Monday, March 31, 2008

Rs 6.18b budget deficit: NRB report

Due to relatively higher growth of government expenditure in the current year, the budget has also posted Rs 6.18 billion deficit in the first seven months. In the same period last year, the budget was at the surplus of Rs 1.82 billion, according to the current macroeconomic situation based on the first seven months of this fiscal year.
However, the revenue mobilisation has increased by 29 per cent to Rs 54.52 billion compared to an increase of 17.9 per cent in the corresponding period last year. The NRB report also states that domestic credit has increased by 12.6 per cent in comparison to a growth of 2.3 per cent last year. A significant rise in domestic credit was on account of a pick up in bank credit to the private sector.
The NRB has injected a net liquidity of Rs 42.16 billion by net purchase of $660.6 million from commercial banks through foreign exchange intervention in the review period. A net liquidity of Rs 37.17 billion had been injected through the net purchase of $510.8 million in the same period last year.
Total exports declined by three per cent that is equal to the decline in the corresponding period last year. "Of the total exports, export to India fell by 5.5 per cent in comparison to a decline of 4.6 per cent in the same period last year," according to the central bank. Exports to other countries, on the other hand, posted a growth of 2.5 per cent in comparison to an increase of 0.7 per cent in the comparable period last year.
However, total imports rose by 11.9 per cent compared to a rise of just 1.6 per cent in the corresponding period last year, states the NRB report. The year-on-year inflation moderated to 6.4 per cent in mid-February 2008 from eight per cent in the same period last year."
Likewise, the appreciation of Nepali currency against the US dollar also dampened the inflationary pressure," it states. Indian currency equivalent to Rs 50.23 billion was purchased through the sale of $790 million in the review period. During the same period last year, a total of Rs 30.49 billion.

Promoters' share trading at Nepse starts

Nepal Stock Exchange (Nepse) started separate trading of promoters' shares through secondary market from today. Alpic Everest Finance Ltd and Machhapuchhre Bank became the first two listed companies today to trade as Alpic Everest traded its 1,28,000 units shares for Rs 12.58 million and Machhapuchhre Bank traded 2,51,410 units of its shares for Rs 125.7 million.
"With this new practice, the capital market will be dynamic and price of the ordinary shares will also be stabilised as the supply of shares will increase," Rewat Bahadur Karki, general manager and CEO of Nepse said, adding that the capital market has been on fire due to less supply of the shares. "The trading of promoters' shares helps expand the market," he added. "It will also help check manipulation."
However, the promoters cannot fix the price of shares arbitrarily. "For the first trading at the floor, the lower limit is fixed," Karki informed. "In case of a company that has positive networth, the price cannot be less than five times of the networth or the current market price, whichever is low." This pricing system is expected to be beneficial for the traders.
A promoter cannot sell shares worth more than two per cent — of the paid up capital — at a time.

Sugat Ratna Kansakar reappointment

Sugat Ratna Kansakar has been reappointed for the post of managing director of Nepal Teleco-mm (NT), for the third time. He has been appointed informally for two years. "NT is also going through its internal restructuring," Kansakar said, adding that after the CA poll it will come into effect. "Due to code of conduct, we cannot do anything now."The NT has been aggressively expanding its network, though the service is poor in the recent days. NT's GSM mobile phone has 1.5 million customers.

Sunday, March 30, 2008

Highlight economic agendas, entrepreneurs

For centuries, political parties in Nepal have fought for their 'political agenda' but its high time now that they fight for 'economic' agenda. All the political parties including Nepali Congress (NC), Communist Party of Nepal-United Marxists Leninist (CPN-UML) and Nepal Communist Party (Maoist) in their Constituent Assembly (CA) election manifestos have promised economic growth, and equitable and inclusive development.
Though late, they have come up with economic agenda, observes private sector. The parties manifestos have given a substantial space to the economic agenda but a million dollar question is will that be implemented. Thus, private sector — the backbone of economy — has shown interest in the engagement with parties in ensuring the implementation of economic agenda.
Governments are, around the world, limiting their roles and private sectors are evolving as a major investors in development. Post-1990, Nepal also witnessed this phenomenon.
Around two dozen entrepreneurs from Binod Kumar Chaudhary to Diwakar Golchha, Tek Chandra Pokharel, Niranjan Tibrewala, Laxmi Das Manandhar, Anand Ram Mulmi to Kabindra Nath Thakur are enlisted by the various parties in their PR list to take advantage from the private sector's expertise and professionalism. The engagement will definately be beneficial for both - the political parties and private sector. Its the marriage of convenience.
"Last year, when we had to go to the streets demanding law and order and safety of our business, we, for the first time, thought of being involved in the politics," says Binod Kumar Chaudhary, president of Confederation of Nepalese Industries (CNI), who is enlisted in CPM-UML' proportional representatives (PR) list.
Diwakar Golchha, president of Golchha Organisation, who is enlisted in Nepal Congress's PR list, agrees.
"Since the last two decades, the business fraternity has been a silent spectator of national politics but the time has called for our active participation," he says, adding that their involvement is not for politics but for economic growth of the country. "Until there is economic growth, we can never develop," he adds.
"Private sector, the driver of economic growth of the country, has been neglected for long," says Chaudhary, adding that industrialists and their rights — like any others — can be protected by actively involving in the politics rather than being passive and criticising the politicians.
Today power, water, petroleum products, airlines, from anything to everything, whole supply system has collapsed, he says. "Its not the time to sit back and criticise rather be involved and engaged with the political parties to put the country back on track."
Entrepreneurs have been time and again urging the political parties to project economic agenda parallel to the political agenda. "But the parties were so involved in themselves, they never tried to listen to us and incorporate the economic agenda," Golchha says, adding that economic agenda didnot get any priority.
Social and economic security should be guaranteed in the new constitution, according to Chaudhary. Similarly, Golchha says that the new constitution should basically guarantee the economic model, define roles and responsibilities of private sector and government.
Politics alone cannot drive the country towards development. "Any kind of state-structure needs a sound economy for its development," says Niranjan Tibrewal, another businessmen enlisted in CPN-UML's PR list.
"In the development-oriented countries like ours, political decisions should be directed by economic consideration not the other way round," Chaudhary adds.
Going by the election menifesto, political parties also have focused on equitable, justifiable and liberal socio-economic agenda in their menifesto. However, the economic agenda of the two major political parites — Nepali Congress (NC) and CPN-UML — have not much difference. Even, Maoists have almost economic agenda, though they claim political revolution is necessary before economic revolution.
But Chaudhary sees it otherwise. "Political parties' economic agenda are guided by national and international trend," he says. Golchha, however, differs. "From top, it looks similar, but reading between the lines, there are differences," Golchha says.
Meanwhile, the business fraternity is least bothered with the ideology of the parties they are representing. "We have purely economic agenda," Chaudhary says, adding that "the parties don't need us to carry their flags. For that they have their own cadres."
"If they are prepared to own our agenda and give us platform, we should volunteer and participate in the nation building process," he thinks.
"How to take politics and business concurrently is a major challenge in Nepal. Indulging the people with proven track-record of management can be helpful," Chaudhary says, adding that the parties should have clear concept of management in politics.
"We have opportunities but could not exploit," Tibrewal, says. Its also the moral obligation of professionals to help politicians exploit opportunities for the benefit of country.

Manifesto Match

Nepal Congress
· Open market and liberal economic policies
· More investment for eight to 10 per cent growth within next five years
· 5,000 MW electricity generation in five years
· Connecting all 75 district headquarters by road within five years.

Nepal Communist Party (Maoist)
· New transitional economic policy emphasing revolutionary land reform, concessions to FDI, promotion of PPP system and promotion of cooperative movement
· Developing socialism-oriented national industrial capitalism
· Has 10-year, 20-year and 40-year plan of action
· 10,000 MW electricity generation plan within ten years

Communist Party of Nepal (UML)
· Socialism-oriented, welfare-based political-economic direction
· Modernising and commercialing of agriculture sector
· Public, cooperative and private sectors will be developed
· A mixed system of economic policy

NCC observes 55th annual general meeting

Industrial security force is a must for secure business-environment, Surendra Bir Malakar, president of Nepal Chamber of Commerce (NCC) while welcoming the guests during the 55th annual general meeting (AGM) of NCC said here today.
"Private sector is able to contribute to the nation building process, provided the government take care of the entrepreneurs," he added. "For sustainable development, Nepal should exploit the sectors that it has comparative and competitive advantages.
Subash Chandra Nembang, the Speaker of Interim Legislature Parliament has inaugurating the AGM. "The private sector has an important role to play for the successful Constituent Assembly election," he said, praising the unity of private sector.Rameshwor Khanal, finance secretary (revenue) said that the investment condition has improved in the recent days. "The government is planning to modernise customs that would help make positive impact on export," he said, adding that the government is also doing its homework for a suitable labour law.
Similarly, the newly elected president of FNCCI, Kush Kumar Joshi requested the private sector to be united so that the government would be forced to listen them.On the occasion, the Speaker awarded 'Nepal Chamber Excellence Award' to Nepal China Chamber of Commerce. He also awarded Letter of Appreciation to different entrepreneurs for their contribution.
Nembang also awarded Lokmanya Golchha, the second vice-president of NCC and Dwarika Nath Pradhananga for their service to the chamber for 20 years, and Rastra Bhusan Chakubaji and Shivabhagawan Agrawal for their service to chambers for 10 years.
The Prime Minister has also sent a message for a successful AGM of NCC.

Letter of Appreciation

*Cargo — Atlas De cargo, Everest De cargo, Himalayan Travels and Tours Pvt Ltd, Speed Way cargo and Himali International cargo Pvt Ltd
*Carpet exporters — Samling Carpet, Himalayan Arts Carpet and Shangrila Carpet
*Readymade garments — Destination Apparels, Heritage Fashion and Nepal Fashion
*Pashmina —Everest Pashmina Knitting and Weaving Industry
*Handicraft — Dawa Handicraft Pvt Ltd
*Courier — DHL express (Nepal) Pvt Ltd
*Export to India — Kiran Shoes Manufactures

KLT exams end on positive note

The second and last day of Korean Language Test (KLT), one of the key processes of getting job in South Korea under employment permit system (EPS), completed here peacefully on March 30.
"The exam was peaceful," said Keshar Bahadur Baniya, director general at the department of labour and employment promotion.
Out of around 31,000 aspirant jobseekers applied for the KLT, 18,000 appeared in the exam yesterday and the rest appeared today. The exam centres were fixed in the 18 centres in Kathmandu valley only.
It was jointly arranged by EPS section of DoLEP and the Human Resource Department of Korea but conducted by the Tribhuvan University (TU). The applicants appeared for the written as well as listening and reading test for EPS-KLT.
South Korea has emerged as the most preferred destination for Nepali jobseekers because of better earnings and cheaper initial cost to get job under EPS. Nepal and South Korea had signed a memorandum of understanding in July last year. The agreement has set proficiency of the Korean language as a major condition of eligibility for employment in South Korea.

Out of a total 31,900 aspirant jobseekers, who have applied for the Korean Language Test (KLT) — a first step in the process of getting jobs in South Korea under employment permit system (EPS) — 18,000 appeared in the exam in 18 different exam centre in the valley on March 29.
"18,000 job-aspirant appeared in the exam today, while 13,000 will appear tomorrow," said Keshar Bahadur Baniya, director general (DG) at the department of labour and employment promotion (DoLEP).
The exam is jointly arranged by EPS section of DoLEP and the Human Resource Department of Korea but conducted by the Tribhuvan University (TU). The applicants appeared for the written as well as listening and reading test for EPS-KLT.
EPS unit had set up office at the Dhasharath Stadium, Tripureswar to receive forms. The 31,900 candidates had filled up the forms for the test during the five-day long registration from March 15-19. The Korean HRD officials will take the answer sheets — after the exams tomorrow — back to Korea for final marking and the results will be announced later through public media.
Each candidate had deposited Nepali rupees equivalent to $17 (approximately Rs 1,100) for the test.
Under the exam, listening test and reading test carry 100 marks with each test to be concluded in 40 minutes and 50 minutes respectively.
South Korea has emerged as the most preferred destination for Nepali jobseekers because of better earnings and cheaper initial cost to get job under EPS. "It will cost only Rs 65,000," Baniya informed.
Nepal and South Korea had signed a memorandum of understanding (MoU) in July last year. The agreement has set proficiency of the Korean language as a major condition of eligibility for employment in South Korea.

Saturday, March 29, 2008

Macau is the richest

Surging gambling revenue and investments in luxury hotels and the entertainment industry has made the former Portuguese enclave of Macau Asia's richest territory, a media report stated today.
Macau has overtaken other locations such as Singapore, Brunei and Japan to take the top spot after gross domestic product (GDP) per capita surged by 27 per cent to $36,357 last year, according to Macau government figures.
The results from the statistics and census service show that in US dollar terms, Macau, with a population of 531,000, is the world's 20th richest economy, the South China Morning Post reported.
This puts the territory, which like Hong Kong is a special administrative region of China, ahead of Italy and just behind Germany and France.
The rise in per-capita GDP was buoyed by a 47 per cent increase to $10.34 billion in gambling revenue last year. Investment bank Morgan Stanley has forecast gaming revenue will grow by 23 per cent this year and rise by about 20 per cent per year in 2009 and 2010.
But while the improved growth figures may be good news for the territory's wealthy few, it comes with a down side. The average Macau resident saw median monthly employment earnings rise by only 7.5 per cent last year to about $1,020.
By comparison, inflation climbed by an annualised 9.5 per cent in February, a 12-year high. Rent and medical expenses are rising at a faster rate, by 15.6 per cent for rent and 24.2 per cent for basic medical consultations.

Thursday, March 27, 2008

Kush Kumar Joshi elected 14th FNCCI president

Kush Kumar Joshi is elected 14th president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) by 120 votes as he got 1,468 votes in a neck-to-neck competition against Chandi Raj Dhakal, who got 1,348 votes.
Similarly, Krishna Prasad Tamrakar (from Districts chambers with 95 votes), Bhaskar Rajrajkarnikar (from Commodity Association with 22 votes) and Pradip Jung Pandey (from Associate members with 158 votes) were elected vice-presidents. Suraj Vaidya is elected unanimously from bi-national chambers as vice-president.
The 42nd annual general meeting of the umbrella organisation of private sector has also elected its new executive committee. Newly elected president Joshi — who was the second vice-president — after being declared the president, vowed to work unitedly towards strengthening of the FNCCI. “Security will be on top of our agenda for the time being,” he said, adding that without a business-friendly environment, industries cannot operate. He also urged the journalists to give economic news a high priority in the changed global context.
Bhawani Rana, from Nepalgunj Chambers of Commerce was elected with the highest 161 votes as an executive member from districts/municipality chambers. Similarly, Shaurav Jyoti was elected with the highest 232 votes as an executive member from associate category.
A total of 128 candidates had filed their nominations for the election of the executive committee of the apex body of the private sector. The executive committee has the representatives from district chambers, bi-national chambers, associate members and commodity associations.
The associate members have 376 votes, commodity associations have 64 votes and district chambers have 90 votes, bi-national chambers have 10 votes making it a total of 620 votes, whereas in terms of weightage the district chambers have 50 per cent, commodity associations have 20 per cent and associate members have 30 per cent.
Immediate past president Chandi Raj Dhakal congratulated all the winners and wished for their successful term in the FNCCI.
The newly elected president Joshi’s agenda was image-building as well as capacity building of private sector to compete in the current globalised economic system. He is for remodelling of public-private partnership (PPP) model for socio-economic development. Joshi — who holds an Electrical Engineering diploma from Society of Engineering, UK — is leading the 19th executive committee.

Come up with a package to boost exports: Dr Mahat
Finance Minister Dr Ram Sharan Mahat — inaugurating the 42nd annual general meeting (AGM) of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) — yesterday at the BICC urged the private sector to come up with package programme to boost exports and urged labour unions to stop labour unrest for industrial revival.
He sought a concrete plan from the private sector for export promotion. "Private sector should come up with a concrete plan and package to boost exports," he said adding that except exports all other macro-economic indicators are good.
"We have comparative advantages and opportunities, though they could not be fully exploited in the transition phase," he said. "However, the successful Constituent Assembly (CA) election can guarantee investment-friendly environment making it possible for the optimum exploitation of opportunities."
"Peace should be our priority. If there is no peace, the capital will naturally fly as capital knows no borders," he said urging to stop the culture of bandh and end labour unrest for the industrial revival. "With the involvement of International Labour Organisation (ILO), the government will organise a tri-patriate dialogue between the labour unions, private sector and the government after the CA poll," Mahat said, adding that industrial revival can not only benefit the industrialists but will also generate employment and contribute to the national coffer.
"Private sector contributes about 72 per cent of the total revenue," said Chandi Raj Dhakal, incumbent president of the umbrella organisation of Nepali private sector, welcoming the participants. He said the government should create an environment where the natural resources at the remotest areas can also be exploited. "Private sector is committed to the national building as without its participation a country cannot develop," he added.
Diwakar Golchha, first vice-president of the FNCCI said that the government should promote Public-Private-Partnership model. The finance minister honoured five industrialists — Late Mohan Gopal Khetan, Late Hulash Chandra Golchha, Late Gopal Rajbhandari and Late Raj Bahadur Chipalu — posthumously.
Though Prime Minister was scheduled to inaugurate the AGM, he could not make it due to his health.

Wednesday, March 26, 2008

Nooyi highest paid executive in PepsiCo

New York: Indra Nooyi, the India-born chief executive of PepsiCo, received $14.74 million in compensation in 2007, her first full year as head of the world's second-largest soft drink maker. Her 2007 compensation value more than doubled the $6.3 million she was paid in 2006, when she served as Pepsi's chief financial officer for most of that year before taking over the top spot in October 2006. According to the company's annual regulatory filing, Nooyi's package makes her the highest paid executive in the company.
Her package includes $1.3 million in salary, $3.2 million of non-equity incentive plan compensation, and nearly $400,000 in compensations such as executive perks including flying on the company jet. She was also granted stock and option awards worth $9.83 million as of the grant date in February 2007.
In Nooyi's first full year in charge, the company's stock price jumped by 21 per cent. The Fortune magazine recently published a cover story on her, in which she said she was not averse to a position in Washington later. PepsiCo International CEO Mike White is the company's second-highest paid executive with a compensation package worth $7.1 million in 2007. White was Nooyi's rival for the CEO job.
By contrast, Pepsi's rival Coca-Cola gave its chief executive, Neville Isdell, $21.65 million in compensation in 2007, a 3.6 per cent increase from the previous year.

Tuesday, March 25, 2008

WAN goes full-fledge

Starting form the Nepali New Year, all 23 brokers will trade from their offices through Wide Area Network (WAN), an extended facility that Nepal Stock Exchange (Nepse) provide them. They don't need to go to the Nepse floor everyday for trading as the Nepse is making it mandatory for all the brokers to trade through WAN.
Nepse has provided the extended facility of WAN from this fiscal year after the stock market automation. At present 20, out of the total 23 brokers trade through WAN from their offices.
Nepse has written a letter on Sunday to the remaining three brokers to go for WAN from the begining of Nepali New Year.
The Nepali New year falls on April 13 this year. However, April 13 and 14 are the holidays and the brokers will trade through WAN from April 15.
"We wrote letters on Sunday to the remaining three brokers go for WAN," Rewat Bahadur Karki, general manager and chief executive office of the Nepse, said, adding that the secondary market wrote a letter to the remaining three brokers — Broker no 7, 13 and 26 — to start trading through WAN.
Nepse will also add 27 more brokers — to make it a total of 50 from existing 23 — after the Constituent Assembly (CA) elections.
With the increasing of the listed companies and shares the existing brokers are not enough, claims Suman Parajuli, an investor. "Nepse must add more brokers so that it will be easier for the investors to trade," he said, adding that at present out of 23 around 10 brokers are active.
The new companies — three big commercial banks — are floating Initial Public Offerings (IPOs), the existing companies are issuing rights and bonus shares pushing the volume and transaction up. "Similarly, NT recently has its mega-issue," he said. "Thus, the number of brokers should also be increased. The best practice would be open-entry and open-exit."
The Security Board of Nepal (Sebon) has registered capital mobilisation of Rs 4.05 billion by 20 different companies in the first six months of the current fiscal year.
"Eight of these companies have issued ordinary shares worth Rs 1.77 billion and the remaining 12 companies have issued rights shares worth Rs 2.28 billion," according to the Securities Board of Nepal (Sebon).

Monday, March 24, 2008

Gold starts cooling Down

The price of gold has plummeted almost by Rs 3,000 in a week after hitting the historic high last week.
The precious yellow metal today eased back to Rs 19,505 per 10 gram ( Rs 22,225 per tola) from last Monday's record high of Rs 21,435 per 10 gram (Rs 25,001 per tola) in the domestic market.
"It fell by Rs 2,875 per tola (11.664 gram) in comparison to last Monday," a gold trader said, adding that the price after hitting the roof has come down.
The domestic market has felt the heat of deepening woes in the global financial system. "However, the domestic market has been forced to control the gold price as the selling pressure increased making the traders nervous," said another gold trader.
Continuous weakening of dollar, rising crude price and economic slowdown in the US, have pushed the price of precious yellow metal up.
Apart from that end of wedding season and nearing Constituent Assembly election have also hurt the domestic gold traders.
Similarly, silver price has also come down to Rs 380 per 10 gram from Rs 400.
While international markets tumbled day-after-day in the first three months of 2008, gold climbed to an historical high of $1,032 an ounce and shows signs of reaching greater heights in the near term.
"When all else looks risky, gold flourishes," experts claim adding that in a credit crunch, cash is deemed to be king. In which case, gold owned outright has just been crowned emperor.
Used as money for more than 3,500 years, gold thrives on crisis and investors' fears. Two of the biggest drivers — a rapidly depreciating dollar and growing US inflation — have helped catapult the price of gold more than 60 per cent over the past two years.

Sunday, March 23, 2008

Nepse starts cooling

Nepali capital market — that touched a historic high of 1064 points on December 16 — has started correcting itself in the recent months. Within three months, Nepse plummeted by more than 300 points to 710.8 points.
Nepse started this week, today, in a negative note with 5.92 points or 0.83 per cent loss to 710.8 points from the last week's closing of 716.72 points.
Flow of more shares like NT's mega-issue, Nepal Agriculture Development Bank's shares and completion of annual general meetings (AGMs) of all financial institutions — that dominate the Nepse — are some of the reasons of the slowdown in the capital market, according to Nepal Stock Exchange (Nepse).
"Our capital market is financial sector driven that is not the real barometer of economy," says Rewat Bahadur Karki, general manager and chief executive officer of the Nepse. "If it were real sector driven," he says, adding that it could be the real mirror of our economy.
Agrees Rabindra Bhattarai, share market analyst, "All the financial institutions have — after AGM — declared their rights and bonus shares increasing the flow of shares in the market pulling the share price down."
Bhattarai even predicts that Nepse may fall as low as 600 points. "Its in downward trend and may dip to 600 points," he says, adding that apart form seasonal impact, the capital market is slowing down due to Nepal Rastra Bank's — the regulatory authority — new directives also.
"People are selling shares to pay financial institutions' loans they have taken against shares, according to new NRB directives," he says. Similarly, new capital fund — in form of loan to buy shares — has also blocked due to NRB's new directives on margin lending.
Investors' are also in a mood to wait and watch due to nearing Constituent Assembly election.
In the fiscal year 2062-63, Nepse saw a trading of Rs 3.45 billion, whereas, it reached Rs 8.36 billion in the fiscal year 2063-64. "In the first eight months of current fiscal year 2064-65, the trading has already touched Rs 13.8 billion," according to the Nepse. "The trading increased by 175 per cent in comparison to the same period of the last fiscal year."

The market capitalisation has also touched Rs 334 billion on December 16 this year from last year's Rs 232 billion in the same period.
Though, the Nepse witnessed trading of 55 listed companies today, all the major key market players — Commercial banks (7.66 points), Hydropower (12.88 points), Development banks (3.16 points) and finance group (2.17 points) — plunged except Insurance group that flared by 8.22 points.

Saturday, March 22, 2008

Nepse prepares promoters' share trading

Nepal Stock exchange (Nepse) — the sole secondary market — is preparing for the trading of promoters' shares soon.
Nepali capital market has been on fire since couple of months due to less supply of the shares for trading at the Nepse floor. "The trading of promoters' shares will help expand the market," Rewat Bahadur Karki, general manager and chief executive officer of the Nepse, said, adding that the market will also be dynamic.
However, the promoters cannot fix the price arbitrarily. "For the first trading at the floor, the lower limit of such share price is fixed," he informed. "It cannot be less than five times of the company's networth or the current market price, whichever is low."
Recently, Nepal Rastra Bank, the regulatory authority of the financial market has brought the rule that promoters can sell 19 per cent of their 70 per cent stake through the secondary market.
Similarly, Nepse is also planning to start Over the Counter (OTC) market also. "For the delisted companies and those companies that could not list themselves at Nepse, its a better option," he said. The share holders of the delisted companies will benefit from the starting of OTC market.
Nepse has started trading through automation from the starting of this fiscal year. "At present, Nepse is also providing Real Time Information to the investors," he said, adding that the trading hour has also been increased to three hours from two hours.
"Stock brokers need not come to the Nepse floor for trading now as Nepse has provided them Wide-Area Network (WAN), an extended facility in its bid to modernise the capital; market," Karki added. However, Nepse's attempt to add more brokers has been halted at the last stage last month. "We will add the numbers of stock brokers as soon as the Constituent Assembly election will be over," he promised.
Launching 'Nepse newsletter,' an English language that will be published in two months and provides information on the activities of Nepse in its bid to make investors more aware of the secondary market today Karki said that Nepse is also bringing 'Trading Statistics and Market Review' monthly from Baishakh.

Friday, March 21, 2008

India is top remittance receiver

India is the top receiver of remittances from abroad in 2007, followed by China and Mexico, according to the World Bank's Migration and Remittances Fact book 2008.
The top five recipients of migrant remittances in 2007 were India ($27 billion), China ($25.7 billion), Mexico ($25 billion), the Philippines ($17 billion) and France ($12.5 billion), according to the fact book.
For 2007, recorded remittances flows worldwide were estimated at $318 billion, of which $240 billion went to developing countries. These flows do not include informal channels, which would significantly enlarge the volume of remittances, if they were recorded.
"In many developing countries, remittances provide a life line for the poor," said Dilip Ratha, a senior economist, and author of the fact book with Zhimei Xu. "They are often an essential source of foreign exchange and a stabilising force for the economy in turbulent times."

Thursday, March 20, 2008

WB reacts to NRB governor's case

The World Bank (WB) today releasing a press note said that media reports — on the court verdict against Nepal Rastra Bank (NRB) governor Bijay Nath Bhattarai and executive director Surendra Man Pradhan — including the World Bank has drawn its attention.
"The World Bank has been supporting Nepal's financial sector since 2003, most recently through the Financial Sector Restructuring Programme, which is designed to support Nepal's efforts at developing a healthier financial sector for private sector development, investment and faster growth," stated a press release. "Under this project the World Bank gave its no objection to a contract between NRB and a consulting firm to help improve supervisory capacity at the NRB."
The media has reported that prior approval was not sought from the World Bank for the release of payment to the consulting firm. "The Bank procedures do not require prior clearance by us for payments made against contract conditions agreed between the implementing agency – in this case Nepal Rastra Bank – and the firm it hired for consulting services," stated the release.
Execution of contracts is the responsibility of the contracting party and payments are governed by the terms and conditions of the contract. The World Bank reimbursed this contract payment of $51,538.32 on November 8, 2006 to NRB. "It made this payment from a grant window. Its technical experts found that the work done by the consulting firm was satisfactorily carried out against the terms of their contract," the Bank claimed.
The World Bank then gave its no objection to NRB's proposal to terminate the contact when the consulting firm repeatedly failed to replace its team members as provided in the contract. It claimed that it is also conducting its own inquiries into the matter. "The World Bank is expected that a draft report will be shared with Nepal government by May 2008," the release stated.

Monday, March 17, 2008

Gold hits record

Gold jumped to a record high Rs 21,435 per 10 gram today — Rs 25,001 per tola (11.664 gram) — in the domestic market, a rise by Rs 600 per 10 gram in a day from yesterday's Rs 20,835.
"The price difference of Rs 600 per 10 gram (Rs 700 per tola) is also a record price hike in one day," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association (NEGOSIDA).
The domestic market has been forced to bear the burnt of deepening woes in the global financial system that have triggered rampant safe-haven buying of gold and silver with gold testing above $1,030 per ounce in the international market today.
"Continuous weakening of dollar, rising crude price that hit $112 per barrel and economic slowdown in the US, have pushed the price of precious yellow metal up," Shakya added.
Even though Gold is in the midst of a mega bull run, the demand has been continuously rising in the largest gold consuming countries like India and China fuelling the price hike. If China realises its claim that it will buy 2,500 tonnes of gold, the gold prices might even go sky high, gold traders claimed.
"End of the wedding season for this Nepali year and the Constituent Assembly election by the end of this month may hurt the domestic gold market even more," he said, adding that though the price of precious yellow metal might come down as it has reached its peak.
In the international market also, gold prices reached its highest in 25 years, hitting $1,032.70 today as investors sought a safehaven against a backdrop of tumbling world stock markets, a falling dollar and record oil prices.
After hitting the high in early trade, gold eased back to $1,024.49 per ounce on the London Bullion Market.

Friday, March 14, 2008

Gold hits roof

Gold price touched historic high of Rs 20,835 per 10 gram — over Rs 24,300 per tola (11.664 gram) — in the domestic market today, the closing day of the week.
If the current bullish trend continues, soon the price will cross Rs 25,000 per tola in the domestic market, according to the gold traders.
Due to the huge price rise in crude prices that touched the historic high of $110 per barrel yesterday, slow down of US economy, weak global stock market and further weakening of dollar has been pushing the price of gold up in the last months. The price of oil is up by 256 per cent in the past five years.
The precious yellow metal in the local bullion market opened at Rs 20,465 per 10 gram on Sunday and surged by Rs 370 to close at Rs 20,835 on Friday.
In the international market also, Gold has hit a new milestone yesterday, rising to $1,000 an ounce for the first time. The price of gold has jumped nearly 20 per cent since the start of the year after rising nearly 32 per cent in 2007.
Lower interest rates — and the prospect of more rate cuts by Fed — bringing the dollar's value down makes dollar-based commodities like gold cheaper for foreign buyers. The weak currency has also made gold more attractive because the metal is a hedge against inflation, according to experts.

Inflation declines

The year on year inflation has declined to 5.8 per cent in mid-January 2008 from 7.6 per cent of the corresponding period of the last fiscal year.
The moderation in consumer price index was on account of lower pass-through effect of the hike in the prices of petroleum products in October 2007. "The appreciation of Nepali currency against the US dollar also helped contain the inflation rate at a moderate level," states the macro economic situation of the first six months of this fiscal year published by Nepal Rastra Bank.
"The price in Kathmandu Valley, Tarai and the Hills rose by 5.3 per cent, six per cent and 5.6 per cent respectively."
In the first six months of 2007-08, the government expenditure on a cash basis, increased by 30.2 per cent to Rs 58.28 billion compared to an increment of 11.9 per cent in the same period of
the previous year. The increase in government expenditure was on account of rise in all forms of government expenditures that recurrent, capital and principal repayments.
In the review period, the recurrent expenditure rose by 21.8 per cent to Rs 38.24 billion compared to an increase of 10 per cent in the corresponding period of the previous year. "The higher growth of recurrent expenditure was on account of increased expenditure on relief-related activities, the salary hike of government employees, rise in peace-related expenditure and additional expenditure relating to the preparation of constituent assembly elections," according to the central bank.
For modulating short-term liquidity, the NRB undertook reverse repo auction of Rs 5.57 billion and outright sale auction of Rs 1.24 billion. Both of the instruments were used to absorb liquidity.
In the first six months, the revenue mobilisation also rose by 25.4 per cent to Rs 47.39 billion compared to an increase of 19.7 per cent in the corresponding period of the previous year.

However, in the first six months of 2007-08, total exports fell by 5.8 per cent in comparison to a decline of 2.7 per cent in the corresponding period of the previous year. Of the total exports, export to India fell by 7.6 per cent in 2007-08 compared to a decline of three per cent in the same period of 2006-07. Exports to other countries also registered a decline by 1.7 per cent in comparison to a decline of 1.9 per cent in the comparable period of the previous year.
similarly, total imports rose by 6.2 per cent compared to a rise of 7.7 per cent in the corresponding period of the previous year. While imports from India went up by 6.5 per cent in the review period compared to its higher growth of 10.1 per cent in the corresponding period of 2006-07, imports from other countries rose by 5.7 per cent in the review period in comparison to a lower growth of four per cent in the previous year.
The overall BoP recorded a deficit of Rs 1.93 billion. It had posted a surplus of Rs 5.49 billion in the corresponding period of the previous year. Despite the increase in travel receipts and workers' remittance by 65.3 per cent and 18.2 per cent respectively in the review period, the current account registered a deficit of Rs 1.21
billion due to the increase in trade deficit and the decline in grants.
The gross foreign exchange reserves aggregated Rs 164.95 billion in mid-January 2008, declining by 0.1 per cent from the level of Rs 165.11 billion in mid-July 2007. Such reserves had gone up by 2.5 per cent in the corresponding period of the preceding year

Thursday, March 13, 2008

IMF suggests banks to hike rates

The visiting International Monetary Fund (IMF) team proposed banks to raise interest rates.
Though they found the overall macro economic situation of Nepal satisfactory, they were worried over the huge losses that Nepal Oil Corporation (NOC) is incurring.
"Except for the health of NOC, a huge loss making government entity and rising debt, overall macro-economic indicators are satisfactory," said Brian J Aitken, deputy division chief at Asia and Pacific Department.
The team also held discussions with government officials, private sector and commercial banks on their priority and challenges. "We agreed on almost all the issues with the government," he said, adding that overall economic situation is satisfactory for the present situation.
The team was in Nepal for last two weeks for the broad-based economic assessment of Nepal’s economy.
Though they termed stable inflation a positive sign, they think it may not be possible to keep stable for long for the government. "We are also concerned over the Nepal Rastra Bank’s (NRB)effective monitoring and supervision capacity," he said, referring to the long time period that governor’s case is taking. "The delay in decision will hurt the effective implementation of monetary policy and monitoring and supervision activities," Aitken added. "The longer it takes to decide, the more damaging it will be for the central bank."
IMF does the broad-based surveillance of each country. The team will submit a report to IMF headquarters that will be published by the end of May.

Wednesday, March 12, 2008

London most expensive city

London is the dirtiest and most expensive city in Europe, while Brussels is the most boring, according to a British survey published today.London edged out Paris for the unwanted accolade of dirtiest city in the survey of more than 1,100 travellers carried out by TripAdvisor.Respondents said Paris was the most unfriendly, followed by London and Moscow, but the French capital is still working its old magic as it was voted the most romantic destination in Europe and the best for shopping and dining.London won out for having the best nightlife and public parks.The cleanest city is Zurich, the survey said, although the tidy Swiss city also finished equal second behind EU hub Brussels as the most boring place.Prague was elected the best bargain city, followed by Budapest and Lisbon. Despite the weak dollar, half of the Americans surveyed said they planned to visit Europe this year, the same number as last year.

Top three in various categories
Best bargain city: 1. Prague 2. Budapest 3. Lisbon.
Most expensive: 1. London 2. Paris 3. Rome, Venice, Oslo, Moscow (tied)
Most friendly locals: 1. Dublin 2. Amsterdam 3. London.
Most unfriendly locals: 1. Paris 2. London 3. Moscow.
Best cuisine: 1. Paris 2. Rome 3. Florence.
Best shopping: 1. Paris 2. London 3. Rome.
Best nightlife: 1. London 2. Amsterdam 3. Paris.
Best parks: 1. London 2. Paris 3. Barcelona, Amsterdam, Copenhagen (tied).
Most romantic: 1. Paris 2. Venice 3. Rome.
Most attractive locals: 1. Rome 2. Paris 3. Stockholm.
Cleanest city: 1. Zurich 2. Copenhagen 3. Stockholm.
Dirtiest city: 1. London 2. Paris 3. Rome, Athens (tied).
Most boring: 1. Brussels 2. Zurich, Oslo, Warsaw, Zagreb (tied).

Saturday, March 8, 2008

Investors may be cool to next IPOs

The investors lukewarm response to NT shares may force the coming Initial Public Offerings (IPOs) of Bank of Asia, Global Bank, Citizen International Bank and Sunrise Bank of Rs 300 million each, think twice.Aggressive pricing and poor advice spoilt Nepal Telecom's mega-issue. Accompanied by structural and regulatory weaknesses in the stock market, it has taken a toll on investor's confidence.
Nepal Development Employment and Promotion Bank is floating Rs 128 million shares from next week. Bank of Asia has even applied for its IPO but due to some technical reasons, it has been put off for now.The investors' confidence now largely depends upon how early the NT shares are alloted also. But Citizen's Investment Trust (CIT), the issue and sales manager, is planning to allot NT shares' as soon as possible.
"We will allot NT shares within one-and-a-half months and distribute the share certificates," said Nandan Hari Sharma, executive director of CIT. Then its up to NT to list its shares at Nepal Stock Exchange, the secondary market.However, the investors do not have a pleasing experience of buying the shares of government entities since these institutions — like Rastriya Beema Sansthan — are reluctant to give share certificates to the investors soon.
"From the preliminary data, it seems that government will be able to raise three-and-a-half billion rupees," said Sharma. "It might still go up as we will receive the complete data by next week," he said, adding that its a sealed bidding so a few million could go up after opening the bid.
However, the investors feel public offers can be revived, if good issues hit the market with face value of Rs 100. Companies like Bank of Asia, Global Bank, Citizen International Bank and Sunrise Bank that have lined up their offers should ensure appropriate marketing to avoid the adverse investor response like NT.
The past few months in the market have been one of those 'periodic bouts of excitement'. Once it even looked like we're set up for a nice rally — due to commercial banks' group — over the next six months but all of a sudden it's just back on roller-coaster ride again. As the much-talked NT shares closed the market was thought to be soaring up but its showing the sign of slow down. "It will help stabilise and expand market from the dominance of banks," Sharma said.
The government had planned to raise at least Rs 9 billion by selling NT's share — 4.5 billion in the first phase and 4.5 billion in the second phase, later. "It has just fall short of around a billion in its target in the first phase," he added. 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.

Friday, March 7, 2008

Gold Glitters, demand dips

As gold and silver prices are making new ground every day and are consolidating, seemingly in preparation for an attack on $1,000 in the international market, the domestic market is bearing the burnt. "Despite wedding season, demand of the gold has also gone down by 75 per cent in the domestic market," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association's (NEGOSIDA).
Gold price touched historic high of Rs 20,490 per 10 gram — Rs 23,900 per tola (11.664 gram) — in the domestic market on Friday, the closing day of the week. "The price of precious yellow metal has gone up due to continuous weakening of dollar," he said, adding that the price may go up to Rs 25,000 per tola (11.664 gram).
"Thereafter, who will buy gold and pay over Rs 25,000 per tola," he added. 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 $105 per barrel today, slow down of US economy, weak global stock market and further weakening of dollar pushed the price of gold up.The precious yellow metal in the local bullion market opened at Rs 19,890 on Sunday and surged by Rs 310 to Rs 20,200 on Monday. On Tuesday, it flared again by Rs 205 to Rs 20,405 per 10 gram setting a new record.
However, on Wednesday, it plunged by Rs 130 to Rs 20,275 and bounced back by Rs 215 to Rs 20,490 on Thursday and closed at the same price on Friday, the last day of trading in the domestic market.
Similarly, silver price is also witnessing a bullish trend. It increased by Rs 10 to close at Rs 400 per 10 gram on Friday from the opening price of Rs 390 on Sunday, in the domestic market.The price of silver witnessed a steep rise this week by Rs 3 on Monday, Rs 5 on Tuesday, Rs Rs 2 on Thursday to close at Rs 400 on Friday.
According to a report, between August 1, 2007 and February 21, 2008, gold price rose by 42 per cent.

Take a look at the fundamentals that have driven gold higher, have they changed? Not at all! Has the dollar's fall terminated? Has the oil price stopped rising? Has the credit crunch been resolved? Has the world's money system been repaired and solidified? Has the wealth's move from West to East stopped? Has confidence in the US housing market and the global economy been restored? Is the investment climate globally looking solid and worth more investment? Until the answer to these questions remains negative gold has good reason to rise further. — Agencies

Why did gold go up to $990 in the first place? Was it simply demand versus supply, isolated from external factors? No, not at all! Gold has risen as other investments have lost their glitter. The sapping of confidence, away from the dollar, away from the subsidence of consumer confidence, the threat of 'contagion' caused by the sub-prime crisis, which metamorphosised into the 'credit crunch' where bankers became scared to lend to bankers right across the world, the fallout from which we will see as the reporting season is now upon us. When these and the other ancillary factors are synthesised, there will be a structural crisis, which the central banks are finding it very difficult to fight, let alone conquer. So, people look for an investment that will not suffer when the alarm bells ring. They look for something that will go the other way – up!Gold is doing that very well indeed. It has acted remarkably as a 'Thermometer', rising as the investment temperature rises across the globe.As something that cannot be printed and is nobody's obligation, just a small amount of investment would propel gold up beyond the market's imagination. Don't just look at the last 20 years ofthe history of gold; look at why it went up in the 70's and 80's. It was for the same reasons, only this time the power to hold it down has declined alongside the will to do so! — Agencies

Thursday, March 6, 2008

Multi VAT suggested

Private sector has recommended three different rates for value added tax (VAT) — instead of present single rate — to make it applicable from the next fiscal year.
A joint study taskforce — constituted under coordination of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) with the representative of Nepal Chamber of Commerce (NCC), Confederation of Nepalese Industries (CNI) and Nepal Foreign Trade Association (NFTA) — today presented its recommendations to the finance minister Dr Ram Sharan Mahat to implement three different rates of VAT from the next fiscal year.
The taskforce has come up with recommendations of segregating the current VAT rate of 13 per cent into three multiple rates — one, four and 13 per cent — for different products and services.
"The three different rates have been suggested to adjust with India, keeping in mind that porous border and increasing trade concentration with the southern neighbour," said Pradeep Man Vaidya, chairman of Income Tax and VAT Committee at FNCCI, who has led the taskforce. The taskforce has also suggested widening tax regime reducing the list of items under VAT exemption.
According to the taskforce report, the items under one per cent of VAT include primary agro and herbal products, agricultural machineries and pesticide, pharmaceutical products and their raw materials, jewelleries, electrical goods and power generation machineries. It has also suggested to charge one per cent VAT on non-profit education, training and research, air and road transportation, courier service and professional services, in the service sector.
Under the four per cent of VAT, the taskforce has suggested to incorporate the processed items including agro and forestry products, vanaspati ghee, butter, ice cream, cheese, processed meat, fish and fruits, sweets, textiles and other yarns except woollen, IT related products, mobile phones and other electrical goods.
Likewise, the government should levy four per cent VAT on healthcare provided by private sector, printing and publication of educational materials, packaging materials and mineral products, suggested the report.
The report has suggested to levy 13 per cent VAT except on basic agro produces, daily consumable basic goods, live plant and animals, government and non-profit healthcare, non-profit education, goods of art and cultural values, sculpture work and public-passenger transportation.
Speaking on the occasion, FNCCI first vice-president Diwakar Golchha said that the induction of multiple VAT rates could increase the revenue by controlling contraband and unauthorised trade. "It will also discourage under invoicing and increase the number of taxpayers," he claimed.
Nepal introduced VAT in November 1997 replacing four different taxes including the Sales Tax, Contract Tax, Hotel Tax and Entertainment Tax. At present, VAT is the largest contributor to the government's coffer amounting for more than 30 per cent of the total revenue. The collection of VAT is on a steady rise since its inception a decade ago with its collection standing at Rs 18.90 billion in the fiscal year 2004-05, Rs 21.93 billion in 2005-06 and Rs 26.55 billion in 2006-07.
The rate of VAT was fixed at 10 per cent when it was first introduced and the amended VAT Act-2005 raised the rate to 13 per cent with effective from the fiscal year 2005-06. Currently VAT is levied at a single rate of 13 per cent and certain goods and services are exempted from VAT. The tax is collected at every point of selling of goods and services.

Rates recommended
Under one per cent — primary agro and herbal products, agricultural machineries and pesticide, pharmaceutical products and their raw materials, jewelleries, electrical goods and power generation machineries, non-profit education, training and research, air and road transportation, courier service and professional services.
Under four per cent — agro and forestry products, vanaspati ghee, butter, ice cream, cheese, processed meat, fish and fruits, sweets, textiles and other yarns except woollen, IT related products, mobile phones and other electrical goods, healthcare provided by private sector, printing and publication of educational materials, packaging materials and mineral products.
Under 13 per cent — except on basic agro produces, daily consumable basic goods, live plant and animals, government and non-profit healthcare, non-profit education, goods of art and cultural values, sculpture work and public-passenger transportation.

Wednesday, March 5, 2008

Government revises GDP growth to 4.5 per cent

The government has revised GDP growth to 4.5 from its earlier projection of five per cent.
Launching a mid-term budget review today, finance minister Dr Ram Sharan Mahat said all micro economic indicators are looking up despite the unrest in Tarai and our presumption of economy doing bad. "The revenue collection is up by 25.4 per cent to Rs 47.39 billion within the first six months of current fiscal year," he said. Last year, it was up by only 19.7 per cent.
Similarly, the income from tourism has also gone up by
65.3 per cent and remittance is up by 18.2 per cent contrary
to the saying that the remittance is going down.
"In the first six month of last fiscal year, the dollar reserve was at $2.55 billion whereas it has touched $2.62 billion in the first six months of current fiscal year," Dr Mahat said, adding that except the exports that has gone down by 5.8 per cent, all the micro-economic indicators indicate that the economy is on right track. He blamed the labour unrest and regular strikes, Chhakka jam and tyre-burning culture for the down slide in exports.

Tuesday, March 4, 2008

Bullion continues bullish trend

Gold is in the midst of a 'mega bull run' as it scaled a new historic high of Rs 20,200 per 10 gram (Rs 23561 per tola) today up by Rs 310 from yesterday's price of Rs 19,890 per 10 gram.
"The precious yellow metal might cross Rs 25,000 per tola (a local unit that is equal to 11.664 gram) soon, the gold traders say. The price of the precious yellow metal has been rising steeply in the last two weeks.
Similarly, the price of silver has also posted yet another record of Rs 393 per 10 gram (458.40 per tola) today up by Rs 3 from yesterday's Rs 390 per 10 gram.
Internationally, gold and silver are asset class, so these two metals had generated a compounded annual growth rate of 14.41 per cent and 17.34 per cent respectively in the last seven years.
In the international market also, gold price touched a fresh high. The price of gold rose to a record high of $984.95 an ounce today, extending gains on the back of a weak dollar and its safehaven status amid concerns about rising inflation.
The dealers said that against a backdrop of inflation and fears the US economy could be at risk of recession, investors were looking to gold and other precious metals for safety.
It, however, later slipped back to $981.35. On the London Bullion Market, the price of gold has closed at $971.50 on Friday.

Monday, March 3, 2008

Myths and market realities

Nepali capital market that has been a major attraction in recent years has been on a rollar-coaster ride. Within its short-span of life, Nepal Stock Exchange (Nepse), not only saw market capitalization of more than three trillion rupees, but also witnessed rain of Initial Public Offerings (IPOs) and the mega-issue of 7.5 million-unit of Nepal Telecom that closed last week.
Investors have been taking to this new-found investing opportunity seriously with heavy investment but at times they even gamble on speculation because of hear-say.
There is no doubt that capital market is the fast track to capitalism but globally it has its own rules and norms that Nepali capital market seems lacking. Due to less investment opportunities, Nepalis are investing on whims. They should not put their hard-earned money on any company without enough study.
To help them, Rabindra Bhattarai — a lecturer at the Shankerdev Campus and trainer of share market — has brought yet another book Nepalko Share Bazar Ek Bisleshan. Though, the book is a collection of his earlier published 41 articles in various newspapers, its an eye-opener for the investors. If one goes by the book one can find difference between the myths and market realities.From analysis on why Nepse is on fire to the recent mega issue of NT, the book covers a wide range of issues relating to Nepali capital market.
Except for some proof mistakes, the book gives a bird's eye-view of Nepali capital market.

Book: Nepalko Share Bazar Ek Bisleshan
Author: Rabindra Bhattarai
Publisher: Securities Research Centre and Services Pvt Ltd
Pages: 89
Price: Rs 55

Sunday, March 2, 2008

Gold good bet, silver is better

The price of gold has been steadily rising, but theprice rise of silver may outperform gold this year.
Gold scaled a historic high by registering Rs 19,890per 10 gram today.The price of silver has been steeply rising. Lastyear, in March, it was $13.53 per troy ounce. Today itwas $19.62 per troy ounce. In the domestic marketalso, silver price has seen a bullish trend. Itregistered a historic high of Rs 390 per 10 gram todayfrom last week’s closing of Rs 364.Tej Ratna Shakya, president of Nepal Gold and SilverDealers’ Association (NEGOSIDA), agrees that thesilver price is rising steeply. “Last year, silverprice was hovering around Rs 327.50 per 10 gram.
Today, it has hit a historic high of Rs 390.”According to Kotak Commodity Services Ltd (KCSL) — theglobal commodity service — gold price may witness onlya 17 per cent rise this year, whereas silver couldincrease by27 per cent.For more than 4,000 years, silver has been regarded asa form of money and store of value. However, since theend of the silver standard, silver has lost its roleas legal tender in the US. Silver, by just about anyrelative objective measurement, is cheaper than almostany other industrial commodity and has far greaterpotential to the upside.When it comes to investing, there are only a few broadasset classes from which to choose,including stocks, bonds, real estate and all othertangibles, commodities and collectibles.Investing in silver, in comparison to othercommodities and even land, at present, could be saferand is affordable for the common Nepalis.
“Silver is used in many applications. Because silveris such a good conductor of electricity, it is used inmany electrical applications, including switches,contacts and fuses. All electrical appliances use
silver contacts and switches,” Shakya said, addingthat microwaves, dishwashers, TV and telephones allcontain silver.Because silver is so reflective — in fact it is thebest reflector known — it is used in mirrors and incoatings for glass or other metals. Metals can becoated with silver by a process called electroplating.It is also used in the health industry like in silversulfadiazine, which is a very powerful compound usedto treat burns and it is used in tooth fillings also.“One of the largest uses of silver is in photographicpaper and film,” he added.
It ia also used in the health industry like in silver sulfadiazine, which is a very powerful compound used to treat burns and it is used in tooth fillings also. "One of the largest uses of silver is in photographic paper and film," he added. "Thus, globally, silver has high demand in industries. Though it is used only for jewellery and utencils in Nepal."
Gold and silver are asset class, so these two metals had generated a compounded annual growth rate of 14.41 per cent and 17.34 per cent respectively in the last seven years. This highlights silver's out-performance, which is believed to continue in the years to come, according to the experts.

Nepal Development Marketplace

To encourage development activities, World Bank launched the second edition of Nepal Development Marketplace — an unconventional programme and forum for idea — on March 1.
"Twenty five innovative ideas and inventive partnerships from across Nepal will be awarded cash grants of up to Rs 1.5 million each should they emerge as winners of the Nepal Development Marketplace-2008," Susan G Goldmark, country director of the World Bank, launching the programme.
Nepal Development Marketplace-2008 will be an open, transparent competition to promote fresh thinking and harvest the most innovative ideas about peace and development, expansion of livelihood opportunities and delivery of basic services to the poor.
"Some ideas will succeed, others may not. Successful or not, Nepal Development Marketplace will take a risk by trying a new idea," Goldmark said, adding that it is open to anyone with a good innovative idea to share.
Proposals must be received by April 17, after which a review process involving a team of technical assessors will select approximately fifty finalists. "The finalists will be invited to participate at the national competition to be held in Kathmandu on June 15. An independent jury of eminent professionals will select the winners," informed Rajib Upadhya, senior external affairs specialist at the World Bank.
To be eligible to compete, proposals must reflect the theme 'Securing Peace through Development' in any of the areas including health, education, water and sanitation, agriculture, irrigation and food security, infrastructure (roads and transportation), energy, small business and micro enterprise support, information and communication technologies and employment creation.
Earlier, Nepal Development Marketplace — held in 2005 — produced over one thousand eligible entries. Among the winners, Mahabir Pun — who later went on to win the prestigious Ramon Magasaysay Award — and Morang District Agriculture Office — whose promotion of the System of Rice Intensification (SRI) is now being emulated in various parts of the world — are some of the examples.

Nepal Development Marketplace 2008, locally branded as the 'Lau Na Aba Ta Kehi Garau' contest, is a collaborative effort sponsored by the World Bank and Nepal Poverty Alleviation Fund and supported by the Society of Economic Journalists, Nepal.
It is modeled after Development Marketplace that World Bank Group sponsors globally, which has been described by the Harvard Business Review as 'best practice'.

Saturday, March 1, 2008

Indian budget highlights

Indian finance minister P Chidambaram presented the annual budget of $185 billion for 2008-09 in the Lok Sabha on February 29. However, corporate taxes will contribute a whopping 24 per cent of the total budget for 2008-09.
There is a remarkable increase in the plan expenditure to create assets. In the next fiscal year, the government will spend Rs 243,3860 million Indian Currency (IC) under the plan head against the revised Rs 207,5240 million IC in 2007-08.
The Indian finance minister in his budget speech today said that the fiscal position of the country had tremendously improved. "The revenue deficit for the current year will be 1.4 per cent against the budget estimate of 1.5 per cent and the fiscal deficit will be 3.1 per cent against the budget estimate of 3.3 per cent," he said.
As much as 43 per cent contributions to the state coffer come from income, excise and customs taxes, accounting respectively for 15, 13 and 15 per cent. Service and other taxes will contribute seven per cent.
All taxes together account for 74 per cent of India's total budget, with the rest coming from borrowings, non-tax, non-debt capital and other liabilities. The non-tax revenues make only 10 per cent of the total budget amount.
The states' share of taxes and duties claim 19 per cent of the budget funds, followed by defence that gets 11 per cent of the total funds.
In 2008-09, the government intends to receive Rs 602,9350 million IC from the taxes, while the capital receipts would generate Rs 147,9490 million IC compared to the revised Rs 184,2750 million IC in 2007-08.
Compared to the current fiscal year, there is a slight increase in non-plan expenditure in the next fiscal, estimated to be Rs 507,4980 million IC. It was Rs 501,8490 million IC in 2007-08. The non-plan expenditures take care of maintenance and other in-built expenses involving salaries and other costs.
Chidambaram said that revenue deficit in 2008-09 is estimated to be one per cent of the GDP, while the fiscal deficit of 2.5 per cent at Rs 133,2870 million IC.highlights
Highlights of Indian Budget 2007-08

The highlights
Over eight percent growth for 12 successive years
Maintaining growth with price stability
Maintaining supply of food main task in coming fiscal Concern
Inflationary trends Concern: Capital inflow exceeds current account deficit.
Farm growth disappointing at 2.6 percent
Gross budgetary support rises to Rs 380 billion
Education gets 20 percent more to Rs.344 billion from Rs.286.8 billion
Rural infrastructure scheme Bharat Nirman to get Rs.312.8 billion.
Midday meal scheme for schoolchildren to get Rs.80 billion
School enrolment scheme Sarva Shiksha Abhiyan to get Rs.131 billion
Government and Reserve Bank of India to manage capital inflow
16 new central universities 3 new Indian Institutes of Technology.
Government to raise additional resources worth Rs.100 billion
National Rural Employment Guarantee Scheme (NREGS) extended to all 596 rural districts
NREGS to get Rs.160 billion, more money will be provided on need
Jawaharlal Nehru Urban Renewal Mission to get Rs.68.66 billion, up from Rs.54.82 billion.
National health insurance for poor introduced
Northeast development to get Rs.14.55 billion
Scheduled Castes, Scheduled Tribes, minorities get special allocations Rs.5.5 billion for minority dominated districts HIV/AIDS prevention to get Rs.9.93 billion.
Complete loan waivers for farms up to 2 hectares
Weather based crop insurance scheme to continue Rs.400 million for special tea fund Rs.200 billion for irrigation.
Total plan spending will be Rs.2.4 trillion
Farm credit target at Rs.2.8 trillion Health spending to rise 15 percent.
Loan waiver to benefit 40 million farmers
Farm debt waiver scheme to cost Rs.600 billion Farm debt scheme to be completed by June 30.
Additional 10,000 MW power generation by March 2009
To create national fund for power transmission and distribution Foreign direct investment (FDI) in April-Dec 200 at $12.7 billion.
Banks to open 250 rural household accounts every year in rural branches
Banks to give loans to self-help groups for income-generating activities, social needs and debt swapping
National Bank for Agriculture and Rural Development (Nabard) to get Rs.50 billion to refinance loans
Small Industries Development Bank of India (Sidbi) to get Rs.40 billion to refinance loans National Housing Bank to get Rs.12 billion.
Foreign Exchange Derivatives Market to be set up
Coal regulator to be set up
Textile upgrading funding to get Rs.10.9 billion
National highways to get Rs.129.7 billion Rs.440 million to improve infrastructure at 22 Sainik schools.
Food subsidies at Rs.326.67 billion
Defence spending to rise 10 percent
PAN requirement for all financial markets
No income tax on annual earnings of Rs 150,000 Rs 4,000 minimum relief for all tax assesees
10 percent tax on income between Rs 150,000 and Rs 300,000
20 percent tax on income between Rs 300,000 and Rs 500,000
30 percent tax on income over Rs.500,000
No income tax for women with annual income up to Rs 180,000
No income tax for senior citizens with annual income up to Rs.225,000