Onion, garlic, chicken prices up

Prices of dry onion, garlic, French bean, bitter gourd and chicken increased by around six per cent in February compared to the same month last year due decline in supply because of low production and lean season, whereas prices of potato, cabbage, radish and cauliflower decreased by around five per cent due to increase in supply because of harvest season, according to a report.
Wholesale prices of fruits and vegetables regularly monitored by the Kathmandu Fruits and Vegetables Market revealed a declining trend for cabbage, radish, cauliflower, carrot, spinach and broad mustard leaf, while commodities like dry onion, garlic, bitter gourd and French bean indicated an increasing trend which is mainly due to decline in supply as compared to the demand, said the report prepared by the Ministry of Agriculture Development and World Food Programme (WFP).
They regularly monitor the food prices — in various markets across the country — which remained mostly stable over the past one month. The national average prices of coarse rice and wheat flour marginally increased by 1.2 per cent and 0.8 per cent and reached Rs 36 and Rs 39.8 per kg, respectively, it said.
Likewise, the price of blackgram slightly went up by 0.7 per cent, while that of broken lentil remained stable. Prices of edible oils like soybean and mustard showed a marginal increase but the price of red potato declined by 3.9 per cent, which is mainly due to increase in the supply as a result of the harvest period.
However, price trend in the regional markets showed somewhat different than the national trend. "The price of coarse rice remained stable in the major consumer markets, whereas it showed a declining trend in the hill and mountain markets with road access," the report said, adding that in the Terai markets, the price of coarse rice indicated an increasing trend. "Prices of wheat flour and broken lentil mostly showed an increasing trend over the past one month."
Wholesale prices monitored by Agriculture Enterprises Centre under the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) in the five large markets — Birtamode, Kathmandu, Butwal, Surkhet and Dhangadhi — showed a mixed trend with marginal fluctuations over the past one month, it added.
The year-on-year inflation released by Nepal Rastra Bank increased by 10.1 per cent in February compared to seven per cent over the same period last year. The food and beverage group price index went up by 10.7 per cent against the 4.1 per cent of last year. The price index of transport has moderated to nine per cent increase as compared to 18.5 per cent over the same period last year.
Likewise, supply situation is so far normal due to smooth operation of transportation services across the country, it said, projecting that prices of most food commodities are likely to remain the same as in the past month.
" However, the increase in public transport cost including cargo carriers by more than 3.7 per cent effective from March 8 will likely to contribute to the rise of food prices mainly in the hill and mountain markets, whereas prices of lean season commodities are expected to remain high until the next harvest.

Petro traders threaten to halt supply from April 7

Three major stakeholders of the petroleum business today threatened to halt petroleum supply from April 7, if the government does not revise its new decision.
Nepal LP Gas Industries Association, Nepal Petroleum Dealers’ Association and Nepal Petroleum Transporters’ Association, organising a press meet today, announced their protest programmes starting from April 2 and said they would completely halt the distribution of petroleum products from April 7, if the government does not roll back the Petroleum and Gas Trading Monitoring Directives-2069.
The government had introduced the directives in mid-March, opening up the petroleum business for the private sector. However, traders have been opposing the directives, claiming that it has been introduced in the interest of some big business houses.
The three major players in the business criticised the directives published in Nepal Gazette, and have said that the directives will hurt small traders currently in the business.
"The criterion set for the private sector to invest in the petroleum business is not logical," they said, threatening the government to stop petroleum supply.
The directives has set refilling capacity of 250 tonnes per day for liquefied petroleum gas (LPG) plants and a stock capacity of at least 500 metric tonnes. The royalty of LPG bottlers has been increased to Rs 2.6 million and the current capital of the company should be Rs 500 million.
Similarly, petroleum dealers must have three tankers to carry petroleum products. The dealer should load at least 3,000 litres at a time. The provisions are unsuitable for traders, they said, adding that they do not have any option other than to protest. We will close our pumps and bottling plants from April 7, they said.
Last week, the associations had submitted their demand to chairman of the interim election government Khil Raj Regmi.
The country needs around 350,000 litres of petrol and around 400,000 litres of diesel every day under normal conditions and about 31 per cent of petroleum products is consumed in Kathmandu valley. In the first seven months of the current fiscal year the country has imported Rs 59.47 billion worth petroleum products from India due to rising consumption not only for transportation needs but also for operating the industries due to lack of regular power supply.

Banks can withstand high shocks

The central bank has claimed that banks have sound financial health.
"The stress test results of commercial banks as of mid-July 2012 on credit, liquidity and market shocks revealed their ability to withstand high shocks," according to Nepal Rastra Bank's (NRB) Financial Stability Report.
Among the 32 existing commercial banks, a standard credit shock would push capital below the regulatory minimum in 22 banks, and two commercial banks would be under-capitalised, it said, adding that sustained deposit withdrawals over five consecutive days would render five banks illiquid, and liquidity ratios of 17 banks would fall below 20 per cent in the event of sudden large withdrawals by institutional depositors. "Given the amount and nature of exposure, commercial banks are relatively less vulnerable to market shock."
While the resilience of the commercial banks to credit and market shocks have improved over time, the liquidity scenario analysis shows some potential risk, it added, though the soundness of financial institutions was maintained with adequate capital, liquidity and profitability buffers and improvement in asset quality.
The banking sector is adequately capitalised with the overall industry average capital ratio of 18.2 per cent. The Capital Adequacy Ratio (CAR) of class 'A', 'B' and 'C' institutions stood at 11.5 per cent, 20.5 per cent and 23.1 per cent, respectively, in mid-July 2012, which is well above the minimum regulatory requirement.
Likewise, the asset quality of commercial banks has shown some signs of improvement with the reduction of non-performing loan (NPL) ratio from 3.2 per cent in mid-July 2011 to 2.6 per cent in mid-July 2012. The average NPL ratio of banks and financial institutions stood at 6.1 per cent with finance companies having the highest ratio of 10.7 per cent followed by development banks with 4.9 per cent, according to the report.

TeliaSonera refutes allegations

TeliaSonera has refuted allegations related to the commercial relationship between Ncell and Nepal Satellite Telecom (NST).

"Recently, there have been a number of demonstrations targetting Ncell, falsely alleging it of a commercial relationship with NST, incorrectly ascribing to operational responsibility," the principal shareholder of Ncell said, adding that the allegations are totally unfounded and incorrect as a matter of law and fact.

"Ncell has not acquired NST and has no plans to do so nor does it intend to merge with or take over NST," it said, stressing that operational responsibility over NST’s activities lies with its own management and not with Ncell.

"TeliaSonera is in negotiations with shareholders of NST to evaluate consolidation opportunities pursuant to which a capital investment could be made by TeliaSonera in NST, enabling NST to provide faster and better service to its customers."

As is customary practice, while such negotiations are being conducted, confidentiality obligations are in place, which do not permit disclosure of the substance of these negotiations, but suffice it to say that if the current negotiations between TeliaSonera and NST are successfully concluded, both parties are committed to respecting employee and other contractual obligations in compliance to the law of the land, TeliaSonera added.

"Based on the facts, it is the earnest hope and desire of TeliaSonera and Ncell that the present demonstrations are halted immediately, as they are unfounded and disruptive and are impairing Ncell’s ability to continue providing uninterrupted quality telecommunication services to the people."

NLG Insurance to go public

NLG Insurance is floating primary offering worth Rs 67.5 million from tomorrow.

The non life insurance firm has offered its ordinary shares at face value of Rs 100. Among the total 675,000 ordinary shares, 27,000 units are allotted for the company's staffs, 33,750 units for mutual funds and the remaining 614,250 units are meant for general public.

The Initial Public Offering (IPO) managed by Civil Capital will be closed by April 2 at soonest or by April 12 at latest in case of under-subscription, it said. The insurance company's paid up capital Rs 157.5 million at present will be increased to Rs 225 million following the public offering.

Insurance companies have to increase their paid up capital as the regulator ¿ Insurance Board had directed life insurance companies to increase their paid up capital to Rs 500 million and non-life companies to Rs 250 million by the end of current fiscal year. NLG Insurance is planning to meet the regulatory paid up capital requirement by issuing bonus and right shares to the shareholders before the end of the current fiscal year.

At present there are 25 insurance companies, 16 non-life insurance companies and nine life insurance companies with Rastriya Beema Sansthan (RBS) that provides both life and non-life service.