was 'an internal matter and normal process.'
Sanjay Bahadur Shah, chairman of the board confirmed that the bank has furnished the answers to questions that Nepal Rastra Bank has asked it after the dispute between the Board of Directors (BoD) reached the central monetary authority. "We have answered all the questions of the central bank," he added.
In the written explanation furnished by the bank's board today -- the last day of time given by the central bank -- it said that 'everything was fine and dandy'.
The central bank -- Nepal Rastra Bank -- had asked the BoK board to furnish answers under the NRB Act 54 (1) why it should not act against the bank. The bank was given seven days to answer.
The 313th board meeting of the bank on March 22 had taken the decision of calling back Pant from the post of managing director by a majority. The board has seven members including Pant. Four directors, two each from promoters and public, upheld the decision against Pant while the remaining two did not oppose then. But later they wrote letters to NRB asking for its intervention in the matter.
The unsatisfied group has also furnished its answers to the central bank today. The central bank will take up the matter in its board meeting.
However, corporate honchos fear that the decision of the BoK could be a precedent. "Such a decision will have a long-term impact on the whole financial sector," a board member said adding that this case of BoK is nothing but the NRB decision can have an impact on the whole financial sector.
Chairman Shah had dubbed the action as a strategic initiative of the bank while looking towards the future. 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.

Yamaha FZ 16 to conquer Mount Everest

XNepali youth icons -- Deepak Bista, Suraj Singh Thakuri and Nima Rumba -- are going to conquer the Himalayan peaks with their FZ16s -- the most preferred and awarded bike in the 150cc category.
They will ride FZ16s to the 'Road Trip to Everest'.
The new campaign 'Road Trip to Everest' is the first-ever adventure to Mt Everest base camp on the Tibetan side organised by Morang Auto Works (MAW) -- sole authorised dealer of Yamaha motorcycles for Nepal. The tour to Everest Base Camp will start on July 18.
Three customers of FZ16 chosen via lucky draw will get a chance to be part of this tour along with the three celebrities. The riders will be riding through 5,200 meters high altitudes and the total distance of 1,100-km to Everest Base Camp.
This is the first time in the history of Nepal that a bike in the 150 CC category will be ridden at such high altitudes and on a route which is only used for a limited period year, said Bishnu Kumar Agrawal, chief executive of MAW.
Till, date only 4x4 wheel drive SUV's have travelled on that road. "We believe that Yamaha FZ16 declared as a true sports bike can travel in any climatic and road condition," he added.F
orms for the event will be available at all Yamaha outlets from Jestha 4 (May 18) and the lucky draw opens on Ashar 12 (June 26). Yamaha FZ 16 is the aerodynamic-looking, sporty, yet rugged motorbike that was designed keeping in mind rugged and crater-filled roads. Also considered the DNA of FZ1 European motorcycles, it is the safest, toughest and fastest bike in its segment. With its diamond-shaped frame, Yamaha FZ16 is different on account of its killer looks and originality.
It has been awarded Bike of the Year, Zig Wheels, 2009; Bike of the Year, Business Standard Motoring, 2009; Viewer's Choice Award, UTVi & Autocar India Awards, 2009, Yamaha Excellence in Quality, Styling and Success in Motor Sports, Apollo Tyres & Auto India Best Brand Award, 2009.Kuvera Chalise

Weak rupee, international market push gold price up

Gold in the domestic market closed Rs 385 per 10 gram higher to Rs 24,135 from last week's closing of Rs 23,750.
The price hike in the international market and weak Nepali rupee have pushed the price of precious yellow metal in the domestic market up, said the Nepal Gold and Silver Dealers' Association (NEGOSIDA).
"The bullion in the international market closed $13 higher than last Friday," it added. Similarly, US dollar appreciated vis-à-vis Indian currency with which Nepali rupee is pegged. Nepali rupee was exchanged at Rs 80 per dollar on Friday.
The precious yellow metal was traded at Rs 23,835 per 10 gram on Sunday, whereas it lost Rs 130 per 10 gram on Monday. But remaining of the week, the price rallied to touch Rs 24,265 on Thursday but settled down to Rs 24,135 per 10 gram on Friday, the last day of the trading in the domestic bullion market.
According to the NEGOSIDA, silver also became expensive by Rs 2 per 10 gram to Rs 368 on Friday.

Tips for investors
KATHMANDU: Lately Nepali investors have been lured to gold as a reliable investment. But it is very essential to understand when to buy and when to sell, if an investor wants to make profit. Traders and day-traders, in particular, chase the waves only and so ignore all but the daily picture.
According to the survey, 52 per cent of the best traders who trade make money. Their payment really comes in the sandpapering of their nerves.Let's look at a tried and tested way of making the entry point, then the policy between then and the exit point. Right now a look at gold shows that after two attempts to surmount and hold the $1,000 level the gold price has pulled back to $870 and is trying to hold its position above $930 now. At the moment it just does not want to go below $880. And next?
The gold price itself never goes straight up but can swing as much as 30 per cent, giving even long-term holders the opportunity to move out, then back in. Each investor with one's own investment parameters, own risk profile and investment objective must make exit point decision alone, because one is the only person who knows one's situation the best. Professionals can only re-assess the market fundamentals, combine these with the technical picture and point to the places where the gold price signals a trend change.
Coming into the picture are the investor's objectives. Is one there for the long haul, or is one a trader. If for the long haul, is one 'on margin' and so more vulnerable to volatility? The answer to these questions will help you make money. -- Agencies

Standard Chartered Bank dominates Nepse

Standard Chartered Bank Nepal (with Rs 36.64 million), Nepal Development and Employment Promotion Bank (with Rs 33.52 million), Nepal SBI Bank (with Rs 14.99 million), International Leasing and Finance (with Rs 13.91 million) and Bank of Kathmandu (with Rs 13.11 million) were the top performers of this week.
Whereas Nepal Development and Employment Promotion Bank topped the chart in terms of share units traded and number of transactions with 63,000-unit shares changing hands in 1,246 transactions.
Of the five day trading the secondary market closed in green for three days and in red for two days. The week started in green on Sunday as Nepse surged by 6.37 points to 660.42 points from the closing of 654.05 last Thursday. But it ended in red on Monday after losing 1.25 points to 659.17 points. The sole secondary market index bounced back on Tuesday by a marginal 0.88 point to 660.05 points. On Wednesday it surged by 1.50 points to 661.55 points. However, on Thursday the last day of the trading in the domestic secondary market, the market closed 0.59 point lower to 660.96 points.
Of the nine sub-groups two -- hotels and manufacturing subgroups -- did not witness any change in their indices as their shares were not traded this week. Except only one sub-group -- insurance companies -- all other sub-groups; hydropower companies, development banks, commercial banks, finance companies, and others -- gained this week to push the Nepse up by 6.91 points. Last week too the hotels sub-group didnot see any transaction.
Insurance companies sub-group lost 9.10 points to 626.07 points. But the Hydropower sub-group gained a whopping 52.30 points to 875.07 point, others sub-group surged by 21.14 points to 643.84 points, trading sub-group flared by 16.62 points to 234.64 points, finance companies sub-group gained 8.35 points to 752.10 points, development banks sub-group gained 5.66 points to 779.10 points and the commercial banks sub-group gained a marginal 0.04 point to 658.53 points, respectively.
Unlike last week, this week Class-A companies contributed 59.54 per cent to Rs 293.19 million in the total transaction. Last week the contribution of Class-A companies was only 33.77 per cent. Of the total listed companies 91 companies witnessed their scrips changing hands during the week, whereas last week only 89 companies shares changed hands.
Meanwhile, the 78-scrip sensitive index -- domestic blue chip -- gained 0.55 point to 174.13 points from last week's closing of 173.58 points. Similarly, the float index -- calculated on the basis of real transactions -- also gained 0.42 point to 63.89 points from last week's closing of 63.47 points.
The sole secondary -- that saw trading for all the five days as usual this week -- also listed 8,94,822 rights and bonus shares of Om Finance, Nepal Finance Saving and National Finance.

DCBL,StanChart, NB Bank, NCC Bank and BoK top chart

Developing Credit Bank (with Rs 67.80 million), Standard Chartered Bank Nepal (with Rs 35.09 million), Nepal Bangaldesh Bank (with Rs 31.36 million), NCC Bank (with Rs 29.14 million) and Bank of Kathmandu (with Rs 13.57 million) were the top performers of this week.
Development Credit Bank Ltd (DCBL) topped the chart in terms of share units traded and trading amount with 1,75,000-unit shares changing hands in Rs 67.80 million. However, in terms of number of transactions Kuber Merchant Bittiya Sanstha topped the chart with 500 transactions.
The key players' good performances sent Nepal Stock Exchange (Nepse) up by 6.27 points to 654.05 points from last week's closing of 647.78 points. This week, the surge in Nepse on Tuesday by 7.68 points to 648.57 points and continuous gain by Nepse after Tuesday -- after the Maoist-led government resigned on Monday -- proves that the domestic capital market is a game for few investors, it's not the real mirror of the economy.
Meanwhile, the 78-scrip sensitive index -- considered blue chip shares in the domestic market -- also gained 1.34 points to 173.58 points from last week's closing of 172.24 points. Similarly, the float index -- calculated on the basis of real transactions -- also gained 0.26 point to 63.47 points from last week's closing of 63.21 points.
Though the contribution of the Class-A companies this week dropped to 33.77 per cent, the total transaction -- of 89 companies shares -- increased by 23.94 percent to Rs 293.19 million.
Of the nine subgroups' indices, two -- hotels and trading subgroups -- did not witness any change in their indices as their shares were not traded. Four subgroups -- manufacturing, hydropower companies, insurance and development banks -- lost this week 6.08 points to 432.13 points, 20.86 points to 822.77 points, 48.49 points to 773.44 points and 1,71 points to 635.17 points, respectively.
But other three subgroups gained. The finance companies subgroup surged by 11 points to 743.75 points while commercial banks subgroup gained 8.93 points to 658.49 points and others subgroup gained 17.62 points to 622.70 points. The commercial banks subgroups' transaction contributes to over 45 per cent of the total transactions making it the key player in the secondary market. If all other eight subgroups lose and commercial banks subgroup gains fairly, it can push the total Nepse up. Another gainer subgroup -- finance companies -- has over 26 per cent contribution to the total secondary market transaction.
The week started in the red on Sunday as Nepse lost 5.74 points from last week's closing of 647.78 points. Nepse shed 1.15 points on Monday but rebounded on Tuesday by 7.68 points to 648.57 points. The secondary market witnessed a continuous gain from Tuesday till Thursday -- the last day of trading -- to close at 654.05 points.
The sole secondary -- that traded for five days this week -- also added 7,96,704 bonus shares of Annapurna Finance and Siddhartha Finance.

Taxpayers taught ropes of VAT e-filing

Inland Revenue Offices (IRO), Area No 1 and 2, Kathmandu and Lazimpat office organised a demonstration programme on e-filing of value added tax (VAT) for taxpayers here today.
Taxpayers, auditors and officials of the offices took active part in the programme.
Though the government has started e-filing of VAT since this fiscal year, very few taxpayers are using the facility.
"It is for the benefit of the taxpayers," said Shanta Bahadur Shrestha, director general of the Inland Revenue Departmant (IRD). "Taxpayers need not go to the tax office to pay the VAT if they learn the e-filing system."
However, even now very few tax payers are finding it convient to use the e-filing of VAT that saves time, energy and prevents administrative hassles. The use of e-technology in the tax administration has also reduced the workload of employees and increased their efficiency.
The training was organised under the Taxpayer Education Programme of IRD that has from this week started action against around 6,400 Voluntary Disclosure of Income Sources (VDIS) defaulters. Some of the suspected businesses were raided last week. "We are still investigating," Shrestha added.
IRD collected a total of Rs 1.51 billion under the scheme from around 3,600 people, though it had compiled a list of 10,000 people. The government had extended the deadline by a month after the industry captains urged to accede to their request.
In the first phase, the government managed to rake in Rs 1.42 billion. The original deadline had expired on February 11. However, 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 within the extended period.
Finance Minister Dr Baburam Bhattarai had announced the scheme during his budget speech on September 19, 2008.

Kist starts operating as 26th commercial bank

Kist Bank Ltd has started operations as the 26th 'A' class commercial bank of the country.
Established on February 21, 2003 as Kist Merchant Banking and Finance Company Ltd -- a C- class finance company -- Kist Bank is the second finance company to upgrade directly to A-class commercial bank after NMB Bank.
Though Nepal Rastra Bank (NRB) had already permitted Kist Bank to operate as an A-class commercial bank, NRB deputy governor Bir Bikram Rayamajhi today formally inaugurated it as the 26th commercial bank.
On the occasion, bank CEO Kamal Prasad Gyawali said Kist Bank plans to become the best bank in the country by providing innovative and better services.
"The bank will open a total of 50 branches," informed Rajesh Shakya, chairman of the bank that has 5,000 share holders. It has 24 branches and 22 ATMs currently.
The total number of the branches of all 26 commercial banks has touched 640. There are a total of 26 commercial bank, 58 development banks, 78 finance companies and 12 micro-finance companies, according to NRB data. The total deposit of all the financial institutions has touched Rs 4.78 trillion.
With the increasing number of financial institutions in the country, the issue of good governance has also come to fore. "Good governance of the institutions is a must for for sustainable growth," said Sashin Joshi, president of Nepal Bankers' Association (NBA) and CEO of NIC Bank.
Securities Board of Nepal (Sebon) chairman Dr Subir Poudel also said, "The companies now have to focus on good governance."

Banks and their branches
1. Nepal Bank Ltd -- 99
2. Rastriya Banijya Bank -- 123
3. Nabil Bank Ltd -- 27
4. Nepal Investment Bank Ltd -- 27
5. Standard Chartered Bank Nepal Ltd -- 14
6. Himalayan Bank Ltd -- 21
7. Nepal SBI Bank Ltd -- 31
8. Nepal Bangladesh Bank Ltd -- 17
9. Everest Bank Ltd -- 29
10. Bank of Kathmandu Ltd -- 26
11. NCC Bank Ltd -- 17
12. Lumbini Bank Ltd -- 5
13. NIC Bank Ltd -- 19
14. Machhapuchhre Bank Ltd -- 31
15. Kumari Bank Ltd -- 15
16. Laxmi Bank Ltd -- 17
17. Siddhartha Bank Ltd -- 10
18. Agriculture Development Bank Ltd -- 63
19. Global Bank Ltd -- 12
20. Citizens Bank International Ltd -- 9
21. Prime Commercial Bank Ltd -- 6
22. Bank of Asia Nepal Ltd -- 12
23. Sunrise Bank Ltd -- 20
24. Development Credit Bank Ltd -- 5
25. NMB Bank -- 5
26. Kist Bank -- 24

Sunrise shares hugely oversubscribed by around 30 times

Sunrise Bank's shares might be allotted within 70 days, if the primary calculation of the issue manager NMB Bank is to be believed.
According to NMB's primary calculation, the primary issue of Sunrise Bank has been oversubscribed by around 30 times to Rs 10 billion. The larger the amount and application, the longer it will take to be allotted. However, it would be allotted within 70 days at the latest.
Pravin Raman Parajuli, Head-Merchant Banking Department of NMB Bank Ltd -- the issue manager of the Sunrise Bank -- estimated that the total amount could be around Rs 10 billion and applications over 3,38185.
The actual amount collected on the fourth and last day yesterday will take a couple of days to be totalled. "Cheques for large amount take at least two days to get cleared from the central bank," he said adding that the current of roughly around Rs 8 billion -- as of today's calculation -- could increase to around Rs 10 billion.
The recently amended Securities Issuance and Registration Regulations has decreased the number of days of application to four. However, the allotment period has been increased. Shares will be allotted within 45 days at the earliest or 70 days at the latest depending on the number of applicants.
The primary issue of 37,50,000-unit shares worth Rs 375 million -- the largest among commercial banks -- at Rs 100 per unit par value each was floated from Sunday.
The amount and the number of applications on the first three days have been confirmed but the last day's amount is just an estimate, Parajuli added.
Earlier, the primary issue of Bank of Asia Nepal was oversubscribed by below 19 per cent to Rs 5.40 billion, whereas Citizens' Bank International's primary issue was oversubscribed by a little above 20 times to Rs 6 billion.
Due to no other investment opportunity, the investment in financial institutions' shares has become a newfound opportunity lately.

No online lure
KATHMANDU: For the first time, issue manager NMB Bank started online application system. "The online application attracted around 4,000 would-be-investors, but only 2,000 of those who filled online profile applied for the primary issue of Sunrise Bank," said Upendra Poudel, CEO of NMB Bank. The total applications received were over 3,38,185, according to a primary estimate. The lukewarm response to the online application system could be due to low IT awareness and prolonged power cuts. Online profile filing is a regular system that is not closed after one primary issue. "Once filled and submitted online and having got an ID code, for investors it will be useful for any primary issue that has NMB Bank as its issue manager in future too," Poudel added.

The oversubscription
Day -- Applications -- Worth Rs
Sunday -- 19,185 -- Rs 811.35 million
Monday -- 65,000 -- Rs 1.70 billion
Tuesday -- 86,000 -- Rs 2.25 billion
Wednesday -- 1,68,000 -- more than Rs 3.91 billion *
Total -- 3,38,185 -- more than Rs 7.92 billion*
(*The amount and application to go up)

Food prices touching sky

The price of rice has increased by 19 per cent, mustard oil by 30 per cent and musuro (broken lentil) by 37 per cent since the price hike started 18 months ago.
"The price of most staple food commodities remained high during April but were generally stable compared to the previous month," according to a monthly report of the World Food Programme (WFP).
"Due to the perishable nature of vegetable products, price increases are largely related to continued supply disruptions," it said. Fuel shortages and the Tarai band created a supply burden that has fueled the price hike, it reasoned.
WFP has shown serious concern over the food price hike. The year-on-year (y-o-y) price hike figures for March, saw a 53 per cent rise in the price of sugar and a 24.6 per cent rise in the price of vegetables. The continued price increase of sugar and vegetables this month remains a major concern.
At the national level, the price of most staple food commodities remained high but generally stable during April. "Compared to last month, the price of rice, wheat flour, black gram and cooking oil all remained largely unchanged," said the report prepared by WFP in association of Ministry of Agriculture and Cooperatives -- Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate (ABPMDD), Federation of Nepalese Chambers of Commerce and Industries (FNCCI) and Consumer Interest Protection Forum (CIPF).
It also reveals supply constraints that remained a serious concern for rural markets in April. Many rural markets are now experiencing critical food shortages for the second month in a row due to bandhs and fuel shortages.
Unlike neighbouring countries in the region, the price of staple food commodities in Nepal remain significantly high compared to 18 months ago, when the price of food first started to steeply increase.

Crop assesment
KATHMANDU: This month MoAC undertook a joint crop assessment with WFP and FAO. The findings are expected to support preliminary analysis that indicated that an additional two million people in Nepal will face severe food insecurity due to poor winter harvests. Due to lack of rain, there is also now a growing concern relating to the production of spring/ summer crops such as maize and potato, said WFP. Given poor harvests, the supply crunch will become increasingly critical.

Sunrise Bank nears collection target

On the first two days -- Sunday and Monday -- in the invite for primary share applications for Sunrise Bank, a total of 84,185 applications worth over Rs 2.51 billion were collected.

"On Sunday, a total of 19,185 applicantions worth Rs 811.35 million were received and on Monday a total of 65,000 applications worth Rs 1.70 billion were received making it a total of 84,185 applications worth over Rs 2.51 billion," said Niraj Giri, director of the Securities Board of Nepal (Sebon) -- the regulatory authority of the capital market.

The protests and uncertain political situation in the first two days of the week are thought to have made people hesitant whereas today the would-be-investors' queues could be more visible around town.

The primary issue of 37,50,000-unit shares worth Rs 375 million -- the largest among commercial banks -- at Rs 100 per unit par value each has been floated from Sunday. Sunrise Bank expects a total of over Rs 6 billion -- over 20 times -- worth applications. If such an encouraging situation persists over the next two days -- today and tomorrow -- the bank's expectations might be easily met.

The capital market is considered a mirror of the economy. However, the Nepali capital market has not yet been able to reflect the economy as Nepse today posted a rise of 7.68 points (1.2 per cent) to 648.57 points just a day after the government led by Prime Minister Pushpa Kamal Dahal 'Prachanda' resigned yesterday.

"The Nepali capital market is still not mature, it is influenced by a handful of people," said Dr Chiranjivi Nepal, former chairman of Sebon. "It's not an isolated case, the market in the past too never reflected the prevailing economic or political uncertainty," he added.

Another trait of the Nepali capital market is that it is dominated by financial institutions. The share of the financial institutions in the total share trading in the sole secondary market stands at over 95 per cent in 2065 BS -- mid-April 2008 to mid-April 2009. The commercial banks' sub-group has 45.37 per cent, finance companies' sub-group has 26.77 per cent and development banks' sub-group has 23 per cent share, making it to a total of 95.14 per cent between mid-April 2008 to mid-April 2009.

The remaining six sub-groups -- trading (2.05 per cent), hydropower (1.47 per cent), insurance (0.89 per cent), others (0.35 per cent) and manufacturing and processing (0.1 per cent) -- have less than five per cent share in the total trading.In power-starved Nepal, the hydropower companies' performance also cannot not be called satisfactory. "For sustainable development of the Nepali capital market, the presence of more manufacturing sectors apart from more brokers and Central Depository System (CDS) is a must," added Dr Nepal

Guna Air start domestic flight

Guna Airlines started its operations from today. Promoted by the Guna group of companies, it launched its flight in the Nepali sky with two Beechcraft 1900s.
"Currently we are flying on the Kathmandu-Pokhara-Kathmandu, Kathmandu-Biratnagar-Kathmandu, Kathmandu-Nepalgunj-Kathmandu and mountain flights," said Rajendra Shakya, executive chairman of Guna Airlines.
Shakya said Guna is concerned about safety measures and that safety plans are carefully followed and regulated on a daily basis under the guidelines of ICAO and Civil Aviation Authority of Nepal (CAAN).Beechcraft 1900 -- a 19-seater aircraft -- simply called the 'Beech', is a pressurised twin-engine aircraft used as a corporate transport by several governments and the military around the world. The aircraft is capable of flying well in excess of 970 km/h and is the most popular in the domestic sector."With focus on safety and service, Guna aims to hold out a steady competition to the already established market-leaders in the aviation service sector," Shakya said.
The airlines has also brought various discount schemes -- for the time being -- for infant, group of 16 full adult fare paying passengers and for 11 full adult fare paying passengers.
The new airlines' entry in the national sky will centainly fuel competition, even though the Nerpali sky is not yet crowded.Guna empire was initiated as a small gold shop known as Guna Jewellers in Patan in 1984 and it has now grown into a multi-industry company in the short span of just 25 years.By 1997, Guna Cinema Pvt Ltd, Guna Co-Operative Ltd, Asian Food Cold Storage Pvt Ltd, Guna Colony Pvt Ltd, Guna Smriti Sewa, Gyan Bikash Secondary School, Stupa Housing Pvt Ltd were already in operation under the group, said the company.

NBL's fourth phase of VRS

Nepal Bank Ltd (NBL) has announced its fourth phase of Voluntary Retirement Scheme (VRS) from tomorrow.
"NBL employees who have worked for 20 years or more can put in their papers voluntarily," said Laxmi Raj Poudel, human resources chief. "They will be given a golden handshake of one-and-a-half months' salary for each year of their total service.
The bank has estimated the VRS will cost around Rs 800 to Rs 900 million. "The estimate stands correct if 1,000 employees will take VRS," he said adding that the number of employees who take VRS might be smaller than 1,000.
"Unlike the earlier three phases of VRS that were supported by the World Bank's Financial Sector Technical Assistance Project (FSTAP), this VRS will be funded by the bank itself," Poudel added.
The VRS idea was floated when the management of NBL and Rastriya Banijya Bank (RBB) was handed over to foreign executives in 2002 under FSTAP to re-engineer the two financial institutions and make them competitive.
One of the reform measures undertaken by the foreign management was introducing VRS to downsize these two overstaffed public sector banks. RBB has also implemented VRS five times and is planning a sixth phase.
At present, NBL has an employee strength of around 3,400. Assuming that 1,000 take VRS -- that may not apply, however -- the bank will in the next five to six years face a human resources crunch. "We have planned to inject around 300 young employees," he said adding that the bank has already planned on how to cope with the situation five years down the line.
Similarly, Agriculture Development Bank Ltd (ADBL) also announed VRS for the fourth time to reduce its workforce. Nepal Rastra Bank, the central bank, has also implemented VRS under the financial sector reform programme.
However, there is a risk of adverse selection as more productive employees could opt for VRS and join lucrative private banks leaving behind less productive employees. Though VRS is means to to give employees the golden handshake, there is always a danger of the productive ones productive.

VRS history
KATHMANDU: Agriculture Development Bank Ltd (ADBL) and Nepal Bank Ltd (NBL) have both announced VRS for the fourth time but Rastriya Banijya Bank (RBB) is planning to announce VRS for a sixth time. Aside from these three banks, NRB too has cut down on its staff size through VRS. To reduced staff cost to a manageable level and to turn the banks around, VRS is seen as a better alternative.

ADBL exercise
First phase (in 1991) -- 226 employees
Second Phase (in 2003) -- 313 employees
Third Phase (in 2007) -- 440 employees
Fourth Phase (in 2009) applied by 162 employees.

Nepal Bank Ltd (NBL) exercise
First Phase (in 2003) -- 1,464 employees
Second Phase (in 2004) -- 196 employees
Third Phase (in 2004) -- 708 employees
Total Employee under VRS -- 2,368
Fourth phase announced

NDF meet postponed

The Nepal Development Forum (NDF) meeting has been postponed indefinitely. Today's cabinet meeting postponed the meeting scheduled for May 12-14 in the valley.
The Finance Ministry has almost completed its preparation for the papers to be presented and invitation letters, said an official, "At the last moment, the latest political upheaval stopped all the process."
Some 900 participants were expected to take part in the inaugural ceremony on May 12, with 40 donors and five international export-import banks (EXIM) banks also taking part.
Earlier, the main opposition party Nepali Congress (NC) had hinted not to take part in the NDF meeting -- just like it did not take part in the NDF meet held during the royal regime -- alleging that the NDF strategy papers were prepared without consulting it.
Former finance minister and NC leader Dr Ram Sharan Mahat had blamed the Maoist-led government for not seeking consensus on the Nepal Development Strategy Paper (NDSP) to be presented at the NDF meeting.

Budget remains in surplus mode

In the first eight months of 2008-09, the budget remained at a surplus of Rs 11.3 billion in contrast to a deficit of Rs 7 billion in the corresponding period the last fiscal year. "An impressive growth of resource mobilisation relative to the government expenditure accounted for such a budget surplus in the review period," said Current Macroeconomic Situation, published today by Nepal Rastra Bank (NRB).
However, the government has spent less than it did in the same period the last fiscal year. The total government expenditure increased by 14.2 per cent to Rs 91.8 billion compared to an increase of 32.5 per cent in the corresponding period the previous year. "The deceleration in such spending was mainly due to a decline in the capital expenditure -- spending on development works," said the central bank.
Meanwhile, recurrent expenditure -- spending on salaries and wages -- increased by 20.1 per cent to Rs 61.4 billion. In the corresponding period the last fiscal year, recurrent expenditure had increased by 19.2 per cent.
In the review period, the government has a cash surplus of Rs 26.5 billion with the central bank.
Revenue mobilisation has also grown by 38.6 per cent to Rs 84 billion compared to an increase of 26.2 per cent in last fiscal year's corresponding period. The non-tax revenue has a huge contribution to the increase of revenue -- it grew by 96 per cent to Rs 17.0 billion compared to an increase of 15.9 per cent in the same period last fiscal. "Such an increase in non-tax revenue was on account of increase in dividends paid by some public enterprises to the government," the central bank said.
The overall Balance of Payment (BoP) recorded a significant surplus of Rs 34.8 billion in comparison to a surplus of Rs 13.6 billion in the corresponding period the previous fiscal year.
The y-o-y increase in consumer price inflation rose to 13.1 per cent in mid-March 2009 compared to 7.2 per cent in mid-March 2008. The price hike was fueled by price hike in food and beverages group.
The y-o-y wholesale price inflation also increased to 12.3 per cent in mid-March 2009 compared to a growth of 6.6 per cent a year ago. "The index of agricultural commodities, imported commodities and domestic manufactured commodities increased by 15.3, 10 and 8.8 per cent respectively in the review period compared to a growth of 4.9, 7.8 and nine per cent a year ago," said the report.
The overall y-o-y salary and wage rate index also rose by 20.3 per cent compared to a rise of nine per cent a year ago.

Tourist arrivals increase

It seems that Nepal Tourism Board's (NTB) regional marketing is paying off. Despite global recession and fall in global tourist movements, the South Asian market -- including India and China -- has pushed up the tourist arrivals in April.
Tourist arrivals in April -- in comparison to the same month last year -- increased by 15.8 per cent and touched 37,819. Last April, the number of tourist arrivals was 32,665, figures released by the Immigration Office, Tribhuvan International Airport (TIA), reveal.
For the first time in 2009, April witnessed a positive growth in visitor arrivals to Nepal, in a way challenging the worldwide decline in tourist arrivals. The entire Asian region registered a positive growth except Japan, said NTB.
Visitor arrivals from every market in South Asia registered a positive growth. India -- which occupies the largest share in visitor arrivals in Nepal -- recorded a whopping 27.3 per cent growth. Similarly, Sri Lanka, Pakistan and Bangladesh witnessed positive growths of 61.2 per cent, 29.4 per cent and 1.3 per cent, respectively.
Other Asian source markets -- China, Malaysia, Thailand, South Korea and Singapore -- regained the upward trend with 27.3 per cent, 68.5 per cent, 20.9 per cent, 73 per cent and 61.3 per cent of growth, respectively.
However, arrivals from Japan witnessed a marginal negative growth of 1.3 per cent.
The entire Europe and Oceania region registered a robust growth of 23.3 per cent and 16 per cent, respectively, in comparison to the same month last year. However, France and the Netherlands registered a negative growth of 3.7 percent and 9.4 per cent, respectively.
Arrivals from Canada and the USA also registered a positive growth of 20.2 percent and 5.8 per cent, respectively.
The increase in visitor arrivals reflects and reinforces the resilient nature of the tourism economy which can play a crucial role towards recovery of countries that are dependent on tourism. The remarkable growth in visitors' arrival from India and China -- Nepal's immediate neighbours -- and other major players in the intra-regional tourism underscores the need to focus on regional markets at a time of the economic crisis.
A total of 41,439 foreign tourists departed from TIA in April 2009. The number of Nepali arrivals stood at 43,444 while 45,886 Nepalis departed from TIA in April.

ADB president's mantra for meeting crisis head-on

Decisive action coupled with greater reliance on domestic demand will lead Asia out of the current downturn, ADB president Haruhiko Kuroda told a seminar audience at ADB's 42nd annual meeting in Bali.

The Governor's Seminar on "The Global Financial Turmoil and Implications for Asia" discussed how developing Asia's economies have been affected by the crisis and how they can contribute to a return to global financial stability and economic growth.

In his introductory remarks at the seminar, Kuroda noted that Asian governments have responded quickly to the crisis with appropriate financial, monetary and fiscal policies and so far the impact on financial stability has been limited. However, he warned that the "longer or deeper" the crisis becomes the greater the risk to the region's financial sector.

"This grave situation needs more vigorous and concerted efforts by all concerned to bring growth in the region back to its higher trajectory and support the global recovery," he said.

A recent ADB report forecast that developing Asia's economies will experience a sharp slowdown in growth as the full impact of the severe recession in industrialized economies is transmitted to emerging markets. The report, Asian Development Outlook 2009, released 31 March, 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 a record 9.5 per cent in 2007. If the global economy experiences a mild recovery next year, the outlook for the region will improve to 6 per cent in 2010.

Sri Mulyani Indrawati, Minister of Finance and ADB Governor for Indonesia, warned that a continued reversal in capital inflows could exert significant macroeconomic pressure on the region. Foreign capital took flight immediately following the onset of financial turmoil last September. Asia's stock market indexes fell even more sharply than advanced markets and currencies tumbled, placing significant pressure on country's balance of payments. Sri Mulyani said these pressures are one of the region's 'biggest challenges.'

'Kuroda said that the pronounced impact of the current global downturn on the region's growth underlined the risk of excessive dependence on external demand. He said developing Asia should rebalance its growth to get through the global crisis and boost its resilience to large external shocks in the long run.

$120-billion fund approved

BALI: Asian nations on Sunday agreed on the make-up of a $120-billion regional liquidity fund designed to counter the global economic crisis. Finance ministers from the 10-member ASEAN, Japan, China and South Korea approved the key components of the scheme, including individual country contributions, Indonesian finance minister Mulyani Indrawati said. Japan and China each committed $38.4 billion, or 32 per cent, to the fund, while South Korea would provide $19.2 billion. The reminder would come from the 10 ASEAN member countries. Four of ASEAN's richest members -- Malaysia, Singapore, Indonesia and Thailand -- would each contribute four per cent, or $4.7 billion, to the regional fund, dubbed the Chiang Mai Initiative. The Philippines committed to 3.1 per cent while Vietnam would contribute slightly lower than one per cent. The other members of ASEAN are Brunei, Laos, Myanmar and Cambodia. "This is very good news," ASEAN secretary general Surin Pitsuwansaid. -- DPA

Asia must preserve MDG gains

KATHMANDU: The economic crisis threatens to reverse decades of progress in poverty reduction and governments must do what they can to ensure that gains made in recent years are not lost because of the slowdown, a seminar audience heard today at the Asian Development Bank's (ADB) 42nd annula meeting in Bali. The seminar, titled 'Towards Inclusive Growth: Achieving the MDGs in Asia and the Pacific," saw policymakers, economists and development agency officials discussing the impacts of the crisis on MDG progress, andthe actions needed to protect and include vulnerable groups once economies in the region rebound. 2009 is past the halfway mark to 2015, the target year for accomplishing the eight MDGs. Asia has made strong progress on poverty reduction, with many countries expected to reach the target of cutting extreme poverty in half by 2015.

Sunrise primary share lures investors

The collection centres of Sunrise Bank's primary issue were busy today collecting primary share applications for the bank that has floated 37,50,000-unit shares worth Rs 375 million -- the largest among commercial banks -- at Rs 100 per unit par value each.
According to present directives of Nepal Rastra Bank (NRB), a commercial bank has to float 30 per cent primary shares of the paid up capital among the public which comes to 30,00,000-unit shares. "Sunrise Bank has floated 37,50,000-unit shares worth Rs 375 million, the largest ever Initial Public Offering (IPO) by a commercial bank," said Kishore Maharjan, CEO of the bank. After the primary issue, the paid up capital of the bank will touch Rs 1.25 billion.
Maharjan, the CEO of the 23rd commercial bank, also expected that the IPO would be oversubscribed by above 20 times to from over Rs 6 billion to Rs 7 billion. The issue will be open till Wednesday as the Securities Board of Nepal (Sebon) in its new regulation has reduced the IPO application duration to four working days.
In the earlier primary issues, investors complained of fake applications forcing Sebon -- the regulator of the capital market -- to inspect collection centres. "We inspected various counters around the Valley today," informed Niraj Giri, director of the board. There are over 70 collection centres throughout the country for the issue.
After Sunrise Bank, Prime Comercial Bank and Agriculture Development Bank Ltd (ADBL) are also planning to flaot their primary shares. Prime has appointed Citizen Investment Trust (CIT) and ADBL has appointed Ace Development Bank as issue manager. ADBL will float the largest IPO of Rs 960 million -- more than three commercial banks put together -- soon to the public.


Online profile filing
KATHMANDU: Investors can fill their forms online as well for Sunrise Bank's primary issue. NMB Bank Ltd -- the issue manager of Sunrise Bank -- has launched online share application service -- NMB e-Solutions: NMB online share application. An investor can fill the application form online and save time. After filing profile online, the investor gets ID code slip which can be registered at privileged counters of all branches of NMB Bank and Sunrise Bank including six other financial institutions throughout the country. After one gets ID code, one has to manually register at the privileged counters with mandatory documents like photos and photocopy of citizenship certificate and the amount equal to the number of shares sought. Aside from the financial institutions, the bank has opened six other counters at Dashrath Stadium for share applicants.


Nepse dips
KATHMANDU: Nepal Stock Exchange (Nepse) dropped by 5.74 points to close at 642.04 points from Sunday morning's opening of from 647.78 points. All the major markey players -- commercial banks, development banks and finance companies sub groups -- lost as only insurance sub group gaimed. For the first time, the capital market seems to have reacted from the day's political developments. Earlier the market never used to be bothered with political situation. Out of the 56 companies traded -- 16 gained and 33 lost. A total of 2,18,590-unit shares changed hands through 886 transactions. Though the Nepse opped, on Sunday -- the first day of the trading for this week -- the secondary market witnessed Rs 1,03,967,604 turnover.

Kist dominates share trading

Kist Merchant Banking and Finance -- recently upgraded to the country's 26th commercial bank -- pushed Global Bank to second position this week while dominating Nepse in terms of share units traded and trading amount with 79,000-unit shares of it changing hands in Rs 24.91 million. However, in terms of number of transactions Global Bank continued to top the chart with 705 transactions.
Kist Merchant Banking and Finance (with Rs 24.91 million), Global Bank (with Rs 24.88 million), Nepal SBI Bank (with Rs 21.35 million), Standard Chartered Bank Nepal (with Rs 19.85 million) and Sanima Bikas Bank (with Rs 19.40 million) were the top performers of this week.Of the nine-sub groups' indices, two -- hotels and trading sub-groups -- did not witness any changes in their indices as their shares were not traded. Similarly, two sub-groups -- manufacturing and others -- gained by 4.93 points to reach 438.21 points and 5.87 points to reach 605.08 points, respectively. The others sub-group gained because of Nepal Telecom as the company is distributing 25 per cent cash dividends from this week.
The other five sub-groups lost due to low investor confidence though the transaction amount increased by 8.37 per cent to rise to Rs 236.55 million against last week's transaction, according to Nepse.
The finance companies sub-group plunged by 23.45 points to dip to 732.75 points while hydropower companies' sub-group lost 16.73 points to drop to 843.63 points. Similarly, insurance companies sub-group shed 14.71 points to drop to 636.88 points and commercial banks sub-group faltered by 12.82 points to drop to 649.56 points. The development banks sub-group slipped by 7.10 points to drop to 821.93 points.
The major sub-groups' plunge dragged Nepse down by 9.24 points to close weekly trading at 647.78 points from last week's closing of 657.02 points.The 78-scrip sensitive index -- considered blue chip shares in the domestic market -- also lost 3.77 points to drop to 172.24 points from last week's closing of 176.01 points. Similarly, the float index -- calculated on the basis of real transactions -- also lost 1.18 points to close at 63.21 points from last week's closing of 64.39 points.
The week started in the red on Sunday as Nepse shed 7.98 points to drop to 649.04 from last week's closing of 657.02 points. Monday witnessed a further drop by 8.88 points but Tuesday onwards Nepse tried to rebound with a gain of 1.48 points to 641.64 points on Tuesday. The gaining trend continued on Wednesday and Thursday to close the weekly trading at 647.78 points.
The sole secondary market's five-day trading saw 1,26,983-unit of bonus shares of Birgunj Finance being listed.