Friday, February 29, 2008

Industrial Output dips

An umbrella organisation of Nepali private sector, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today hold an interaction on the present power crisis and presented some suggestions to the government.
"The present power shortage has hit the industries hard," Chandi Raj Dhakal, president of the FNCCI, said, adding that there has been more than 60 per cent reduction in the production due to regular load shedding. He said that private sector is ready to invest in the hydro projects, if the government gives opportunity.
Dwarika Nath Dhungel, senior researcher at the Institute For Integrated Development Studies (IIDS) and Santa Bahadur Pun, jointly presented a paper on 'Current situation of the power shortage'. They suggested the government to speed up the construction of ongoing hydropower projects and urged the private sector for generation, transmission and interconnection of the electricity.
"Nepal Electricity Authority (NEA) must be developed as an autonomous body with the representation of professionals," they suggested.
Rohini Thapaliya, coordinator of Commodity Association Council (CAC), on the occasion, said that the power supply is 23.5 per cent less than the present demand. He also suggested the government to declare power crisis as a national crisis and give it more priority.

Thursday, February 28, 2008

Nepal suffers FDI outflow

Nepal suffered net foreign direct investment (FDI) outflows during the fiscal year 2006, according to the newest edition of the Asian Development Bank's (ADB) South Asia Economic Report.
India is by far the leading host country for FDI in South Asia. It received around $19.4 billion in the fiscal year 2006 or about 79.9 per cent of total regional FDI. India's dominance is, in large part, due to the size of its economy. However, India's policy reforms geared toward liberalisation also played an important part.
Other countries in the region that also fared well in attracting more FDI were Pakistan and Sri Lanka, with FDI growth of 136.5 per cent and 92.7 per cent, respectively.
"Pakistan, the second largest economy in the region, has great potential to further improve FDI inflows and FDI will play an important role in Afghanistan's economic growth," said Juan Miranda, director general, ADB Central and West Asia Department.
South Asia could become one of the more attractive FDI destinations in developing Asia, but the region will have to improve its business climate and build investor confidence to reach its full potential, according to the report.
In South Asia, FDI has been increasing rapidly since 2004. In fiscal 2006 alone, FDI inflows reached a high of $24.3 billion, a 132.9 per cent increase from 2005 and the highest FDI growth rate in recent years. This is in sharp contrast to the dismal FDI performance in the
region during the early 2000s.
Liberalisation policies, increasing private sector participation and regional trade agreements have resulted in improved FDI inflows to South Asia. However, the level of FDI inflow into South Asia is still low compared with other Asian sub-regions due to poor infrastructure, restrictive labour policies, weak regulatory systems, and rampant corruption.
"Increased foreign investments in South Asia would promote further regional integration and globalisation," Kunio Senga, director general, ADB South Asia Department, said, adding that FDI has the potential to provide great business opportunities to foreign companies while helping develop domestic economies.
At the country level, macroeconomic and political stability, appropriate regulatory policies and infrastructure development are needed to increase FDI, according to the report, the third in a series of biannual reports on economic and development issues in South Asia.
Regionally, harmonised cross-border regulations, including a unified customs system, would facilitate the flow of people and goods and make investing in the region more attractive.
In developing Asia, inflows of FDI, or the foreign acquisition of at least 10 per cent of a firm's assets, have risen tremendously, largely due to the liberalisation of investment policies and the lowering or removal of capital controls and other investment barriers.
The major source countries of FDI in South Asia are predominantly in developed regions – North America and Western Europe. But other important FDI sources are East Asia and the Middle East.

Secured Transactions Registry in offing

"Implementation of Secured Transactions Registry (STR) will reduce multibanking and disputes between the banks over collateral," said Krishna Bahadur Manandhar, acting governor of Nepal Rastra Bank, the regulatory authority of the banks.
He was speaking at a workshop organised by International Finance Corporation (IFC) and World Bank (WB) today to discuss the findings and recommendations of the World Bank-IFC's feasibility study for the establishment of a secured transactions registry in Nepal.
"Though Secured Transactions Act was introduced in 2005, it could not be implemented due to lack of a clear provision of the agency that acts as Registry," he said, adding that the Act was introduced to facilitate use of movable assets as collateral in the country.
It provides for an electronic, centralised electronic registry to file pledges on movable assets and will become operational only after this registry is established.
"The government is establishing registry within the month of May," said a source at the Ministry of Finance (MoF). And the STR will come into effect within a year.
In this regard, the World Bank - IFC is providing assistance to the
government to establish a modern, state-of-the-art secured transactions registry.
Sevi Simavi, investment policy officer, FIAS-World Bank Group gave presentations on key recommendations of the team. They have conducted a feasibility study to provide guidance on the details of the registry design, operations, and business model.
According to the team recommendation, a Public-Private Partnership (PPP) will be a model registry agency. Under this arrangement, the MoF is creating a new Secured Transaction Registry Office (STRO) and the Credit Information Centre Ltd (CICL) will be appointed as the private partner, responsible for the day-to-day operation of the registry.
The study has suggested Credit Information Bureau (CIB) as the registry agency. The registry will be a 24/7, fully electronic, english-language, web-based system, which will allow lenders to record pledges on movable assets, including motor vehicles.

The government will establish the STRO and enter into a contract with the CICL within the next six months. Meanwhile, a government-appointed committee will be established to draft the registry regulations, which will be issued before the registry goes live. The whole process is expected to take twelve months.
Training for lenders and the legal community, as well as awareness raising for the public at large, will be conducted during the implementation phase.
Everett Theodore Wohlers, consultant of FIAS - World Bank Group - gave presentation on 'Implementation Roadmap and User's Perspective' and Cambodian demo.
Radhesh pant, president of Nepal Bankers' Association (NBA) gave his comments, on the occasion. The NBA, lenders and financial institution have expressed support and gave some suggestions for the initiative. They will also be involved in the planning and implementation phases of the project.

Wednesday, February 27, 2008

Gold hits record

Gold price touched today historic high of Rs 19,720 per 10 gram — Rs 23,001 per tola — in the domestic market. The price increased by Rs 220 to Rs 19,720 per 10 gram from the yesterday's Rs 19,500.
"The price of precious yellow metal has gone up due to continuous weakening of dollar," Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association's (NEGOSIDA), said adding that the price may go up to Rs 25,000 per tola (11.664 gram).
The demand has been continuously rising in the largest gold consuming countries like India and China that has also fuelled the price hike.
Local gold trader are a worried lot as the domestic market of Nepal's size can do nothing to stop this bullish trend.
The price rise in global crude prices that crossed $102 per barrel today, fear of recession in the US, weak global stock market and further weakening of dollar pushed the price of gold up.
According to Shakya, Fed rate cut has also pushed the price up as people started heavy buying. "Due to slowdown in global share market and US market people tried to buy gold against the security of inflation," he added.
The precious yellow metal in the local bullion market opened at Rs 19,635 on Sunday and remained constant for two days. But yesterday, it plunged by Rs 135 to Rs 19,500. However, today it flared again by Rs 220 to Rs 19,720 per 10 gram setting a new record.
Similarly, silver price is also witnessing a bullish trend. It increased by Rs 11 today to Rs 375 per 10 gram from yesterday's Rs 364.
A cut in production of gold in South Africa due to power shortage
and low mining have also contributed to the price hike. It is predicted that the gold will touch $1000 per ounce.
The price of gold surged to a record high point of $964.99 per ounce today morning in London. The previous record price was $953.91 on February 21.

Tuesday, February 26, 2008

Highlights of Railway Budget 2008-09

Highlights of the Railway Budget 2008-09, presented in the Lok Sabha Tuesday by Railway Minister Lalu Prasad:
More trains in peak season Rajdhani and Shatabdi trains to have more modern coaches Cash surplus in 2007-08 pegged at Rs 250 billion Indian currency (IC)
New earnings of 21 percent in 2007-08
Rs.492.50 billion invested in new projects Operating ratio a favourable 76 percent
Additional Rs 200 billion earned on freight services
790 million tonnes payload target achieved 15,000 automated ticket machines by 2009
It ensures free season tickets to girl students till graduation 50 per cent concession for AIDS patients, senior women citizens and Ashok Chakra awardees.
It ensures that arrival time will be printed on tickets wait-listed e-tickets to be introduced. "Tickets to be confirmed through mobile phones, 20,000-km of high-density network planned 30 major stations to have multi-level platforms," it states.
Hospital trains to be introduced with healthcare and operating facilities 16,548-km of railway track to be replaced and railways to build cargo terminals in 50 major locations.
Private companies can also have their own cargo terminals on railway land

NT shares undersubscribed

Though the last day of applying for the shares of Nepal Telecomm (NT), today for public, saw a huge crowd at various collection centres, it is said to be under subscribed.
The government had planned to raise at least Rs 9 billion by selling NT's share — 4.5 billion in the first phase now and 4.5 billion in the second phase, later. "However, it seems that the government will be able to raise only three billion rupees now," said Nandanhari Sharma, general manager of Citizen's Investment Trust (CIT), the sales manager. "But it is premature to predict as we have called for the sealed bidding," he said.
The price of per unit share has been quoted at Rs 600 minimum after adding Rs 500 premium to the face value of Rs 100 for each share.
As a part of divestment and privatisation plan, the government planned to sell — in the first phase — 7.5 million unit shares of NT to public through an auction from January 23 to February 26.
Earlier, it had already sold five per cent of the equity to the Telecom's employees at the rate of Rs 90 per unit.

Monday, February 25, 2008

Nabil bank gets 5A(2) ranking

Nepali banking sector is in no way lagging behind its South Asian counterparts. Nabil bank has proved it by becoming the first bank in Nepal to receive an international rating.
Dun & Bradstreet (D&B), one of the leading credit rating agencies that has rated the top South Asian banks, rated Nabil 5A(2) — that indicates it to be a financially sound institution with a consistent performance record.
With a tangible net worth of approximately Rs 2 billion, Nabil bank is poised towards steady growth with its current size, reach and vision of the present management. "In the D&B Rating system the 5A is a reflection of the size of the bank and 2 is a rating given on a scale of 1 to 4, with 1 being the best," said Saikat Poddar, regional sales director of D&B handing over the Impact Report to Anil Shah, CEO of the bank.
"The business analyses team of D&B has observed that Nabil has one of the lowest NPA levels in the industry that demonstrates good credit management. However it needs to step-up its profit retention ratio and incorporate advanced risk management systems in order to meet the envisaged growth path," Poddar added.
D&B — that has an impeccable global reputation for ratings of institutions around the world — completed a comprehensive company review of Nabil and presented company impact report and a D&B Rating of the bank today. "This is a pioneering step taken by Nabil bank and yet another milestone for the nation's first joint venture bank in our surge ahead to be Nepal's Bank of 1st Choice," Shah said, adding that in its surge ahead Nabil needs to benchmark itself against the highest of international standards and continuously look at what it does to improve itself.
"For us the Impact Report done by D&B is an opportunity to be evaluated by a global leader in this area of expertise and receive feedback on where we stand and also identify areas in which we can improve," he added.
After the completion of evaluation and review D&B today also issued a certificate profiling the bank. The certificate of D&B D-U-N-S ® Number was also provided to Nabil Bank by D&B. D-U-N-S stands for the Data Universal Numbering System and the D&B D-U-N-S ® Number is a Business Identification tool that is accepted worldwide and endorsed by world bodies such as the UN, the American government, the EU, the Australian government, the International Standards Institute and more that 50 other global business and trade organisations.

Sunday, February 24, 2008

RBS to complete auditing of last six years

Rastriya Beema Sansthan (RBS) is committed to do its auditing of last six years soon. Speaking on the occasion of its 41st anniversary, Rajesh Rajkarnikar, the newly appointed CEO vowed to complete the company's long-due auditing of almost six years within one-and-a-half year.
Navraj Mudbhari, general secretary of the Financial Institution Employees' Union of Nepal (FIEUN) - RBS chapter, urged the regulatory authority, Insurance Board (IB), to scrap one per cent service charge. "At least in life policy, it should be scrapped as it is refundable and in the case of non-life also, it should be charged on the profits only," he said, adding that RBS needs aggressive marketing to compete with the private players. "RBS should also explore lucrative and profitable investment opportunity," he said.
Devendra Pratap Shah, chairman of the regulatory authority of the insurance companies, said that the Board is reviewing the service charge policy. "However, RBS also has to look ways to reduce its huge cost involved in training that comes to 13 per cent and overhead cost that comes to eight per cent," he suggested.
The only life-and non-life insurance company in the country has the authorised and issue capital of Rs 100 million. It is planning to increase authorised capital to Rs 500 million and issue capital to Rs 350 million. RBS is also in the process of separating its life-and non-life sector business.
Established in 2024 BS, RBS has 47.53 per cent government's equity, apart from Nepal Rastra Bank's 29.25 per cent, Nepal Bank Ltd's 10.97 per cent and public's 12.24 per cent.
After 1990, the country adopted free market economy making the private players' entry easy. As a result, there are eight life insurance companies, including the four new that got licence recently, 13 non-life insurance companies and RBS.
They are providing employment to more than 2,500 with more than 10,000 insurance agents and 62 surveyors.

Saturday, February 23, 2008

UML's vision for Nepal

For the present state of the country, everyone blames political leaders and their lack of vision. However, political parties have also for long felt that they should bring — in black and white — their vision of a prosperous, developed and just Nepal.
One of the key players in Nepali politics, Communist Party of Nepal (United Marxist Leninist) — CPN (UML) — became the first and brought its 20-year vision for a just and prosperous Nepal.
The 20-year road-map — prepared by various groups of intellectuals including Prof Dr Mangal Siddhi Manandhar, Dr Dilli Raj Khanal, Dr Govind Thapa, Dr Pusparaj Rajkarnikar, Bhim Prasad Neupane and Bharat Mohan Adhikari as coordinator — has eight chapters dedicated to political and economic history of Nepal, Jana Andolan II, challenges, vision for development, policy for economic prosperity and human development, foreign policy and Karnali.
"Nepal has vast natural and manpower resources. It has everything that a country needs for its development but still its one of the poor countries, why," writes Madhav Kumar Nepal in the preface of the book. "Due to lack of vision and management."
Nepalis are politically more conscious in South Asia but still they are far behind in the development index and are forced to fight for democracy time and again. If democracy has to survive, there is no alternative to the economic prosperity and development. Political consciousness without economic independency will fail and has failed. We have experienced it all these years.
Thus, at the moment, vision of a prosperous and developed Nepal is what Nepalis want and CPN (UML) has brought that vision, where it has critised some of the past policies and lauded some others. There are some realisations and some hypothesis also.
Vision Nepal - a 20 year road-map for a just and prosperous Nepal — said to be the brainchild of UML's chieftain Madhav Kumar Nepal — is a capsule for the ailing country. It might encourage other parties and intellectuals also to think seriously for the country.

Friday, February 22, 2008

ADB vice-president Jin returns

Liqun Jin, vice-president of the Asian Development Bank (ADB) today concluding his four-day long visit to Nepal reiterated ADB's commitment to assist Nepal's social and economic development.
"The Constituent Assembly election is a vital step forward," he said, lauding the government's role of commitment to nation's reform and development efforts.
During his stay in Nepal, he met with the Prime Minister, ministers and senior government officials apart from giving a key-note address at the inaugural of Nepal, donor consultative meeting. He also visited the ADB-funded development projects.

Thursday, February 21, 2008

Consider landlocked nature of Nepal: PM Koirala

Prime Minister Girija Prasad Koirala, inaugurating Nepal Donors Consultation Meeting here today, urged international community to consider landlocked nature of Nepal while projecting any programmes for it. "Being a landlocked country, the emotions of people and situation are different from others, therefore, we need full cooperation from our development partners," the premier said.
"As land-locked country has its own problems, Nepalis think that being land-locked is one of the disadvantages," he said.
Expressing gratitude to the international community for their support for a struggle to restore democracy in Nepal, the octogenarian Prime Minister also led emphasis on April 10 Constituent Assembly Election that is going to address everyone’s grievances.
Finance Minister Dr Ram Sharan Mahat, on the occasion, said that the meeting is to apprise the donor community about immediate development priorities and peace process. "A full-fledged National Development Forum will be held in 2008, after the CA polls, where Nepal will seek international funding," he said adding that this one is a face-to-face consultation rather then pledging forum. He also gave the overview of recent economic situation of the country. "The revenue collection has been satisfactory, tele-density increasing and GDP is looking upwards," he concluded, adding that there is a light at the tunnels’ end.
Nepal has brought three-year interim plan for its transition period and has invited its all well-wishers to discuss on peace-process, CA poll and development needs.
On behalf of development partners, Linqun Jin, vice-president of Asian Development Bank (ADB) said that Nepal is passing through a critical moment in its history.
"This moment calls for the strongest leadership and vision. The successful implementation of the Comprehensive Peace Accord and subsequent agreements are vital," he said.
Finance secretary Vidyadhar Mallik, welcomed the participants, while, Krishna Gyawali, joint secretary, Foreign Aid Coordination Division at the Ministry of Finance thanked them.
Meanwhile, civil society members demonstrated accusing the government for excluding them in the meeting. "We strongly oppose the opaque and exclusionary decision of the government and urge to ensure Civil Society participation," said Dr Arjun Karki, president of NGO Federation.

Wednesday, February 20, 2008

NDF preparatory meeting

A two-day long Nepal Donor Consultation Meeting (NDCM)-2008 is being organised in Kathmandu on February 21-22 to discuss peace process and development challenges.
The meeting basically aims at communicating with Nepal's development partners on its challenges and opportunities of peace and development in the context of post Jana Andolan-II, said finance minister Dr Ram Sharan Mahat, at a pre-event press meet, today. "Peace and development will be a major topic for the discussion, in which the government will apprise its development partners on current situation," he said.
The meeting also seeks to establish a close contact between government and development partners as well as government and Nepali citizens for launching peace and development activities together, he said, adding that the donors would have a chance to acquire first hand information on peace process and development challenges.
Dr Mahat further added that it would be an appropriate forum to build a climate of trust, cooperation and understanding through mutual dialogue, information sharing and collaboration between development partners and civil society. "Though the meeting is not a pledging conference," he said that the government would brief on the overall situation and need of resources to meet development challenges.
Besides evolving political situation and stabilisation of peace process, government also plans to brief the donors about Three-Year Interim Plan (TYIP) and need for ensuring resource availability for its implementation.
Other issues that the government is putting forth for discussion include the urgency of delivering peace dividend to people and need to disseminate the progress made on various reform initiatives as well as the constraints in managing the current state of transition.
Though it is not Nepal Development Forum (NDF), it is a prelude to the full-fledged NDF which the government plans to host sometime after the election, when the country will have reached a new phase of political stabilisation, Dr Mahat added.
The meeting will have four sessions and two presentations will be made on TYIP and Development Deliverables by Dr Jagadish Chandra Pokharel, vice-chairman of National Planning Commission.
Finance secretary Vidyadhar Mallik will make a presentation on 'Economic Update: Challenges and Road Ahead'. A roundtable session with representatives of political parties and civil society on 'Nepal's Evolving Peace Process and Development Derivatives' will also be held and Kul Chandra Gautam, former assistant secretary general of the UN is scheduled to moderate it.
Prime Minister Girija Prasad Koirala is scheduled to inaugurate and address the meeting on Thursday. More than 125 donor representatives from development agencies (both bilateral and multilateral) are expected to take part in the meeting.
Liqun Jin, vice-president of the ADB will address the meeting representing Nepal's development partners.

CA poll vital for Nepal's development: Development partners
Nepal's development partners think that Constituent Assembly election is the vital step in Nepal's move to peace and development.
"However, Nepal's case is the unique in the world as it has witnessed comparatively peaceful transition. Not only that during the period of conflict also, the development process was continuing, though in a slower pace," they say.
During the last decade, seven remote districts were connected by roads and some 2.6 millions, mostly in Tarai, received citizenship. Despite huge challenges and some lost opportunities, these positive achievements during a period of conflict should be recognised," states a press release issued by the donors' community including the World Bank, Asian Development Bank, Canada, Denmark, European Commission, Germany, Finland, Norway, Switzerland, United Nations and United Kingdom.
They promise to support government's measures to strengthen peace process and improve the delivery of development benefits to the people. "Inclusive and credible elections, held in a free and fair atmosphere, are critical for the peace process. A representative Constituent Assembly is a long standing promise that can help ensure all Nepalis their stake in the creation of a new and inclusive state," reads the release.
They also pointed out that Nepal's future depends on its political leaders working together to take the country through these difficult time, implementing commitments and agreements made, supporting the rule of law, pushing forward with vital economic reforms that will create jobs and delivering the development dividends that only peace can provide.
"Formidable challenges remain and main obstacles must be overcome to build the 'peaceful, prosperous and just New Nepal', including social exclusion, rising inequality, limited access to often poor quality basic services including school children leaving school early and increasing social disruption and instability, particularly in the Terai."
They think that Nepalis want peace and stability and they also want the chance to make a decent living. Urgent attention should be given to the economy. Recent electricity and fuel shortages undermine enterprise and are a burden on daily life. We look forward to discussing the government's strategy to help create a safe and secure environment for sustainable economic growth and measure to help create more and better jobs for the people of Nepal, including the poor and excluded.

Tuesday, February 19, 2008

ADB vice-president in Nepal

Liqun Jin, the Asian Development Bank (ADB) vice-president of operations arrived in Kathmandu for a four-day long official visit today.
Jin is in Nepal at the invitation of government of Nepal to participate in the Nepal Donors Consultation Meeting scheduled for February 21-22 in Kathmandu. He will deliver the opening speech at the meeting on behalf of Nepal's development partners, ADB states in a press release.
During his visit, Jin is also scheduled to meet Prime Minister Girija Prasad Koirala, Finance Minister Dr Ram Sharan Mahat, Water Resources Minister Gyanendra Bahadur Karki and Physical Planning and Works Minister Hisila Yami and other senior government officials.
He will discuss ADB's assistance programmes and hold consultations on the current situation in Nepal. He is also scheduled to meet with the head of UNMIN Ian Martin and leaders of the Communist Party of Nepal (Maoist).
Jin — who joined ADB in August 2003 and is responsible for operations of South Asia Department, Central and West Asia Department, and the Private Sector Operations Department — will also visit ADB-funded project sites.
Prior to joining ADB, Jin was the vice-minister of finance of the People's Republic of China (PRC). He served as Alternate Governor for the PRC at ADB, the World Bank Group and the Global Environment Facility.
ADB began its lending operations in Nepal in 1969. At the end of 2007, cumulative funding to Nepal totalled 123 loans and grants totalling $2.5 billion and 270 technical assistance projects totalling $127.8 million.
ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development and good governance. Established in 1966, it is owned by 67 members — 48 from the Asia. In 2007, it approved $10.1 billion of loan, $673 million of grant projects and technical assistance amounting to $243 million.

Rock nationalisation is best deal for the taxpayer: Brown

London: Gordon Brown yesterday mounted a strong defence of his decision to preside over the first nationalisation of a major British high street bank in a quarter of a century when he declared that the government had put the interests of taxpayers first in its handling of Northern Rock.
As the Tory leader David Cameron called on Brown to sack Alistair Darling, his chancellor (finance minister), the prime minister dismissed Tory charges that the government had created an 'economic calamity' by delaying its decision on Northern Rock.
In a joint appearance with Darling in Downing Street less than 24 hours after the government's decision to place Northern Rock into "temporary public ownership", Brown said the government would have been failing in its duty if every possible option had not been considered.This meant giving time for private sector bids to be put forward — from Virgin, Olivant and a Northern Rock management buyout — and for the government to take time in considering whether they were fair to the taxpayer.
"We will and always have put the interests of taxpayers first," the prime minister said at his monthly press conference. "The soft option would have been taking the easy road out and putting it into the new private sector bidders. The long-term question was what was the best interests of the taxpayer."Brown said both final bids — Virgin and the management buyout — failed tooffer sufficient guarantees to the taxpayer. "Given that both bids that came forward involved a subsidy from government without an appropriate level of return for taxpayers, after detailed consideration and independent advice, the chancellor concluded that the right decision is to hold Northern Rock in temporary public ownership, to be run at arms' length fromthe government under professional management until market conditions change.
"The prime minister dismissed claims that the government was to blame for the first run on a British bank since the 1860s as he blamed the worldwide credit crunch. "We are dealing with a global financial turbulence that is affecting every country, but particularly the main industrialised continents," he said.
Within hours of Brown's appearance in Downing Street, Cameron called for the chancellor to be sacked. George Osborne, the shadow chancellor, described Darling as a 'dead man walking'.Drawing a parallel with Black Wednesday in 1992, his formative political experience when as an adviser to Norman Lamont he witnessed at first hand Britain's ejection from the European exchange rate mechanism, Cameron said chancellors should resign when they presided over an 'economic calamity'.
"As soon as legislation goes through parliament the prime minister must restructure his government," the Tory leader said as he spoke of how he had learned lessons from Black Wednesday when Lamont remained in office for a year until he left the cabinet. "He needs to have a chancellor with credibility and he needs to do it quickly." The Tories, who will vote against the legislation that will nationalise Northern Rock this week, said the government should have placed it under Bank of England reconstruction, a form of public administration.Cameron said this would have halved the taxpayers' liability and would not lead, as the government claims, to a 'fire sale' of the bank.
"The Conservative party will not be supporting nationalisation. We will not back a decision that takes our country back to the dark days of the 1970s." Cameron blamed Brown's flirtation with the idea of a snap election last autumn for the delay in deciding the bank's future. "We have heard from a number of sources, from people who were advising the government, they were being told: get on with it. There is only one thing worse than a decision to sell badly or nationalise badly - the worst thing of all is to delay. I think the election probably had something to do with it."
But Darling rebuffed Tory claims of government dithering, insisting that there was no need for the taxpayer to make a big loss. He said, "At the moment the Bank of England has lent money to Northern Rock, every penny ofwhich is secured against Northern Rock's assets." He added that not one of the guarantees offered by the Bank had been called in.
He said, "Northern Rock does have a good mortgage book, and when the market conditions improve and the housing market comes back, we will be able to return the bank to the private sector, and will get the Bank of England's money back." Liberal Democrat treasury spokesman Vincent Cable, who called from the start for temporary nationalisation, called for an independent audit supervised by the Bank of England to establish the quality of Northern Rock's assets and loan book. Pledging his party's support for the legislation, Cable said job losses were inevitable, but added, "At least the bank and the north-east have some long-term hope." - The Guardian

Sunday, February 17, 2008

Nepal gets fifth telephone operator

Nepal Satellite Telecom Pvt Ltd (NSTPL), a Nepal-Pakistan-Bangladesh joint venture company, has bagged licence to provide basic telephone services in the Mid Western and Far-Western parts of the country.
Nepal Telecom Authority (NTA) today awarded the licence to NSTPL in which Nepali investors have 95 per cent share, whereas three per cent is held by Pakistan Mobile Communication Ltd and two per cent by Sewa Telecom of Bangladesh.
The company has already paid Rs 2.5 million for licence and pledged Rs 5 million as performance guarantee with the NTA.
As per the terms of reference of licence, NSTPL will have to set up main switching network in Mid-Western Region within the next 15 months and distribute at least two telephone lines each to 273 VDCs. The company also has to upgrade its system capable for distributing on-demand telephones to 50 per cent of the total area of the region.
Following the expansion of the network, NSTPL will be allowed to expand its services to rural areas of Western and Far Western development regions within the period of 30 months after licence was issued. After having expanded its capacity to provide on-demand telephone connections in all western regions, the company will be then allowed to expand its services to other parts the country.

Saturday, February 16, 2008

Bottlers' Nepal pushes Nepse up

Bottlers' Nepal — that has a plan to capture 80 per cent of the market share within next two years — pushed the Nepse up this week as it topped the chart with a transaction worth Rs 309.99 million. It also pushed the manufacturing group up by 24.44 points to 385.40 points.
Khetan Group, a prominent business group of Nepal, has bought 4,29,000-unit shares of Bottlers' Nepal — the producers and marketeers of multinational softdrink brand Coca Cola in Nepal.
Though the week started on a strong note with 25.88 points growth on Sunday, the first day of the trading, it slowed down on the other days. The Nepse index closed at 795.89 points — a growth of 45.03 points from last week's closing of 750.86 points — on Thursday, the last day of the trading for the week. For the first three days, on Sunday, Monday and Tuesday, the Nepse flared but on Wednesday, it dropped by 4.52 points to 809.91 points from Tuesday's closing of 814.43 points. On Thursday also, Nepse plunged by 14.02 points to close at 795.89 points.
Stocks of commercial banks, Development banks and Insurance group — all the market leaders, except the Hydropower group that is still flaring — registered losses this week. The Commercial banks group plunged by 17.89 points to 790.62 points. The Development bank group was down by a whopping 41.51 points to 1067.31 points. Similarly, the Insurance group fell by 5.12 points to 803.36 points.
However, the sensitive index posted a minimal rise — at the closing on Thursday — of 6.82 points to 204.05 points from Sunday's 197.23 points. But the market breadth was weak with stocks that were in the red outnumbering those in the positive territory.
Major gainers this week, include Bottlers' Nepal Ltd with Rs 309.99 million, National Hydropower Company with 82.72 million, Machhapuchhre Bank with 80.69 million, Bank of Kathmandu with Rs 48.49 million and Siddhartha Bank with Rs 34.42 million transactions, according to the Nepse.
The five-day transaction at the Nepse floor, however, didnot see any transaction of government and corporate bond that is yet another lucrative investment option.

Friday, February 15, 2008

Merchant Banker regulation comes into effect

Merchant Banker Regulation-2064 has come into effect from today.
"The introduction of this new instrument will help better manage capital market," said Dr Chiranjivi Nepal, chairman of the regulatory authority of the capital market, Security Board of Nepal (Sebon).
The regulation has defined — Issue Manager, Underwriter, Share Registrar and Portfolio Manager — four entities. They all have to get licences from the board before operating. "One company can also work as all the four," said Parista N Poudyal, director at the Sebon.
Issue Manager manages issues of shares; Underwriter underwrites shares that are not sold and buys unsold shares; Share Registrar keeps all the records of shareholders and helps register shares, while Portfolio Manager helps investors to manage their portfolio. They all have to get licence separately to operate as either one of the four, or all, from the regulatory authority, the Sebon.
In case, any company wants to operate as all the four, it must have a paid up capital of Rs 70 million. However, the paid up capital for Issuer Manager is Rs 30 million, Underwriter is Rs 40 million, Share Registrar is Rs 10 million and Portfolio Manager is Rs 10 million.
Currently, there are nine institutions that are operating as Merchant banks. "Though, they call themselves merchant banks, due to lack of regulation at present, most of them are operating like finance companies," he said, adding that they also have to get new licence. "Apart from them, nine new institutions have also applied to get the merchant bank's licence," Poudyal added.
To maintain transparency, Merchant banks must disclose their annual report within the three months after the end of fiscal year. They also have to submit their half-yearly report within the 60 days of half yearly closing, to the Sebon.
The new regulation is thought to bring more competition in the market as it will encourage the pure Merchant bankers. "They can be regulated by the board," Poudyal said adding that earlier due to dual regulation of Nepal Rastra Bank and the board, there had been some problems.

"Sebon is also bringing amended IPO regulation that will discourage people to buy shares without bank account and proper identity," informed Niraj Giri, director at the Sebon. "The time of share distribution will also be shortened to two months," he informed.
However, the board is yet to bring the Mutual Fund regulation. "Due to absence of Trust Act, the regulation is stalled," Nepal said, adding that the board is working on it. Mutual Fund is the most safe
investment opportunity for the people who have small savings and cannot buy shares. "It will also help stabilise the capital market as it can work as a balancing instrument," he added.
Sebon has been more active in the recent days as it has been conducting various programmes to aware investors and market players. From Next week, the board is conducting training programme every Friday at 1.30 for the investors.
Clean Energy Development Bank Ltd (CEDBL) has entered into agreements with Financierings Maatschappij-voor Ontwikkelingslanden (FMO), the Netherlands, as a foreign joint venture partner and Triodos Renewable Energy for Development Fund (TREDF) as a development partner.
The Fund is a renewable energy fund managed by Triodos Bank, The Netherlands.
Under the agreement, FMO is investing 14 per cent in equity in CEDBL, states a press release of the CEDBL. They are also financing to clean energy projects in Nepal through CEDBL as a subordinated loan upto $5 million. They are also providing an initial amount of $5,00,000 as 'Capacity Building Fund' and 'Access to Energy Fund' for capacity building of micro-finance institutions dedicated to rural financing in Nepal.
FMO is the international development bank of the government of the Netherlands. It invests capital in companies and financial institutions in the private sector in developing countries and emerging markets in Asia, Africa, Latin America and Central and Eastern Europe to contribute to the structural and sustainable economic growth.
Speaking at the signing ceremony, minister for Water Resources Gyanendra Bahadur Karki said new possibilities of water resource development have opened up in Nepal with the joint investment with the foreign banks.
He said hydropower sector is an investment-friendly sector and expressed the hope that the power shortage would be overcome after some years with the construction of new projects.
Acting governor of Nepal Rastra Bank (NRB), Krishna Bahadur Manandhar, on the occasion said the collaboration between the Clean Energy Development Bank and key banks of the Netherlands has opened up new avenues of investments in the hydropower sector.
Chairman of the Clean Energy Development Bank, Dhananjaya Acharya and CEO Manoj Goyal expressed their confidence that partnership with FMO and Triodos would contribute to the sustainable socio-economic development.
Chief of the FMO, Arro De Vette and Gerrit Jan Bruink also addressed on the occasion. "There is vast possibilities for investments in the promotion of energy sector in Nepal," they said.

Wednesday, February 13, 2008

Commercial banks pay small investors negligible rate

Commercial banks pay small depositors negligible interest on their hard-earned savings — almost half of what they offer the institutional depositors. While small depositors are offered two to three per cent interest rates, the big institutional depositors get more than five per cent.
Interest rate disparity is due to central bank's deregulation. blame some bankers. Krishna Bahadur Manandhar, acting governor of Nepal Rastra Bank said that liquidity crunch is causing disparity not the deregulation.
"When there will be no liquidity crunch, the banks will automatically offer more interest rates to the small depositors also," he added.
Suman Neupane, chief executive officer (CEO) of Global Bank said that his bank is not discriminating between the small depositors and corporate depositors. "We offer four per cent interest for the small depositors in the normal savings, whereas the corporate depositors gets 5.5 per cent," he said.
Anil Shah, CEO of Nabil Bank also agreed that there is interest rate disparity. "But the depositors can choose as there are more banks and they offer different interest," he said, adding that the present disparity is due to need of banks and liquidity crunch.
"Its not discrimination rather need of the banks," he said.
However, the disparity in interest rates is blamed for the capital flight in recent days.
If the rising inter-bank lending rate that is hovering over eight per cent up from 3.5 per cent in mid-July is any indication, the small depositors should also get more interest rate, said one banker.
The rising interest rate would, on one hand discourage capital flight and on the other encourage savings habit.

Nepse postpones brokers' licance exam

Nepal Stock Exchange (Nepse) at the last hour, yesterday postponed the scheduled-exam for the brokers licence.
After a long controversy and brainstorming the Nepse had decided to add 27 more brokers to the current 23 brokers to make the total number to 50. "The increase in brokers' number would have helped capital market to be more disciplined," said an official at the regulatory authority of the capital market, Securities Board of Nepal (SEBON).
For a long time, due to the limited number of the brokers small investors were finding it difficult to transact in the secondary market as the brokers did not use to enjoy small number of shares.
Nepse had received 334 applications for the brokers' licence exam that was scheduled for yesterday but the secondary market issued an urgent notice yesterday morning stating that the exam has been postponed until further notice. The Constituent Assembly election is blamed for the postponement however Nepse is certain to loose its credibility due to its failure in holding exam.
Agrees one official at the Nepse. "We were forced to put off the exam," he said without elaborating.

71 firms 'A' rated
KATHMANDU: The total number of companies under the category 'A' listed at Nepal Stock Exchange (Nepse) has now been reached 71.
Nepse promoted nine companies due to their better performance and compliance with the existing rules. All the nine enterprises are development banks, insurance and finance companies, which portrays a rosy picture of the financial sector, according to a Nepse statement.
Chhimek Development Bank, Business Development Bank, Sanima Development Bank, Sahayogi Development Bank, Nepal Insurance Company, Annapurna Finance, Everest Finance, Prudential Finance and Bhajuratna Finance and Savings are the companies that are upgraded to category 'A'.
Their advancement means that they have earned a profit during the last three fiscal years, have a shareholder base of more than 1,000, a paid-up capital of over Rs 20 million and the value of their shares is not less than the book value.

Likewise, they have also had their financial statements audited within six months of the successive fiscal year, which is one of the major criteria for upgradation.
However, during the same period, four companies namely Paschimanchal Development Bank, Prudential Insurance, Fewa Finance and Union Finance were demoted from 'A' category to 'B' for failing to fulfil the requirements.
With the nine newcomers and four losing their status standing, the number of A category listed companies at Nepse stands at 71. There were 66 companies in this class during the previous fiscal year. Among the total 71 A-rated firms, 12 are commercial banks, eight are development banks, 11 deal in insurance, 38 are finance companies and two are related to manufacturing and hydropower.
Nepse further states that category 'A' companies now account for 55.75 per cent of the total paid-up capital of the listed companies. They account for 50.88 per cent of the shares and 79.41 per cent of the market capitalisation of all the listed companies.
At present, the shares of 144 companies are traded at Nepse.

Friday, February 8, 2008

Dr Koirala manager of the year

Dr Bhagawan Koirala, Director of Sahid Gangalal National Heart Centre has been awarded the Manager of the Year Award-2007, while Sangeeta Niroula, president of Swati has been conferred with Woman Manager Recognition Award-2007 by Management Association of Nepal (MAN).
Speaker Subash Nembang presented the awards at a function organised by to mark the 27th National Management Convention and annual general meeting of MAN in Kathmandu.
The meeting held during the first half of the day was followed by a brainstorming session on management development scenario in Nepal. Some of the leading management experts, corporate heads and entrepreneurs as well as officials of the World Bank attended the programme.

Thursday, February 7, 2008

Workshop @Pune

Interactive Workshop for Media Persons from Nepal was organised by Collage of Agricultural Banking, Reserve Bank of India, in Pune from February 5 to February 8.

Tuesday, February 5, 2008

Nepal Telecomm brings ambitious expansion plan

The state-owned telecom giant -Nepal Telecom (NT) today unveiled an ambitious plan -'Mission 2010' for increasing its customer base from the current two million to seven million in the next three years.
According to Mission 2010, NT plans to connect all 75 districts by wireless telephones based on Code Division Multiplexing Access (CDMA) technology and Global System for Mobile Communication (GSM) cellular mobile phones by 2010.
The telecom company has already started installation of additional 3.5 million mobiles phones and will increase CDMA lines to two million, said managing director Sugat Ratna Kansakar. NT will also execute the expansion of PSTN lines and besides value addition to the existing services. "Assessing the huge demand of CDMA phones and pre-paid mobile phones, we foresee the need for such a huge expansion plan," Kansakar added.
Majority of the new GSM lines will be pre-paid mobile phones, which happen to be very popular among the users, said the MD. The additional CDMA lines will be mostly distributed in hilly regions to better serve the rural populace.
"The main objective of the plan is to build a strong Nepal Telecom capable to serve and satisfy the growing expectations of the customers through a balance of quantitative expansion, qualitative enhancement and price comfort," he said.
Thanks to the aggressive expansion plan, Nepal's target of having 15 telephone connections per 100 people by 2014 is to be met seven years in advance. And, that too with more than 20 connections per 100 people. While the government's long-term plan for telecom and information technology unveiled in 2002 claimed there would be 15 telephone connections per 100 people by 2014, NT's Mission 2010 plans for having 20 lines per 100 people within the next three years.
Unveiling the new plan on the occasion of the fourth anniversary of NT, Kansakar said that Nepal Telecom succeeded to increase the total tele-density to 8 per cent from a a mere 2 per cent four years ago. Today, 71 districts out of 75 have connection to CDMA phones and coverage of GSM mobile phones has reached 57 districts, he said.
NT has also announced a new plan to have at least two telephone lines with Internet connection to 100 remotest village development committees (VDCs) within the next five months.
When grilled on the poor quality of NT's GSM mobile phones, Kansakar promised the service would improve by May this year as upgrading and new installation activities were underway. "There will be a visible difference within the next four months," he said.
He further said that NT would soon come up with a plan to provide on-demand connections for GSM pre-paid mobile phones and CDMA Sky phones. "We plan to start on-demand supply of new connections for Kathmandu valley within next two months," he informed.
According available statistics, NT has so far distributed 2,050,728 telephone connections as of mid-July 2007, including 520,000 PSTN lines, 1,219,000 GSM mobile phone subscribers and 311,000 CDMA phone users.