Monday, August 31, 2009

Third Party Insurance comes into effect

Hopefully, highway blockades in the wake of accidents and resultant deaths will be a thing of the past.
"From September 1, third party insurance has become mandatory and thus, compensation. Now, major supply routes will be spared of disturbances," said Finance Minister Surendra Pandey. Highway and road blockades at various places have become a frequent occurrence due to accidents and ensuing protests.
Vehicle owners can now get third party insurance at a little over the usual rate they are paying for their vehicle insurance and ensure peace of mind. "Third Party Insurance is a liability cover purchased by an insured -- the first party -- from an insurer -- the second party -- for protection against the claims of another -- the third party," said Prof Dr Phatta Bahadur KC, chairman of Beema Samiti.
"Vehicle Insurance Rate Regulation-2009 will also benefit employees in transportation sector, passengers and common people," KC said adding that TPI willnot be expensive but the deceased's family members or injured's relatives can claim a substantial amount, though it differs to vehicle to vehicle. The vehicle insurance comes under the non-life insurance.
In his budget speech for the fiscal year 2009-10 on July 13, Pandey had announced that the third party insurance would be implemented from August 17. Now, it will be implemented from September 1 as the Department of Transport Management took some time to finalise the process of payment. "The insurance company must pay within 21 days in case of death caused by accident and within two months in case of injury," said Sharad Chandra Poudel, director general of Department of Transport Management. "CDOs -- as urged by transport entrepreneurs -- will see to the settlement, as in the past such incidents have caused law and order problems," he said adding that unlike earlier police will not hold the vehicle back in case of accident, if the owner shows the vehicle's TPI papers.

Sunday, August 30, 2009

World's best paid cities

Residents of Swiss financial centre Zurich know that their country has more to offer than world-class chocolate and precision watches. They can now brag that, on the whole, they earn more than anyone in the world. Zurich-dwellers rake in $22.60 per hour in average net pay, according to a wage survey released August 19. The runner-up city is less than 200 miles southwest: Geneva, where jobs pay $20.40 per hour.
Though the Swiss cities provide the most cash to workers, they are not the most expensive locales for employers to set up shop. Labourers in glittering Copenhagen command the highest gross pay, at an average of $32.80 per hour.
Employees in Zurich and Geneva not only take home top dollar, they can buy the most with their earnings. When you factor in local prices, they blow away any other international city in terms of what workers can get for their money.
Working life in Mumbai marks the other end of the spectrum. Because of its $1.20 average hourly wage, the impoverished urban center trails the list of 73 cities compiled in the Prices and Earnings report, released by every three years.
UBS arrived at its rankings by studying the wages, taxes and working hours of 14 occupations across 73 world cities. Schoolteachers have a very different lifestyle in Berlin, where they earn an average of $35,800 per year after taxes, than they do in Bucharest, where the same work nets them only $4,100. A female factory worker brings in $18,200 in Chicago, but less than a tenth of that--$1,800--in Cairo.
To accurately measure each city's quality of life, the researchers looked not only at gross salaries, but what workers brought home after taxes, based on the number of hours typically worked in their city.
To determine how far citizens could stretch this amount, they then calculated the cost of a generic shopping basket, comprising 154 commonly consumed products and services in each city. The basket was priciest in Oslo, at $112.
"The prices of goods are higher in Oslo because it's relatively remote, it's expensive for companies to operate there, and because taxes are high," says Robert Helsley, a professor at the University of California, Berkeley's Haas School of Business.
In Sydney, the same essentials cost a more reasonable $68.50, but the cheapest goods could be found in two Indian Cities: Delhi and Mumbai, where the shopping basket costs $37.60 and $30.90, respectively.A Parisian can buy 61.3 baskets with their annual net income, but a Peruvian living in Lima can only afford 32.4 with theirs.
To crystallize the meaning of earnings in different countries, the study introduced a contemporary but ubiquitous item to the basked of goods--an iPod Nano. Taking into account pay, taxes and the price of goods, workers in Cairo would have to toil for 105 hours to get their hands on one of the MP3 players, while those in Zurich and New York can pick one up after working for the least amount of time of all the countries surveyed: 9 hours--roughly a day's work.
The list was crowded with European cities: 14 of the 20 wallet-fattening cities were Western European capitals. All four of the American cities that were included in the analysis made the top 20: New York, Los Angeles, Miami and Chicago. But two other cosmopolitan North American cities, Montreal and Mexico City, didn't make the cut--in fact, Mexico City was one of the lowest-earning of all those surveyed, beating only Delhi, Manila, Jakarta and Mumbai in wages earned. The top 20 includes one city each from the Asian and Australian continents--Tokyo and Sidney.
The dominance of European cities in the rankings is partly a function of sample: there are more of them on the overall list. But that's not the only reason. During the earnings periods for which most companies reported--roughly the 2008 calendar year--the dollar depreciated significantly to the Euro.
Switzerland specifically fared well because of its strong financial services sector and small size."Industry obviously influences what the overall compensation will be," says Michael Ryan, chief investment strategist for Swiss bank UBS' wealth management unit, which produced the report. "Switzerland tends to have very specialized products, and financial services."
But the tumultuous global economy, whose effect may not be fully reflected in these numbers, may soon knock financial centers like Zurich, Geneva and New York from the top spots. "As we see impact of global financial crisis play out, will that have an emphasis on reordering the list?" says Ryan. "We won't get that from this data. It's too fresh."

Top 5 World's Best-Paid Cities
1. Zurich, Switzerland
Net pay per hour: $22.60
Gross pay per hour: $30.30
Tax and Social Security contributions: 46%
Vacation days: 23
Working time for an iPod Nano: 9 hours

2. Geneva, Switzerland
Net pay per hour: $20.40
Gross pay per hour: $29.20
Tax and Social Security contributions: 30%
Vacation days: 23
Working time for an iPod Nano: 10 hours

3. New York
Net pay per hour: $19
Gross pay per hour: $26.10
Tax and Social Security contributions: 28%
Vacation days: 12
Working time for an iPod Nano: 9 hours

4. Dublin
Net pay per hour: $18.70
Gross pay per hour: $22
Tax and Social Security contributions: 15%
Vacation days: 21
Working time for an iPod Nano: 10 hours

5. Luxembourg
Net pay per hour: $18.20
Gross pay per hour: $22.40
Tax and Social Security contributions: 18%
Vacation days: 25
Working time for an iPod Nano: 10 hours

Government seeks wage hike for migrant workers

DUBAI: Nepal's visiting Minister of Labour and Transport Mohammed Aftab Alam discussed the low wages being paid to Nepali workers in comparison to workers of other countries in the UAE.
Minister Alam held talks in Abu Dhabi with the UAE Minister for Labour, Saqr Gobash, and the Minister of Foreign Trade, Sheikha Lubna Al Qasimi on a gamut of issues like wages, the image of Nepali expatriates and housemaids' jobs for Nepali women.
He said the Nepal government is making efforts to increase employment opportunities and improve working conditions for Nepalis in the UAE, including raising the minimum acceptable wage it set last year. "Nepali workers' wages are set at Dh600 ($163) by our government. However, we see that workers from other nations are taken at higher wages than Nepali workers," he said adding that he raised the issue in the discussion with the UAE ministers.
"We hope it is resolved soon," Alam said. "The government also plans to lift the ban on Nepali women working as housemaids in Gulf countries." He added that Nepali maids are still being hired illegally and that removing the ban could help regulate the process and even lead to the offenders being caught.
"We are considering lifting the ban on our citizens working as housemaids in Gulf countries as well as raising the minimum wage acceptable for those taking jobs in the UAE," he said adding that if the government opens the market, action can be taken against agents. "I will submit a detailed report about this to the government," he said.
Alam also promised action against recruitment agents who made false promises to construction workers. "Agents violating laws are an issue for the government and we are studying how to counter them. We intend to bring them under the laws of Nepal and strict legal action would be taken against these offenders," he said.
With high unemployment and a weak economy following years of civil strife, Nepal relies heavily on the millions of dollars remitted by non-resident Nepalis around the world. A large number of Nepalis in the UAE are employed as construction workers while some work as security guards or in the hospitality industry. Several others have businesses.
"Nepali workers are disciplined, good and hardworking, which is why their numbers in the UAE are increasing," he said adding that the government is setting up programmes to train workers so that they can get employment in skilled and semi-skilled jobs.
On his first visit to the Emirates, he also took part in the third Middle East Conference of the Non-Resident Nepali Association (NRNA), held in Dubai over the weekend, which discussed issues facing the community in the region and around the world."
At present, Nepal faces the challenge of unemployment and the government is keen to improve the economy. We were assured all co-operation from the UAE government. We will now prepare a detailed study on which sectors the two nations could co-operate," he added.

Nepse at low, but shares being traded

The plunging Nepse index has not discouraged share transactions as the number of shares being traded is still encouraging. Nepse dropped today as well but the number of transaction saw encouraging growth.
Nepse dropped by 10.39 points to 671.15 points from Thursday's closing of 681.54 points. Nepse had plunged by 28.28 points to 681.54 points from last Sunday morning's opening of 709.82 points to close at 681.54 points on Thursday -- the last trading day in the domestic secondary market.
Except finance companies and insurance companies sub-groups, all the other sub-groups indices plunged to pull Nepse down. However, the total number of share-unit transactions did not see a remarkable drop as today 100,516-unit of shares -- through 1,021 transactions -- were traded.
In the fiscal year 2002-03, the secondary market witnessed some 2.42 million unit of shares traded and that tripled in the fiscal year 2003-04 to 6.46 million-unit shares. The fiscal year 2004-05 was also encouraging in terms of number of shares traded as that year some 18.43 million-unit shares were traded. It was also triple than the year before.
However, the secondary market did not perform well and investors' confidence dropped to a low resulting in lesser number of shares being traded in the fiscal year 2005-06. That year observed only 12.22 million shares traded. It was more than 30 per cent lower than a year before. But again the number of shares being traded started picking up. In the year 2006-07, some 18.14 million shares were traded and that jumped to 28.59 million in the fiscal year 2007-08.
The year 2008-09 saw the largest number of shares traded -- 30.54 million-units -- as Nepse also went up to 1000-point mark when the market rallied. This fiscal year also, the number of shares being traded is encouraging despite Nepse plunging below the 700-point mark twice -- last week and a couple of months ago.

Saturday, August 29, 2009

Dividends fuel transactions, Nepse drops below 700-point mark

The declaration of dividends -- cash and shares -- has made the shares of Nabil Bank, Standard Chartered Bank Nepal, Nepal Investment Bank, Citizens Bank International and Bank of Kathmandu hotcakes in the secondary market this week.
This week too, Standard Chartered Bank Nepal topped the chart in terms of transaction amount with Rs 65.45 million, though it declared its dividends two weeks ago. Nabil bank followed with Rs 54.55 million whereas Citizens' Bank International (with Rs 41.80 million), Bank of Kathmandu (with Rs 37.81 million) and Nepal Investment Bank (with Rs 35.62 milllion) topped the chart in terms of transaction.
However, these banks' transactions could neither rescue Nepal Stock Exchange (Nepse) nor the commercial banks' sub-group. Nepse plunged by 28.28 points to 681.54 points from Sunday morning's opening of 709.82 points. Similarly, the commercial banks sub-group -- one of the key market propellers -- lost the whopping 45.86 points to 708.75 points from the Sunday morning's opening of 754.61 points.
Except, hotels sub-group, all the other sub-groups performed poorly this week. Development banks sub-group plunged by 12.92 points to 707.84 points from the opening 720.76 points. Finance companies sub-group dropped by 10.87 points to 662.79 points from the Sunday morning's opening of 673.66 points, while the others sub-group also lost 4.70 points to 659.11 points from 663.81 points. Hydropower and insurance sub-groups lost only 2.83 points and 1.55 points to drop to 874.79 points and 640.26 points, respectively.
However, 122-unit shares of Soaltee Hotels -- that were traded on Thursday -- pushed the hotels sub-group's index up by 2.90 points to 366.85 points from Sunday morning's 363.95 points. The rarely traded manufacturing and trading sub-groups did not observe any trading this week too.
In terms of number of share units traded, National Hydropower Company topped the chart with 76,000-unit shares changing hands while in terms of number of transactions Citizens' Bank International topped the chart with 1068 transactions.
The transaction amount also decreased by 19.46 points to Rs 512.72 million this week against last week's increase of 63.50 per cent.
However, in the total transactions group-A companies' contribution matched almost last week. This week, the group contributed 62.89 per cent, wheras it was 67.13 per cent last week. The 78-scrip sensitive index -- a barometer of Group-A companies -- lost 10.16 points to 180.21 points, though float index -- calculated on the basis of real transactions -- skidded down only by 2.63 points to 65.95 points from the Sunday morning's opening of 68.58 points.

The market propellers
KATHMANDU: Out of the 26 commercial banks these banks declared the cash dividends and bonus shares.
Banks-- cash dividend -- bonus shares
Standard Chartered Bank Nepal -- 50pc -- 50pc
Nabil Bank -- 35pc -- 50pc
Nepal Investment Bank -- 20pc -- 0
Citizens International Bank -- 10pc -- 0

Book on Techincal analysis of shares
KATHMANDU: Though the domestic share market doesnot follow the internationally-accepted practice -- neither fundamentals nor technical -- and directed by hearsay and noise creators, Rabindra Bhattarai, a share analyst and lecturer at Shanker Dev Campus, has brought a book on Technical analysis of Shares in the market; Share ko Prabidhik Bishleshan (Technical analysis of shares). The book tries to explain some of the technical system of analysis like double top formation, double bottom formation, head and shoulder formation, rounding top, rounding bottom, triangle, rectangle, support and resistance, A-D ration and volumn analysis. The investors could take more benefit, if they read the book, though it could not be guaranteed in the domestic market. Bhattarai rightly quotes in the book -- buyers buy in the expectation that the price will go higher and the sellers sell because they think the price will go down, its a huge psychological game that repeatsdaily at the floor. But the book might boost pyshological confidence of the investors with logical analysis.

Thursday, August 27, 2009

Nepse down, float index up

Bank of Kathmandu (BoK) has sent the float index up, though marginally by 0.04 point to 65.95 points, despite a fall in the Nepse index.
Nepse, after yesterday's consolation gain, today lost a marginal 0.77 point to drop to 681.54 points. But the float index gained.
The shareholders of Bank of Kathmandu gained Rs 76 per share today. Around 4,866 shares of BoK changed hands today pushing the float index up by 0.04 point to 65.95 points. "If the share price of any company that has more public shares increases, it can push up the float index even if the Nepse index falls," said Rabindra Bhattarai, share analyst. BoK has 58 per cent -- the highest public shares among commercial banks.
Float index is calculated on the basis of real transaction, while calculating Nepse total volumn of listed shares is calculated.
The banking index went down by 2.51 points to 708.75 points because of the calculation of the total shares -- promoters and ordinary -- of banks. The sensitive index also lost 0.66 points to drop to 180.21 points.

SMEs' growth key to recovery

Asia's attempts to rebalance growth towards domestic sources will in part depend on the development and growth of the region's business sector, says a new report from the Asian Development Bank (ADB).
The report, published in a special chapter of Key Indicators 2009, the flagship annual statistical publication of ADB, says a return to rapid regional growth will require stronger domestic demand, for which the emergence of a large and rapidly growing urban middle class is key. The health of Asian enterprises, especially small and medium-sized enterprises (SMEs) -- where most Asian workers are employed -- will be important in this regard.
The special chapter, titled 'Enterprises in Asia: Fostering Dynamism in SMEs', looks at the actual and expected impacts of the current global economic crisis on workers and enterprises and discusses how to make SMEs more innovative and productive once the crisis has played out.
"In view of the weak outlook for the major global economies, it's unlikely that Asia can export its way out of this slump, as it did after the 1997-98 Asian financial crisis," said Jong-Wha Lee, ADB chief economist. "Consequently, some economies need to accelerate the rebalancing process to increase domestic demand, and to assist that process they need to take steps to remove the constraints to growth on SMEs, which so many Asians rely on for their livelihoods.
"Many of the region's most dynamic and export-oriented enterprises have been forced, as a result of the crisis, to scale back operations, cut production, and lay off workers. In seven out of eight East and Southeast Asian countries tracked in the report, manufacturing employment has declined by about two per cent to seven per cent between the first quarters of 2008 and 2009.
Smaller enterprises, which tend to be more domestically-oriented, have been less affected, but the credit crunch and a slump in demand are now beginning to hurt. Many governments have taken steps to support economies through fiscal stimulus and the easing of monetary policies. Some have directly assisted enterprises through credit guarantees, subsidized loans and fiscal incentives, among other programmes.
The report says public policy has a key role to play in helping SMEs grow and become more productive. Governments should work with commercial forces to correct existing market failures, particularly in the provision of finance. Policy needs to help smaller firms raise their levels of productivity and employment through innovation, which includes adopting new technology and diversifying into new markets. Governments can assist firms by providing information services on technology and markets, vocational training, and technical support services, and by fostering linkages between SMEs and large enterprises, said the report.
A key challenge in public policy is to understand, within individual country contexts, which specific factors restrain the growth of SMEs and their diversification from traditional low-productivity activities to modern, higher-productivity activities, and how to design and implement interventions that are truly effective.

Wednesday, August 26, 2009

ADB cheerful

Asia and Pacific countries continue to make broad progress in reducing extreme poverty but hunger still remains widespread and many economies are struggling to meet other Millennium Development Goals (MDG), including reduction in maternal mortality rates and access to sanitation, latest data reveal.
The data were announced today in Key Indicators 2009, Asian Development Bank's (ADB) flagship annual statistical publication. It presents the latest available economic, financial, social, environmental, and MDG indicators for regional members of ADB. Over the past 15 years, Asia has made rapid progress in the fight against poverty, reducing the number of poor from around one in two people to around one in four. However, large pockets of extreme poverty continue to persist even as many economies have posted record growth rates over that time. "With the recent global downturn, which has led to large decline in exports, production, and aggregate demand, regional growth will continue to be under severe downward pressure," said Jong-Wha Lee, ADB chief economist. "Slower growth in the short-term will make progress in achieving the Millennium Development Goals difficult for many countries in Asia and the Pacific.
"The region is facing serious challenges on goals linked to sanitation and maternal mortality. The indicators show that maternal mortality rates remain unacceptably high in many countries such as Afghanistan, Cambodia and Nepal while more than a quarter of urban households in 13 countries still lack access to improved sanitation. The region's fast growth in recent years has also put severe strains on the environment, with developing Asian countries becoming heavy contributors to greenhouse gas emissions.
Key Indicators 2009 regional tables, covering economic, financial, and social development indicators, provide further insights into the overall health of the region. The latest available data show that a growing number of people aged 65 or over is expected to put an increasing strain on health and welfare infrastructure going forward while per capita incomes show that the gap between rich and poor countries remains wide. Inflows of foreign direct investment fell sharply in a number of economies last year as a result of the global economic crisis, while registering new businesses remains a lengthy process in some countries. At the same time, the data show that savings ratios in Asia remain broadly high, intra-regional trade is strong and the balance of payments position of most economies is sound.

Monday, August 24, 2009

Nation's First Citizen first to get PAN card

The Inland Revenue Department (IRD) launched a direct tax net expansion campaign today, distributing Permanent Account Number (PAN) to President Dr Ram Baran Yadav, Vice-President Paramanand Jha, Prime Minister Madhav Kumar Nepal and Ministers today
Finance Minister Surendra Pandey handed over the PAN cards under his dream project that he had announced in his budget speech for 2009-10. "We have issued a PAN card to the president to show that no one is beyond the tax net," said minister Pandey. The government is observing fiscal year 2009-10 as Tax Participation Year.
"Individual tax payers with over Rs 1.5 million turnover and Rs 0.15 million income should register in it," said IRD director general Shanta Bahadur Shrestha. "It is targeted at also those who rent out houses, professionals including doctors and engineers and investors who have invested over Rs 10 million in the capital market," he said adding that PAN is applicable to those who are listed in Income Tax Act section 78.
According to IRD, around 3,53,121 people and companies have listed for PAN till July 15 and of them 2,76,607 are individual taxpayers. The department is planning to increase the number of PAN holders to 5,50,000 in the current fiscal year adding 1,50,000 individual and 50,000 organizational taxpayers. "We have plans to bring in over 2,00,000 taxpayers this year," said Shrestha.
Moreover, IRD has launched e-filling and verification facilities for small tax payers called D01. People having income below 1,50,000 can file online tax and also verify their account using Internet. IRD is brining online tax filing system for medium (D02) and large (D03) taxpayers within a month.

PAN distribution till July 15
Individual -- 2,76,607
Private Ltd -- 44,182
Public Ltd -- 783
Joint-venture -- 332
Cooperative -- 4,405
Partnership -- 6,539
Others -- 20,247

Rs 353.42 million Revenue collections per day
The finance ministry has been able to collect Rs 353.42 million revenue on an average everyday from the start of this fiscal year.
"Till August 22, the ministry has collected Rs 13.43 billion revenue," said finance minister Surendra Pandey here today.
The Nepali fiscal year starts from July 17. By August 22 -- in 38 days -- the ministry has collected Rs 13.43 billion revenue. "In the corresponding period the last fiscal year, collection was Rs 8.90 billion," he said adding that the increase is 51 per cent in comparison to the same period last year.
"Despite lower export of stone and sand to India due to the new provision in the budget and and temporary halt in import of automobiles, the revenue collection is encouraging," added Pandey.
Last fiscal year, his predecessor Dr Baburam Bhattarai was successful in collecting a record amount of revenue but failed to launch spending on development activities. He exceeded his revenue target of Rs 147.72 billion that had been billed ambitious.
The present Madhav Kumar Nepal-led government's ability to spend on development activities is also suspect as local bodies have not yet been formed.

Sunday, August 23, 2009

CDS Regulation draft fixes bottomline for Central Depository Company

The draft Central Depository System Regulation-2066 has fixed the minimum paid-up capital for the Central Depository Company (CDC) at Rs 300 million.
"The party interested in establishing a Central Depository Company (CDC) also has to submit a three-year business plan and operation manual, according to the draft.
Securities Board of Nepal (Sebon) has drafted the Central Depository System Regulation-2066 for the establishment and operation of the CDC. The regulatory authority of the capital market has also sought suggestions on the draft regulation.
Central Depository System (CDS) is an Electronic Book Entry System to record and maintain securities and register their transfer. "The interested party should have commensurate infrastructure," the draft reads. In CDS, ownership will be changed without physical movement of securities or execution of transfer deeds. Ownership will be transferred as soon as securities move from one account to another as it is purely a settlement vehicle and will not affect trading in any manner whatsoever.
Central Depository System (CDS) will bring tremendous efficiency and growth in the domestic capital market, but time is running short as in the Budget speech for the fiscal year 2009-10, Finance Minister Surendra Pandey has already announced that CDS will start operating by October 17.
"The Nepal Stock Exchange (Nepse), Citizen Investment Trust (CIT) and banks -- that are in operation for last five years, networth not less than paid-up capital and earning profits for the last three years -- can be the shareholders of the CDC. "But they should not have been blacklisted by the Credit Information Bureau (CIB)," says the draft.
The shareholders also have the lock-in period of five years.
Earlier, a group of banks, Nepal Stock Exchange (Nepse), Citizen Investment Trust (CIT) and Credit Information Bureau (CIB) have shown keen interest in establishing Central Depository Company.
The Central Depository Company of Nepal -- that they have envisioned -- will have 50 per cent shares of Nepse, 10 per cent share of CIB, 15 per cent of CIT and 25 per cent of a group of six promoter cum commercial banks -- Standard Chartered Bank, Nabil Bank, Nepal SBI Bank, Bank of Kathmandu, Nepal Investment Bank and NIC Bank.
The increase in volume and number of share transactions after the automation of Nepse has created the demand for the establishment of CDS that offers safety and convenience compared to holding securities in physical form. It also enhances liquidity by instantaneous transfers and delays, thefts, interceptions and subsequent misuse of certificates eliminated.

Encouraging start to revenue collection, Rs 11.74 billion in the first month

The Finance Ministry has collected Rs 11.74 billion revenue in the first month of the current fiscal year.
"The collection is Rs 4.02 billion more than that in the last fiscal year's same month," said revenue secretary Krishnahari Baskota. During the first month of the last fiscal year, the ministry had collected Rs 7.72 billion revenue. The new collection is 52.2 per cent higher than the corresponding month's in the fiscal year 2008-09 when the then finance minister Dr Baburam Bhattarai had set a target of Rs 147.72 billion. However, the revenue collection at the end of that fiscal year exceeded the target.
This fiscal year also, incumbent finance minister Surendra Pandey has set a target of Rs 176.50 billion revenue collection. He announced an accommodative budget of Rs 285.93 billion for the fiscal 2009-10 on July 13.
"The target for the first month was Rs 9.78 billion," Baskota said adding that the target has been easily exceeded and the finance ministry has collected Rs 11.74 billion.
"The result of the first month indicates that the target for this fiscal year also can be achieved easily like last fiscal year's," said an exultant revenue secretary, attributing reforms in the tax administration, new entrents in the tax net, industrial and trade-friendly atmosphere to the encouraging tax collection.
Last fiscal year, the finance ministry managed to mop up Rs 1.51 billion under the Voluntary Disclosure of Income Sources (VDIS) scheme that brought around 4,000 more new tax payers in the tax net.
However, this fiscal year the government is starting a campaign to register for service sector employees and professional consultants in the permanent account number (PAN ) to boost revenue. The government is starting to distribute PAN card to all income earners from Monday. According to the Inland Revenue Department (IRD), the president, prime minister, ministers and other high-profile officials getting PAN cards in the first phase. It will then be gradually implemented to government employees and other income earners.
The PAN card will bear ID code of the cardholder and one can easily get income details and tax clearance statements from the Inland Revenue Offices (IROs) by producing it. Introduction of PAN Card that was announced in the budget for this fiscal year was mandatory for all income groups from 2009-10. The government believes that the new system will generate additional revenue of Rs 1.50 billion. It will also enable taxpayers to get tax clearance report instantly. The government believes that the over 200,000 taxpayers wil come under tax net by the end of this fiscal year. It also believes that the program will raise the incidence of tax compliance.

Saturday, August 22, 2009

Supply pressure pulls Nepse down

The secondary market added a supply of 12.389 million-unit of shares this week as four financial institutions -- Biratlaxmi Bikas Bank, United Finance, Sanima Bikas Bank and Standard Finance -- have listed their bonus and rights shares for trading.
Over-supply of shares and low investor confidence have been pulling Nepse down over the recent weeks. This week too, Nespe dropped by 7.38 points to 709.82 points from Sunday morning's opening of 717.20 points.
The 78-scrip sensitive index -- considered blue chip shares - also lost a marginal 1.93 points to drop to 190.37 points from Sunday's opening of 192.30 points. Similarly, the float index -- calculated on the basis of real transactions -- lost by a mere 0.79 point to drop to 68.58 points from Sunday's opening of 69.37 points.
The transaction amount for this week increased by 63.50 per cent to Rs 636.5 million from last week's 389.3 million. The Group-A companies contribution to the total transactions also increased to 67.13 per cent from last week's 57.62 per cent.
Except others' sub-group -- hydropower, development banks, insurance and commercial bank's sub-groups -- all the major market propellers lost this week. The hydropower companies sub-group lost a whopping 78.19 points and plunged to 877.62 points from Sunday morning's opening of 955.81 points.
The development banks sub-group also lost 11.47 points to 720.76 points, commercial banks lost 7.52 points to 754.61 points and insurance sub-group lost 6.82 points to 641.81 points.
The manufacturing, trading and hotels sub-groups -- of the nine sub-groups -- did not see any transaction this week but others' sub-group gained 4.70 points to 663.81 points. The secondary market this week began in the green on the first day but it steadily dropped on the other four days -- over the five days trading. This week's top performer was Standard Chartered bank Nepal with transactions worth Rs 99.35 million, followed by Nabil Bank (with Rs 63.17 million), Bank of Kathmandu (with Rs 58.35 million), Kist Bank (with Rs 46.24 million) and Citizens' Bank International (with Rs 44.46 million).
In terms of number of shares traded, National Hydropower company topped the chart with 2,14,000-unit shares traded in the week whereas in terms of number of transactions Citizens' Bank International topped the chart with 886 transactions this week.

PM visits BSE
KATHMANDU: Prime Minister Madhav Kumar Nepal visited Bombay Stock Exchange (BSE) on Friday during his five-day visit to India. He observed how BSE operates and tried to understand the secondary market operations. However, whether his gesture will have any effect in boosting the confidence of investors here is yet to be seen as the domestic secondary market is not performing at its best lately.

Commercial banks help boost remittance

The active involvement of commercial banks in the remittance business, growing number of remittance agencies and fluctuation in the rate of dollar vis-a-vis Nepali rupee have contributed to an encouraging inflow of remittance this fiscal year.
"Commercial banks have come aggressively into the remittance business over the recent months," said Pradeep Bhattarai, assistance director at the Foreign Exchange (Forex) Department of Nepal Rastra Bank (NRB).
Unlike the remittance agencies, they do not need separate licence for remittance business. "In the past, however, they were not much involved in it," he said adding that the increasing number of remittance agencies has also helped increase the remittance as they have helped channelise remittance through banking channels. Despite the global financial crisis, remittance by the end of the eleventh month of the fiscal year 2008-09 touched Rs 188.88 billion.
Earlier, Nepalis used to send money back home through illegal and non-banking channels but the entry of new remittance agencies has encouraged Nepalis in 76 countries around the world to send home money through banking channels.According to the second Nepal Labour Force Survey (2008-09), Nepal received the largest portions of remittance of 21.3 per cent from Qatar and 19.2 per cent from Malaysia.
"The number of remittance agecnies has doubled to 48 in the fiscal year 2008-09 from a year earlier," said Bhattarai. Most of these agencies are focusing on Gulf countries and Malaysia. "The fluctuation in dollar vis-a-vis Nepali rupee has also contributed to inflow of remittance," he added.
In 2007-08, the workers' remittances increased by 42.5 per cent -- in comparison to a year earlier -- to Rs 142.7 billion. In 2006-07, Nepal had received Rs 100 billion remittance.
According to the International Monetary Fund (IMF), remittance is the sum of workers' remittances, compensation to employees and migrants' transfers. "Every remitted dollar generates an additional three dollars in economic activity in the receiving country," according to economists. However, in Nepal remittance has been used in unproductive sectors and is fuelling a price hike. Yet, it is the top contributor to foreign exchange earnings.
Remittance has increased household investment in education, entrepreneurship and health also. According to the second Nepal Labour Force Survey, every household received Rs 65,755 in 2008. More than one quarter -- 30 per cent -- of the total population has gone abroad for work.
According to the Department of Labour and Employment Promotion, the number of workers going abroad for employment increased by almost 13 per cent in 2007-08 in comparison to 2006 and in the year 2008-09, the number touched 2,19,965.

Remittance inflow in the fiscal year 2008-09
First month (mid-August) -- Rs 13.41 billion
Second month (mid-September) -- Rs 31.88 billion
Third month (mid-October) -- Rs 50.31 billion
Fourth month (mid-November) -- Rs 63.45 billion
Fifth month (mid-December) -- Rs 78.54 billion
Sixth month (mid-January) -- Rs 94.60 billion
Seventh month (mid-February) -- Rs 109.40 billion
Eighth month (mid-March) -- Rs 131.00 billion
Nineth month (mid-April) -- Rs 150.42 billion
Tenth month (mid-May) -- Rs 169.17 billion
Eleven month (mid-June) -- Rs 188.88 billion
(Source: Nepal Rastra Bank)

Friday, August 21, 2009

World Bank pumps in millions for energy, agriculture sectors

The government of Nepal and the World Bank signed two agreements here today, amounting to $109.2 million to boost the nation’s development, especially in energy and agriculture sectors.
Finance Secretary Rameshore Khanal and World Bank Country Director for Nepal Susan Goldmark inked the agreement, which will provide $89.2 million in addition to aid package for the Power Development Project that will help implement the Energy Crisis Management Action Plan. Another, $20 million has been allocated for the implementation of the Project for Agriculture Commercialisation and Trade (PACT).
Nepal is in the midst of an unprecedented energy crisis that has had a cascading impact on all aspects of the economy. The nation has declared a “national energy crisis” in light of last winter’s acute shortfall of power.
"It is clear that chronic power shortages will continue to be a defining feature of life in Nepal for several years to come. The World Bank is stepping up its assistance to help Nepal minimise economic impacts and hardships in the short-term as well as to implement medium to long-term development plans," said Goldmark. "In the absence of a concerted scale-up of both grid-supplied and off-grid power, Nepal will continue to be burdened by a heavy reliance on costly, and often polluting, alternative means for meeting the demand for electricity,” she explained.
The additional financing will include investments in rehabilitation of the Kali Gandaki 'A' Hydro Electric Plant (HEP) — the biggest in the country — as well as two existing thermal plants in Duhabi and Hetauda. It will also finance construction of the 220KV Bharatpur-Bardaghat transmission line, strengthen the old and severely overloaded distribution network in the Kathmandu Valley and expand the government's off-grid micro-hydro rural electrification programme. These investments are intended to strengthen the nation’s power system by increasing energy production through reduction of down-time at the Kali Gandaki 'A' HEP and make available an estimated 22 MW in the existing thermal plants
The PACT aims to improve the competitiveness of small-hold farmers and agri-businesses in 25 districts. Agriculture, which is predominantly subsistence, contributes 38 per cent to Nepal's gross domestic product (GDP). In a globalised world, agriculture faces several challenges like market orientation, trade promotion and increased investment in the agricultural sector to shore up rural income.
"To harness opportunities in the global market, farmers and other stakeholders must produce and deliver the right commodities at the right time, while maintaining consistently high quality standards. To satisfy the requirements of trade partners and to ensure the competitiveness of Nepali products, food safety and animal health regulations and standards must be actively promoted," said Goldmark.
The PACT aims to help farmer groups and cooperatives engage in profitable market-oriented production and improve access to markets through technology and information services, critical public infrastructure and linkages to agri-business. It intends to create and strengthen industry-wide partnerships along the value chain, forging linkages between producers, traders, processors, and other stakeholders. At present, the World Bank is financing 16 projects in Nepal, whose cumulative worth is around $916 million.

NIDC Capital markets allotes Public Development Bank's primary shares

NIDC Capital Markets allotted the primary shares of Public Development Bank (PDB) today.Around 27,161 applicants -- including 60 employees of PDB -- got the 600,000-unit primary shares of the development bank.
PDB had received a total of 10,6679 applications seeking 1,70,28,440-unit shares. The bank floated its 60,000-unit Initial Public Offering (IPO) with Rs 100 face value per unit from June 28 to July 1. NIDC Capital Markets allotted it on the 50th day of the closing of the public issue.
According to the IPO Regulation, the primary issue must be allotted between a minimum of 40 days and a maximum of 70 days after closing of the issue -- depending on number of applications. PDB's shares were allotted within 50 days as it received 1,06,679 applicantions.
According to PDB managing director and chairman Kunj Bihari Kayal, it has posted Rs 1.11 million net profit during the fiscal year 2008-09.

Monday, August 17, 2009

Happy days are over, NOC stares at loss again

After a long spell of profit, the Nepal Oil Corporation (NOC) - the state oil monopoly - has again plunged into the red.
As per the new rates, which the NOC received today from its sole supplier Indian Oil Corporation (IOC), its losses will be around Rs 200 million monthly, said Mukunda Prasad Dhungel, spokesperson, NOC.
In July, NOC earned a profit of Rs 120 million. But, as per the rate on August 1, the organisation broke even since it was paying the outstanding debts and interests on loans, which were taken earlier.
The NOC's cumulative loss was around Rs 17 billion. Fortunately, it managed to whittle down the outstanding amount to Rs 10.80 billion, thanks to falling international crude prices.
But, the northward movement of global oil prices has forced the IOC to increase the fuel prices. "The new buying rate for diesel at Raxual Depot is Rs 43.98 per litre, up from Rs 41.02. While, petrol is at Rs 43.18 per litre, up from Rs 39.16," he said.
The retail price is fixed after adding 13 per cent VAT, transportation cost, road maintenance tax, customs, pollution tax and the dealers' commission.
"The current retail prices of petrol - at Rs 77.50 per litre - and diesel - Rs 55 per litre - has to be revised. Else, the NOC will have to bear the loss," Dhungel added.
The NOC started making profit when the downward revision of prices started in October, 2008, which continued till March.
Every month - on 16th as per the Roman calendar - the NOC receives a new price list for petrol, diesel from the IOC.
However, on the first of every month, it receives the new price list for petrol, diesel, kerosene, Air turbine Fuel (ATF) and cooking gas.

Importing depots, refinary
For Eastern Region -- Barauni Refinery
For Central Region -- Raxual Depot
For Western Region -- Betalpur Depot, Mugalsari Terminal
For Mid Western Region -- Allahabad Ternimal, Gonda Depot
For Far Western Region -- Banthara Depot

NPDA-Labour talks on Tuesday
KATHMANDU: The ongoing dispute between the Nepal Petroleum Labourers' Union and the Nepal Petroleum Dealers' Association (NPDA) has hit the supply of petroleum products across the nation. In the capital, fuel is available only at petrol pumps run by the Nepali Army, Nepal Police and Sajha for the last two days. On Sunday, though talks between the two warring sides failed, there will be another round of dialogue on Tuesday. The labour union is demanding minimum monthly salary of rs 6,000, uniform and other benefits.

Sunday, August 16, 2009

Price curve offer no relief

July saw a rise in the prices of most of the staple food commodities.
"In comparison to prices in June, the price of rice increased on an average by three per cent, black gram by seven per cent, lentils by two per cent and the wheat by one per cent, respectively," said a report jointly produced by World Food Programme (WFP), Food Security Monitoring and Analysis System, Ministry of Agriculture and Cooperatives (MoAC), Department of Agriculture, Agribusiness Promotion and Marketing Development Directorate, Federation of Nepalese Chambers of Commerce and Industries( FNCCI) and Consumer Interest Protection Forum (CIPF).
Supply constraints have pushed up the prices of vegetables and fruits. The average price of potatoes in Nepal is more than double last year's price. The price of cabbage is nearly five times higher than a year ago due to landslides and damage to roads, trails and supply disruption -- particularly in hill and mountain districts.
"The supply of fresh fruits and vegetables has decreased significantly," the report revealed. In the Kalimati Fruit and Vegetable Market in Kathmandu, the average daily supply of vegetables, fruits and spices has reportedly decreased by almost half compared to last year -- down by around 300 tonnes a day due to poor harvest because of drought, according to the report of July.
The government, though it had promised to take measures to improve food supply to contain the price hike, has failed to crack the whip on the price hike due to rise in hoarding and curtailing.
However, oil prices came down in July in comparison to June. "After touching a peak -- at the end of 2008 -- the price of cooking oil has gradually decreased. As compared to June, mustard oil is down by three per cent and soybean oil is down by four per cent," said the report.
The price of chicken -- in major consumer markets -- also fell by around three per cent in June. But, in August it is expected to increase due to a recent announcement of price increases (by five rupees for live chickens and by seven rupees per processed) by poultry entrepreneurs in Kathmandu.
According to Nepal Rastra Bank's (NRB) macro-economic data of the 11th month (mid-June), the price hike has come down to 12.3 per cent from 12.9 per cent in the 10th month (by mid-May ) of the fiscal year 2008-09.

Drought hits rice in Chitwan
CHITWAN: This year, over 20 cultivable rice fields are barren in Chitwan following prolonged drought. Farmers transplanted the rice seedlings only after mid-Shrawan. They were forced to transplant 40 days old rice seedlings. Generally, 25 days old rice seedlings are good for plantation. This year, the district will see a drastic fall in rice production as over 20 per cent of the arable land, mostly in the western belt, has been left barren due to the long drought, said the District Agricultural Development Office. It is said that rice production will go down by 30 per cent in the district this year compared to last year. The district that has 46,894 hectares of cultivable land witnessed 94,896 metric tonnes of rice production last year. Rice farming will be in crisis if any alternative is not sought keeping in mind this year's drought, said crop development officer Mahesh Regmi

Price hike inthe fiscal year 2008-09
First Month (mid August) -- 13.1 per cent
Second Month (mid September) -- 13.5 per cent
Third Month (mid October) -- 14.1 per cent
Fourth Month (mid November) -- 14.5 per cent
Fifth Month (mid December) -- 14.1 per cent
Sixth Month (mid January) -- 14.4 per cent
Seventh Month (mid February) -- 13.7 per cent
Eighth Month (mid March) -- 13.1 per cent
Nineth Month (mid April) -- 11.9 per cent
Tenth Month (mid May) -- 12.9 per cent
Eleven Month (mid June) -- 12.3 per cent
(Source: Nepal Rastra Bank)

Saturday, August 15, 2009

Banking group pushes Nepse up

Standard Chartered Bank Nepal, Bank of Kathmandu (BoK), Citizens' International Bank and Nepal Investment Bank gained this week.
Standard Chartered Bank Nepal gained Rs 542 to Rs 5,967 per share and Nabil Bank gained Rs 443 to Rs 4,878 per share in a single day -- on Wednesday -- pushing the banking index up. The information of the 253rd meeting of the board of Standard Chartered Bank Nepal -- held on August 12 -- that has proposed Rs 50 per share cash dividend and 2:1 bonus shares -- subject to the approval from Nepal Rastra Bank and bank's AGM -- rebounded the secondary market.
Nepse also gained 17.19 points to close at 717.2 points on Wednesday -- the last day of trading for this week as Thursday was a public holiday -- from Sunday morning's opening of 700.01 points.
Though the transaction amount this week plunged by 47.82 per cent to Rs 389.3 million from last week's Rs 263.3 million the contribution of Group-A companies -- blue-chip shares -- went slightly up by 47.82 per cent as against last week's 44.29 per cent. The 78-scrip sensitive index also gained 7.33 points to 192.30 from Sunday morning's opening of 184.97 points. Similarly, the float index -- calculated on the basis of real transactions - rose by 2.15 points to close at 69.37 points.
This week, Standard Chartered Bank Nepal (with Rs 38.49 million) topped the chart in terms trading amount followed by Bank of Kathmandu (with Rs 34.09 million), Citizens' Bank Investment (with Rs 25.57 million), Nepal Investment Bank (with Rs 24.46 million) and Butwal Power Company (with Rs 23.48 million).
Similarly, in terms of share units traded National Hydropower Company topped the chart with 1,76,000-unit of shares being traded. In terms of number of transactions, Bank of Asia topped the chart with 392 transactions.
The market this week gained on only one day on Tuesday as the other three days Nepse continuously lost due to present uncertainty and nervousness of investors.
The commercial banks, hydropower, finance companies, insurance companies and manufacturing sub-groups gained this week whereas others and development banks sub-group could not perform better and hotels and trading sub-group did not see any trading this week.

NMB allotes Arun Valley IPO
KATHMANDU: NMB Bank Ltd allotted primary shares of Arun Valley Hydropower Development Coompany on Friday. The Hydrpower company -- that has issued the primary shares adding premium of Rs 84 at a face price of Rs 100 per unit -- had floated its 5,15,000-unit shares at Rs 184 per unit from June 23 to June 26. It has received a total of 1,10,737 valid applications but only 27,502 applicants got the shares. Arun Valley became the first company to float the shares adding premium though Chilime Hydropower is the first to recveive approval to add premium.

What is Bull Market
KATHMANDU: A prolonged period in which investment prices rise faster than their historical average. Bull markets can happen as a result of an economic recovery, an economic boom, or investor psychology. The longest and most famous bull market is the one that began in the early 1990s in which the US equity markets grew at their fastest pace ever. opposite of bear market.

Friday, August 14, 2009

Nepal, India trade treaty review

India has agreed to add five customs points to the existing 22 on the Nepal-India border making it to a total of 27 customs points.
Disclosing this, Minister for Commerce and Supplies Rajendra Mahato said that India had also agreed to renew the Indo-Nepal Trade Treaty every seven years instead of five years. The treaty is renewed autometically every five years, if both the sides have no amendments to make.
Mahato said India had also agreed to list more exportable items like flowers and herbal products. “A long-standing issue of quarantine has also been made easier,” he said. “Now Nepali exporters do not need to send their products to Kolkata for quarantine test. India will now accept the laboratory tests conducted in Nepal. “India is helping upgrade the labs in Nepal,” Mahato said.
Prime Minister Madhav Kumar Nepal, during his Indian visit next week, will signing trade treaty with some amendments — most of which were proposed by Nepal, though some of the issues India did not agree to review.
“Nepal presented four proposals to control illegal trade between the two South Asian neighbours. India has accepted three of the proposals,” he said. “Nepal can export goods imported from India to a third country,” the minister said, adding that Nepal can also import third country goods from India as well. “But Nepal cannot export goods imported from third country to India,” he added.
The two countries have also agreed on the definition of Nepali goods, Mahato added. “Anything produced within a periphery of 200 miles of the sea will be considered Nepali and can be exported to India,” according to the reviewed agreement. Earlier a goods with 30 per cent value added in Nepal was only defined as Nepali goods.
Among other major agreements, India cannot impose anti-dumping duty on Nepali goods, quota system will be abolished and Commerce Department will prepare manual for trade simplification.
Entrepreneurs have asked the Prime Minister to push for the elimination of dual tax imposed on Nepali exports by the Indian government. The bilateral trade treaty allows duty-free market access for manufacturing goods.
India is Nepal’s major trading partner with over 60 per cent trade, as such Nepal must maintain consistency in its trade policy with India. However, the trade deficit with India has crossed Rs 107 billion due to Nepal’s inability to boost exports to India.

Sebon won't allow ghost companies

Securities Board of Nepal (Sebon) is preparing to bar the directors of previous companies, which opened and suddenly vanished, from registering new companies.
"There are many companies that issued shares and vanished into thin air," said Sebon chairman Dr Surbir Poudel talking to the newly elected committee of Society of Economic Journalists Nepal (Sejon) here today.
"To discourage the practice, we are planning to bar the directors in order to prevent fraudulent companies," he said adding that Sebon wants to save investors from getting cheated.
The board has also prepared a disclosure reporting format for companies other than banks and financial institutions as the latter two groups are more transparent due to their regulator Nepal Rastra Bank's effective monitoring.
"Except banks and financial institutions, other companies are not transparent and have no proper disclosure system," he said citing the reason for low investor attraction in the real sector companies that have less than 15 per cent presence in the secondary market.
Manpower crunch and lack of teeth has hit the board, he opined. "As a regulator of the capital market, the board must have teeth -- more regulations and capable manpower," he said admitting Sebon's weakness in not being able to take action against companies that do not follow its directives.
However, the board is not sitting idle. This Monday, it wrote a letter to Taragaun that manages the Hyatt Regency hotel seeking an explanation why it has not paid back the money of the preferential shares to shareholders. Taragaun has neither returned the money nor given the interest to the investors. "After the investors complained to Sebon, the regulatory authority sought an explanation within seven days," he added.
The board is soon bringing Portfolio Management Directives -- to manage the market more effectively. It has more on its plate too, like Mutual fund Act, 10-year Master Plan for long-term development of the capital market and Central Depository System (CDS).
"Most probably Prime Minister Madhav Kumar Nepal during his trip to India next week will visit the CDS company and stock exchange there," he said adding that the government has started taking the capital market seriously.

Thursday, August 13, 2009

Nepal Airlines to add aircraft in its domestic fleet

Ailing Nepal Airlines Corporation plans to add new aircraft to its domestic fleet soon.
“NAC is planning to add two new aircraft with a capacity of 50 to 70 seats on trunk routes like Pokhara-Kathmandu,” Sugat Ratna Kansakar, NAC executive chairman, said.
“A technical committee will be formed to prepare specifications of the aircraft,” he said, adding that the board will evaluate the report before purchasing new aircraft for the domestic fleet. “Some of the local banks are keen to finance the aircraft,” he added.
If economically feasible, NAC is also eyeing 10 to 20-seater aircraft to operate in small airports. “Smaller aircraft will suit small domestic airports. We can increase the frequency of flights,” Kansakar added.
NAC is operating only four of the seven DHC-6-Twin Otter aircraft with 19-seat capacity on domestic routes. “We’ll make that five in a month,” Kansakar said, adding that the decision on operating two others will be taken soon. “The board will decide whether to sell the two or operate them,” added the executive chairman, who got the executive powers after Supreme Court decided yesterday not to issue a stay order restraining him from exercising executive powers.
Managing Director Captain Kul Bahadur Limbu has moved the SC seeking a stay order against the appointment of Kansakar as executive chairman. The government appointed Kansakar as executive chairman on July 26. When Kansakar was NAC Managing Director in January, he had planned to add six aircraft to NAC’s international fleet. If everything goes as planned, NAC will have a new aircraft by the first half of 2010 for the international route. In next five years, NAC will have a fleet of six new aircraft.
NAC is operating two B-757 Boeing 757-200 aircraft — Karnali and Gandaki that have 190-seat capacity each — on the international routes. Erstwhile Royal Nepal Airlines Corporation had bought two Boeing 757: Karnali on lease in 1987 and Gandaki in 1988.
The government-owned airlines company may be able to add one narrow-body aircraft soon and a wide-body aircraft by October 2010. After people’s movement in 1990, successive governments of the Nepali Congress and the CPN-UML had leased the aircraft from Lauda Airlines and China South Western Airlines, with a fair share of controversy.
NAC incurred an operating loss of around Rs 50 million in the last fiscal year due to unavailability of one of the aircraft and rising fuel prices. The new aircraft can give NAC a new lease of life.

Wednesday, August 12, 2009

Former King Gyanendra willing to pay tax

Constitutionally above the law and exempt from all taxes till a couple of years ago, former king Gyanendra Shah is willing to pay tax.
"Former king Gyanendra Shah has inquired with us about tax payment," said Finance Minister Surendra Pandey here today. "The deposed king is ready to pay income and property tax, telephone and electricity bills as a commoner," he said adding that he has not asked for any discount.
Officials at the ministry, however, said that the former king has to pay the property tax to the Metropolitan office and his telephone and electricity bills to Nepal Telecom (NT) and Nepal Electricity Authority (NEA).
"Gyanendra Shah is willing to pay power bills and water tariff, and the property tax on his personal residence Nirmal Niwas where he lived as prince till June 2001; on Jeewan Kunj that belonged to his brother Dhirendra, and Shobha Kunj -- the residence of his sister Shobha. He wants to pay tax from 2006 when he surrendered his royal powers and the parliament abolished the monarchy," Pandey added. "It is a positive development."
Pandey also said that the government might make some special arrangements for the former king if he is willing to pay all the taxes that he owes the government.
"Two weeks ago, one person came with a file that had some details of propery, phones that the former royals had and have and also of water bills," an official at the ministry said adding that they asked him to came with power of attorney.
The file showed that the deposed royal has 24 telephone lines -- some used by others currently -- five each at his daughter Prerana's residence and his private residence Nirmal Niwas, three each in Sitashma, Dilasha and Shobha's residence and seven water-line connectivity, according to the file submitted to the finance ministry.
"However, there was confusion about the time period the former king needed to pay the tax," the oficial said. "As requested by him he will have to pay tax only after he became a commoner some three years ago."
Nepal was declared the youngest republic in 2006 and Gyanendra Shah was stripped of the powers that the Shah dynasty had been exercising since 235 years.
Earlier, Gyanendra Shas' brpther Dhirendra's daughters -- Sitashma and Dilasha -- paid Rs 45 million as tax after a brief confusion over the period from when they need to pay tax. The Income Tax Act-2049 has exempted only the king from tax but not a single royal family member has paid tax. "Sitashma and Dilasha also claimed that they were above the law," the official said adding that the Act has not exempted them. "So, they finally paid they tax according to the Act."

Banks to keep track of customers

The central bank has asked banks and financial institutions to have records of their clients under Know Your Customer.
The directives issued for the first time by the financial information unit (FIU) under Nepal Rastra Bank (NRB) also asked banks and financial institutions to inform the unit of suspicious transactions.
The central bank, the regulator of the financial market, has directed customers to provide detailed information to their banks and financial institutions. "Banks and financial institutions also have to notify about transactions that are over the limit," NRB said in a bid to check the money laundering that poses a serious threat to the country's financial stability.
NRB brought Anti Money Laundering Regulation-2066 on August 17, 2008. "Banks and financial institutions should maintain records of their customers with clear details," said FIU-NRB.
Licenced banks and financial institutions should implement the directive by preparing internal regulations, it said. Under the Act, banks and financial institutions or people involved in money laundering can be penalised.
"Financial institutions violating the Anti Money Laundering Act-2008 will be penalised according to the Act," the central bank directive said.

Ban revoked
KATHMANDU: Nepal Rastra Bank (NRB) revoked the ban imposed on United Bikas Bank (UBB) in deposit collection and lending after its satisfactory performance. According to NRB, it had banned the bank from collecting deposits and lending on November 18, 2006 under NRB Act section 86 (b). "New investors injected capital into the bank, bringing the capital fund of the bank up to the minimum requirement," the central bank said.

Government banks no sitting ducks, warns Finance Minister Surendra Pandey

Government banks are regarded as agencies whose loans need not be repaid, said Finance Minister Surendra Pandey here today.
"These institutions are easy targets for defaulters as they think that they can use their political connections to default on loans," he said while talking to newly-elected memebers of the Society of Economic Journalists Nepal (Sejon) at his office in Singha Durbar.
Pandey also blamed the private sector for the failure of Nepal Bank Ltd (NBL) and Rastriya Banijya Bank (RBB). These two banks are making progress under the financial sector reform programme, though they still have negative networth.
"The government cannot inject capital into NBL. There is a 40 per cent government stake in it. RBB, a completely government bank, has to be provided options to bring its negative capital to positive. Both have to be made strong, professional banks," Pandey said, remaining cautious on the issue of privatisation of these two big banks.
According to Pandey, there are three options: Inject capital -- which the government is not willing to do, or divest the equities of NBL and government-owned RBB to private parties through a competitive bidding process, albeit gradually or by issuing bonds. "The committee to look after the continuation of financial sector reform process is looking into it seriously and soon there will be some solution," he asured.
The committee has the finance minister, Nepal Rastra Bank (NRB) governor, vice-chairmanof the National Planning Commission (NPC) and finance secretary.
Talking about his ambitious revenue target in the budget for the fiscal year 2009-10, Pandey said that the revenue target though described as ambitious is achievable. "Collection till date is satisfactory and we can meet the target," he added. The government has targeted to collect Rs 176 billion revenue within this fiscal year.Pandey also assured that development activities would go ahead smoothly. "Unlike last fiscal year, the government will spend on development activities," he said adding that the targetted big projects like Upper Seti, Sikta project and Fast Track road will start soon.
He has earmarked Rs 106 billion for development expenses. "If the ministries cannot spend their budget, they wil be allocated less budget next year," he said expressing his commitment to allocate the budget to ministries on the basis of progress and end the culture of releasing and transferring budget at the end of the fiscal year.

FNCCI to attract Chinese investment

Nepal and China's Yunnan province are exploring opportunities in expanding trade relations, tourism, agriculture, water and energy sectors.During a meeting of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) officials and Li Jiming Deputy Director General, Department of Commerce and Yunnan Province, the two sides discussed various possibilities of investment in Nepal.
"We are keen on welcoming Yunnan's investment in Nepal," said FNCCI president Kush Kumar Joshi. "Nepal can gain from Yunnan's expertise in the private sector," he said urging for joint ventures between Chinese and Nepali investors.
"Yunnan has developed five key sectors -- tobacco, tourism, energy, mines and bio-technology," Jiming said adding that Yunnan can join hands with Nepal in tourism, development of energy sector and industries related to mines and agriculture. Jiming also sought Nepal's participation in the International Trade Fair in Kungming city in 2010. He said mutual investment by the two countries will help decrease trade deficit and create opportunities for economic and trade development.
Commerce and Supply Ministry secretary Purushottam Ojha said on the occasion that Nepal has submitted a list to China of exportable items for preferential treatment.
FNCCI senior vice-president Suraj Vaidya presented a paper on "Potentials of Trade and Business in Nepal. According to FNCCI statistics, Nepal has an annual trade deficit of Rs 21.5 billion with China.

Tuesday, August 11, 2009

ADB signs trade financing agreement with domestic banks

The Asian Development Bank (ADB) today signed trade financing agreements with eight banks in Nepal. The agreements are aimed at promoting international trade in the landlocked South Asian nation and helping Nepali banks forge alliances with banks overseas.
ADB signed the agreements in the Nepali capital with Bank of Kathmandu Ltd, Everest Bank Ltd, Himalayan Bank Ltd, Kumari Bank Ltd, Nabil Bank Ltd, Nepal SBI Bank Ltd, Nepal Industrial & Commercial Bank Ltd and Nepal Investment Bank Ltd. They are ADB's first such agreements with Nepali banks.
"Boosting trade is critical to helping Nepal overcome the current global crisis that has hurt exports and may slow the growth in remittances this year and in 2010. In the longer run, increased trade should also lead to crucial job creation and reduced poverty," said Barry Hitchcock, ADB's Country Director for Nepal.
The agreements are part of ADB's Trade Finance Facilitation Program (TFFP). The program, expanded to $1 billion in March, provides guarantees and loans of up to three years to support trade transactions in its developing member countries.
Exporters and importers in the less-developed parts of Asia have struggled for some time to obtain trade finance because of broad risk aversion but this became even more difficult following the onset of the global economic crisis as large international banks refrained from offering such financing in favor of building up their capital base.
Trade is widely acknowledged as a key tool for economic growth and poverty reduction but the TFFP also helps support the banking sector in ADB's developing member countries.
"We are very pleased to extend the reach of the program to Nepali banks which should benefit from increased partnerships with international banks," said Philip Erquiaga, Director General of ADB's Private Sector Operations Department, which oversees the TFFP. "Such relationships can result in expanded trade finance links and facilitate knowledge and technology transfer."
The Trade Finance Facilitation Program (TFFP) is the first region-wide program undertaken by the ADB aimed to help banks in developing member countries (DMCs) provide trade finance products to importers and exporters. The TFFP helps Asian countries maintain, re-establish and enhance trade finance lines. The TFFP:
provides guarantees to confirming banks and revolving credits to issuing banks located in DMCs
enhances banks' abilities to offer importers and exporters access to financial services
works in partnership with the private sector to provide capacity, liquidity and stability to the trade finance system
The TFFP has two main products:
Credit Guarantee (CG) ProductADB provides guarantees to participating regional and international banks (Confirming Banks) against the payment of trade credits issued by approved Issuing Banks.

How the CG works
Revolving Credit (RCF) ProductADB provides loans to Issuing Banks for on-lending to private sector exporters and importers, many of which are small and medium-sized enterprises (SMEs), to finance trade-related transactions.

Monday, August 10, 2009

Two groups bid to revive sick Nepal Development Bank

Two groups have submitted proposals to investigation officer Tirtha Raj Upadhayay to revive troubled Nepal Development Bank (NDB).
Nimbus Group of Jagdish Agrawal alongwith World Link, ICTC Group, Golchha Group, Kailash Chandra Goyal, Ravi Singh Group, Guna Chandra Bista and others have submitted one proposal while Badri Bhattarai, current promoter of NDB, and his group have submitted another proposal.
"After investigation, we found that NDB has Rs 90 million cash but the deposits of the public -- except organisations -- come to around Rs 350 million," said Upadhyaya whom Patan Appellate Court on July 29 appointed the investigation officer to report and start the insolvency process.
The Court has ordered that small depositors be paid first. "If Rs 90 million is distributed among the public depositors, they will one get just one-fourth of their real deposit," he said adding that the definition of small depositors was also unclear.
"Revival of the troubled bank might be the best option," he said adding that he has called both the groups to discuss their detailed capital plan. "After meeting both the groups and discussing their proposals in detail, if I am convinced I will advise the court to revive the bank," the senior Chartered Accountant by profession Upadhayay added.
Nimbus Group and its associates are ready to deposit Rs 32 million as and when Nepal Rastra Bank (NRB) asks and also to prepare a capital plan within three months. "We are planning to inject Rs 320 million after detailed study," said Sudarshan Raj Pandey, a representative of the Nimbus Group that also plans to buy out the promoters who are responsible for damaging the bank. "We will buy the shares of the promoters responsible for damage to the bank at one rupee per share and buy them out," he said adding that after that they plan to issue rights shares to increase the capital to Rs 640 million by the end of 2010.
If the rights shares are not sold completely, we will buy them," Pandey said assuring the depositors that if they want to take their deposit back after Nimbus starts running the bank, they will be allowed to do so.
The other group led by Badri Bhattarai has claimed that it is ready to inject Rs 640 million but has not elaborated its plan.
Meanwhile, the Supreme Court has declined to issue a stay order as demanded by the Employees' Provident Fund (EPF) to protect its deposit in the process of liquidating NDB.Directing to return the deposit of the small depositors first, Patan Appellate Court had okayed the liquidation of NDB. The court has directed to start the process of liquidation as per the Insolvency Act 2007.

Sunday, August 9, 2009

Nepse drop fuels share sale spree

The selling pressure of commercial banks that pulled the Nepal Stock Exchange (Nepse) down by 6.37 points to 693.64 points from today morning's opening of 700.01 points has sent investors into a frenzy.
"Investors are nervous and selling like anything," said Rabindra Pradhan, stock broker No 32. "Shares of Standard Chartered Bank Nepal, Nabil Bank and Himalayan Bank, which used to be hot potatoes are no more attracting investors," he said adding that investors are on a selling spree due to low confidence and uncertainty. Commercial banks like Standard Chartered bank Nepal lost Rs 140 and Everest Bank lost Rs 46 per share today pulling the banking index down by eight points to 720.26 points. Banks and financial companies have over 85 per cent stake in the Nepse.
Secondary market pundits were of the opinion that after the budget Nepse would bounce back. However, the secondary market is not showing any sign of recovery and is instead sliding down everyday. "The reduction of capital gain tax by five per cent to put it at 10 per cent could not inject any confidence in the secondary market," Pradhan added.
The year on year (y-o-y) Nepse index decreased by 27.1 per cent to 678.74 points in mid-June 2009. This index was 930.65 a year ago. Likewise, the sensitive index -- based on July 2006 -- stood at 182.32 points in Mid-June 2009. It was 243.48 in mid-June 2008, according to the central bank data.
The float index -- calculated on the basis of final transaction as on August 24, 2008 at market price -- remained at 65.56 points in Mid-June 2009. However, market capitalisation increased by 39 per cent to Rs 451.17 billion in mid-June 2009. Total paid-up capital of listed companies stood at Rs 59.32 billion in the review period, increasing by 122.9 per cent over the same period last year.
Of the total Nepse listed securities worth Rs 33.56 billion up to mid-June 2009, bonus shares, right shares, ordinary shares and bonds accounted for Rs 1.9 billion, Rs 9.3 billion, Rs 19.1 billion and Rs 3.3 billion, respectively.
More than the fundamentals of the company or the promoters and chief executive officers, it is the bonus shares and rights shares that are the major attractions for investors when they invest in any company.
Ordinary shares constituted the largest portion due to Nepal Telecom's shares. The monthly turnover to market capitalisation ratio remained at 0.48 per cent in mid-June 2009, compared to 0.60 per cent a year ago. Total number of companies listed at the Nepse also increased to 159 this mid-June in comparison to 148 a year ago. Among them, 128 are banks and financial institutions -- including insurance companies, said the central bank.
The tradaing amount has however, increased to Rs 21.68 billion in the fiscal year 2008-09 from Rs 0.57 billion in the fiscal year 2002-03. In 2003-04, it was Rs 2.14 billion and in 2004-05, it doubled to Rs 4.50 billion but decreased to Rs 3.45 billion in 2005-06. In 2006-07, the trading amount increased to over double to Rs 8.36 billion and in 2007-08, it nearly tribled to Rs 22.82 billion. However, in 2008-09, trading amount decreased to Rs 21.68 billion only.

Nepali workers cheated, claims minister

Labour and Transport Management Minister Mohammed Aftab Alam today claimed that there is no demand for Nepali labourers in Poland and Ukraine.
"Due to the global economic crisis there is no demand for Nepali labourers in Poland," Alam said adding that Nepal is still investigating the labour demand from Ukraine as the companies that had asked for Nepali labourers are reportedly closed.
According to him, a number of Nepali youths migrate as labourers to foreign lands for employment opportunities. "But due to irregularities they are cheated and exploited," he adding that the ministry is investigating the demands of foreign employment agencies.
In the fiscal year 2008-09, a total of 2,19,965 Nepali migrant workers -- including 2,801 for South Korea under EPS -- left for various labour destinations. However, the number of migrant workers declined after the major labour receiving destination countries were hit by global financial crisis last September. In the first quarter -- till August-September -- of the last fiscal year the number of outbound labourers was encouraging but it slowed down in the second quarter and the demand dropped further in the third quarter.
However, Gulf countries -- especially Qatar and Saudi Arabia -- were in the top two positions on hiring Nepali blue-collar jobseekers in the last fiscal year. According to Department of Foreign Employment (DoFE) data, Qatar and Saudi Arabia hired 57.52 per cent of the total Nepali migrant workers abroad.
Qatar and Saudi Arabia respectively hired 76,175 and 48,749 Nepalis last year. Other popular destinations are Malaysia that hired 35,070, the UAE that hired 31,688 and Bahrain that hired 6,360 Nepali blue-colour job seekers. The top five destination countries have covered 91.19 per cent of the 1,98,042 Nepali migrant workers.
Sensing the drop in the demand since September, the government has started exploring new labour destinations like Poland and Cuba. "The ministry has been trying to expand the Nepali labourers' market," Alam claimed. However, not a single Nepali blue-colour job-seeker has left for any new destination so far.

Industrial trainees in Japan
KATHMANDU: Six Nepali Industrial trainees have successfully completed the Japanese Language and Culture training at Toyoma, Japan. They were felicitated on their return to Nepal. They left for Japan on May 17. Toyoma City managing director Enada expressed his pleasure at the participation of Nepali trainees in the programme and hoped for better utilisation of the training. Meanwhile, Kumiaya Company also expressed a wish to accept Nepali trainees among the 1,500 trainees that they receive from across the world.

Banks still in fragile zone: Governor Bhattarai

Domestic banks and financial institutions are not out of risk and are still vulnerable, opined Nepal Rastra Bank (NRB) governor Bijayanath Bhattarai.
"The central bank might add more disclosure requirements," he said talking to the newly elected committee of Society of Economic Journalists Nepal (Sejon) here today. Banks should be operated by prudent norms and should not merely wait for NRB directives, he opined adding that the capital base of banks should be sound. "Few but strong banks is the need of the hour rather than numerous and weak banks that have negative networth and poor Capital Adequacy Ratio (CAR)".
"If banks and financial institutions are not run according to prudent norms, the central bank will take action against them to safeguard depositors' money," Bhattarai, who joined the office after two years, said. "The central bank wil take punitive measures if they do not obey directives and reform themselves."
Since the money in banks and financial institutions is that of the depositors, they should be shielded. After the Nepal Development Bank (NDB) fiasco, the government has brought the deposite insurance programme. "Though there is no full-proof regulatory norm to save banks from failing, deposite insurance can save small depositors," Bhattarai said adding that the financial sector reform programme that has slowed down in the recvent years will also be expedited.

NBL to get professional team
KATHMANDU: Nepal Rastra Bank (NRB) governor Bijayanath Bhattarai said Nepal Bank Ltd (NBL) -- the oldest bank of Nepal -- will soon get a professional managerial team. NBL is being run by Dr Binod Atreya, who was sent from (NRB). There will be a conflict of interests if the central bank continues to run NBL. The central bank is the regulatory authority, and it has been running NBL for more than two years. A high level committee -- including finance minister, vice-chairman of National Planning Commission (NPC), finance secretary and governor -- has been formed to work out the details of NBL's and Rastriya Banijya Bank's (RBB) reforms and to look after the overall financial sector reform programme, Bhattarai said. NBL has 41 per cent government share and RBB is wholly a government undertaking. Though these banks have been successful in reducing Non Performing Assets (NPA) over the years, the government has to inject capital to bring these banks back in thegreen zone. NBL and RBB -- by the end of the fiscal year 2007-08 -- had 12.4 per cent and 21.7 per cent NPA respectively. They further reduced NPA to 8.6 per cent and 18 per cent respectively by April 13, 2009. "However, they still have negative capital fund," Bhattarai added.

Saturday, August 8, 2009

Price hike rigours has country groaning

Spiralling prices are breaking the fiscal backbone of people throughout the country. Outside Kathmandu Valley, it is the Dhangadhi people that are the worst hit -- facing an average of 21.37 per cent price hike, with rice at 10.5 per cent more, lentils at 45 per cent more, cooking oil at 20 per cent more and vegetables at 10 per cent more compared to July 2008. June-September is usually high pricing time in Nepal but this year's prices are at an all time-high.
According to Nepal Rastra Bank, regionwise the price rise was 14.5 per cent in Kathmandu valley followed by 11.5 per cent in both Tarai and the Hills in mid-June 2009.
Biratnagar, Janakpur, Birgunj, Naryangarh, Pokhara and Bhairanawa have not been spared either. Prices of rice, lentils and edible oils are skyrocketing in these towns. "We are not taking much profit," said Bishnu Prasad Sharma, a retailer at Bhairahawa, "Our profit is not more than 10 per cent." Retailers in other towns agreed that market intervention was a must to curb prices. "Stockists are the culprits," blamed Shankar Man Gurung, owner of Gurung Provisional Store at Chipledhunga, Pokhara, "Some stockists are manipulating the market." Pokhara is experiencing an all-time high price of vegetables -- cauliflower Rs 80/kg, tomato Rs/55 kg and green chilly Rs 90/kg. "I have never seen such high prices in my life," Lakshmi Bastola, 45, a housewife said.
In the towns bordering India, the lowest prices of food grains are seen in Birgunj, a major route of transit to India and abroad. Lentils are the highest priced consumer goods in the town with Rs 130 and Rs 100 for a kg of Rahar and Masuro pulses, respectively.
Interestingly, the price hike has not affected less consumed commodities. "Though the price of lentils has increased by 30-40 per cent the price of beans -- Kerau, Bodi, Bhatmas -- has not risen much," said Shyam Prasad Sah, president of Janakpur Chamber of Commerce.
Price of essentials goods like rice, lentils and cooking oils have become almost double in a year, from July 2008 to July 2009, throughout the country. However, the skyrocketing had begun since early this June. Consumers and retailers are blaming stockists for the price hike and are urging the government to intervene in the market.
Propelled by food and beverages, the year-on-year inflation as calculated by the consumer price index rose to 12.3 per cent in mid-June 2009 from 11 per cent in the same period of the previous year.
The review period's price of sugar and sugar-related products rose by 12 times to a whopping 62.3 per cent in comparison to an increase of 5.5 per cent in the same period the last fiscal year. The price indices of vegetables and fruits increased by 55.5 per cent in sharp contrast to last year's decline of 3.3 per cent.
Similarly, the price indices of meat, fish and eggs as well as pulses' sub-groups in the review period grew by 29.8 per cent and 27.7 per cent as compared to an increase of 12.6 per cent and 11.1 per cent in the same period last year. The subgroup of grains and cereal products also witnessed a price rise of 6.6 per cent compared to an increase of 21.2 per cent in the corresponding period of previous year.

Shareholders loose this week, too

Shareholders of hydropower companies, commercial banks, finance companies, trading firms, development banks and insurance companies lost this week, pulling Nepse down by 16 points to 700.01 points from its opening 716.01 points on Sunday.
However, investors might get temporary confidence and the shares of existing banks and financial institutions might flare due to Nepal Rastra Bank's new policy of putting a temporary halt to the issuance of licences to Group A, B and C banks and financial institutions. Nepse has over 85 per cent dominance of banks and financial institutions.
Hydropower companies, commercial banks and finance companies sub-groups lost heavily with their indices plunging by 29 points to 948.19 points from Sunday's opening of 977.19 points, 24.07 points to 728.26 points from Sunday's opening of 752.33 points and 14.16 points to 678.41 points from Sunday's opening of 692.57 points, respectively.
The trading sub-group also lost 8.57 points to dip to 281.78 points from the opening 290.35 points, whereas development banks sub-group lost 7.33 points to drop to 741.15 points from the opening 748.48 points. The insurance sub-group slid by 5.07 points to 646.24 points from the opening 651.31 points.
Of the nine sub-groups, two -- manufacturing and hotels -- did not see any trading this week but the others sub-group became the only gainer this week with a 1.17-point gain to rise to 670.86 points from Sunday's opening of 669.69 points.
The transaction amount also decreased by 44.29 per cent to Rs 263.38 million against last week's Rs 472.82 million.Of the total transactions, Group-A companies contributed 46.75 per cent. The 78-scrip sensitive index -- a barometer of Group-A companies -- lost 5.49 points to drop to 184.97 points from the opening 190.46 points. The float index -- calculated on the basis of real transactions -- also skidded down by 1.94 points to 67.22 points from the opening 69.16 points.
This week Citizens' Bank International (with Rs 21.42 million) topped the chart in terms trading amount followed by Nepal Investment Bank (with Rs 20.69 million), Bank of Asia Nepal (with Rs 17.06 million), National Hydropower Company (with Rs 16.30 million) and Nepal Bangladesh Bank (with Rs 14.55 million).
In terms of number of share units traded, National Hydropower Company topped the chart with 1,73,000-unit shares changing hands while in terms of number of transactions Bank of Asia Nepal topped the chart with 460 transactions.

Nepse misleads
KATHNMANDU: Nepse is misleading. It does not include Sunday's index when it calculates from Sunday's closing to next Friday's opening. Sunday being the first day should be included in the index calculation for correct data. This week, the index plunged by 16 points to 700.16 points from the opening of Sunday morning's 716.01 points. But according to Nepse, it dropped by only 4.70 points because Nepse did not calculate the drop of Sunday's 11.30 points from the opening of Sunday morning's 716.01 points. Nepse said that the transaction was calculated from Friday (July 31) to Tuesday (August 4) as the stock market remained closed on Wednesday and Thursday which were public holidays. This week, Nepse witnessed trading on three days only -- Sunday, Monday and Tuesday -- instead of its regular five days -- Sunday to Thursday. But Nepse did not -- as always -- calculate Sunday's trading points and calculated only two days -- Monday and Tuesday -- and producedmisleading figures. Since its inception, Nepse has been providing misleading information.

Nepal-Sri Lanka expanding trade ties

Sri Lanka's Jetwing leisure group is expanding abroad and building links with foreign partners, including Nepal's Chaudhary conglomerate which is also investing in the island, a top Sri Lankan official said.
Chaudhary Group, through its unit Cinnovation, has already bought a 50 per cent stake in Royal Heritage Hotel, which owns the Jetwing nature reserve 'Vil Uyana' and a 49 per cent stake in Seashells Hotel, when Sri Lanka's Hayleys group exited last month, Sri Lankan Business online news reports.
Chaudhary Group owns hotels in Nepal and other areas too. "We are looking at managing some of Nepal hotels," Jetwing group director Shiromal Cooray told the online news service.
The Nepali conglomerate -- headed by businessman Binod Chaudhary -- also has interests in power generation and food and beverages. Cinnovation has a presence in Sri Lanka through Taj Asia, which controls Colombo's Taj Samudra hotel. Taj Asia is a joint venture between Cinnovation and India's Tata connected Taj hotel division.
Jetwing is also starting the management of Indochina Hotel in Hanoi with Vietnamese partners. It has also been chasing an Indian hotel. But with the end of a 30-year war in Sri Lanka prospects at home are also looking up.
The mainstay of Sri Lanka's leisure sector is Western European tourists. In June, tourist arrivals increased eight per cent. Britain has already relaxed the travel advisory to some parts of the war-torn island, according to the news report. "I am sure this winter will be excellent," says Cooray. "Arrivals have increased. Our foreign partners are saying the bookings are better."
Sril Lanka and Nepal are planning to restart direct air connection between Kathmandu and Colombo soon. The direct air link is expected to give a boost to the Nepali tourism sector as a majority of the Sri Lankans are Buddhists and love to visit Nepal -- especially Lumbini -- the birth-place of Lord Buddha.
Sri Lanka's economic growth has been uneven due to adverse shocks like the decades-long ethnic conflict. However, the relatively strong growth record has proved inadequate in substantially reducing poverty beyond the urban areas.
The two South Asian countries -- both of whom have come out of political disturbances -- are on the path to economic recovery though Sri Lanka is much ahead in economic growth.

Thursday, August 6, 2009

FNCCI greets new Society of Economic Journalists Nepal team

FNCCI president Kush Kumar Joshi, Sejon president narayan Sapkota, FNCCI director Meghnath Neupane, Sejon vice-president Kuvera Chalise, Sejon general secretary Pradeep Chapagain and Sejon secretary Bigyan Bibhu Adhikari at the FNCCI headquarters in Teku, Kathmandu on Thirsday, August 6, 2009. FNCCI greeted the newly elected team of Society of Economic Journalists Nepal.

Nepali groups win four projects

Four Nepali organisations have bagged the World Bank Grant Competition Awards funded by South Asia Region Development Marketplace (SARDM).
Vijaya Development Resource Center -- that aims to improve young children feeding practices through micronutrient supplements, Equal Access Nepal -- with its proposal to enhance birth weight and survival of infants and MaxPro Pvt Ltd with its idea to develop a community based distribution network for iodized salt won the awards. Helen Keller International Inc -- yet another winning innovation from Nepal -- aiming to reduce malnutrition in children less than two years old, was the fourth awardee.
Twenty-one civil society organisations from across South Asia won grants worth $840,000 for Grass Root Initiatives to address malnutrition in South Asia funded by SARDM. The winners received up to $40,000 each to implement innovative ideas on how to improve nutrition in their respective countries.
"Malnutrition is one of the most challenging issues facing South Asia," said Isabel Guerrero, WB's vice-president, South Asia Region, at the opening ceremony in Dhaka yesterday. "Poor nutrition robs the child of a chance to succeed and live a healthy, productive life. Investment in nutrition is one of the social policy interventions that has the highest impact for each dollar spent, in improving a child's future."
"We believe that by integrating health and agriculture we can lead to better nutrition outcomes. This event has given us a platform to learn how the processes of behaviour change happen when you combine household food security and essential nutrition action," said Pooja Pandey Rana from Helen Keller International Inc.
With the funds awarded today, the winners have up to 18 months to plan and implement their innovative projects.
India was the most represented country among winners, with nine out of the 21 winning proposals. Bangladesh and Nepal tied at second place with four winners each. Pakistan followed with two winners. Sri Lanka and Afghanistan had one winning proposal each.
"Family and Community Approaches to Improve Infant and Young Child Nutrition," was this year's title in the competition that was designed to identify some of the most innovative ideas to improve nutrition, focusing especially on children under two years of age and pregnant women.
The competititon drew nearly 1000 applications from Afghanistan, Bangladesh, the Maldives, India, Nepal, Pakistan and Sri Lanka. Through a vigorous assessment process by international development experts, the applicants were narrowed down to 60 finalists who showcased their ideas today in Dhaka.
Guerrero, during her opening remarks, emphasised on the outcome of the Development Marketplace saying that it is precisely the learning that comes from the exchange of ideas and experiences among all participants. Dr A F M Ruhal Haque, Bangladesh's Minister for Health and Family Welfare inaugurated the opening ceremony extending a warm welcome to all participants and praising the initiative. Abul Maal Muhit, Bangladesh's Minister for Finance handed over the certificates to the winners during the closing ceremony.
A Bangladeshi proposal to promote nutritional status of malnourished children of commercial sex workers and families of people living with HIV/AIDS won the People's Choice Award, following popular voting by visitors who attended the Development Marketplace in Dhaka.
The South Asia Regional Development Marketplace was sponsored by UNICEF, World Food Programme (WFP), PepsiCo, the Micronutrient Initiative (MI), GTZ (Germany), and the Global Alliance for Improved Nutrition (GAIN).

Wednesday, August 5, 2009

ADB to increase grants to $583 million

The Asian Development Bank (ADB) has increased its grant allocation to Nepal to $538 million for 2009-2010, from $258 million during 2007-2008.
The allocation is a blend of concessional loans and grants, said vice-president of Operations, Zhao Xiaoyu, at the end his four-day long visit – today -- to Nepal.
"This scaling up of ADB's assistance to Nepal testifies to ADB's strong commitment to Nepal's development and poverty reduction efforts," Zhao said adding that sustaining this level of assistance in the future will largely depend on Nepal's performance in the areas of macroeconomic management, governance and portfolio management.
During his meetings with Prime Minister Madhav Kumar Nepal and other senior government officials, Zhao stressed the importance of staying the course on economic reforms to reduce poverty, addressing other development challenges and working to achieve sustainable economic growth crucial for ongoing peace and stability.
During his visit, he also participated in the foundation-laying ceremony of the diversion tunnel of the Melamchi Water Supply Project that will ease water shortages in the Kathmandu Valley. Speaking at the ceremony, Zhao congratulated the government for its commitment to the completion of the Project and to the institutional reforms required under the project and for achieving substantial progress under challenging circumstances.
The vice-president also signed a grant agreement with the government for ADB's emergency support for the country. The $25.6 million Emergency Flood Damage Rehabilitation Project will help restore economic activity in eastern and far western Nepal, areas which were devastated by last year's monsoon floods.
During his visit to Nepal, Zhao also met with the Deputy Prime Minister, Minister of Finance, the Governor of the Central Bank, the Vice Chairperson of the National Planning Commission and with development partners. He also visited other ADB-assisted project sites.
ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2008, it approved $10.5 billion of loans, $811.4 million of grant projects, and technical assistance amounting to $274.5 million.