Government, petroleum traders talks remain inconclusive

Talks between petroleum traders and government remained inconclusive today too as minister for commerce and supplies Shankar Prasad Koirala sought time to explore alternatives to traders' demands.

The next round of talks will be held on Friday, according to spokesperson of the ministry Deepak Subedi.

The three major stakeholders of the petroleum business — Nepal LP Gas Industries Association, Nepal Petroleum Dealers’ Association and Nepal Petroleum Transporters’ Association — have threatened to stop petroleum supply from April 7, if the government does not withdraw the Petroleum and Gas Trading Monitoring Directives-2013.

"We have demanded an immediate withdrawal of the Petroleum and Gas Trading Monitoring Directives-2013 and the government has asked for more time to do homework," said general secretary of Nepal Petroleum Dealers’ Association Bishwa Prakash, adding that their protest plan will continue if the government does not withdraw the directive.

"We want the directive to be withdrawn from Nepal Gazette as soon as possible," he said, adding that the minister has assured them of talks on the issue with chairman of the Election Council Khil Raj Regmi before sitting for the next round of negotiations.

"Minister Koirala has pledged to bring forth an acceptable solution to the problem," he said.

Talks between petroleum traders and secretary of the ministry Lila Mani Joshi had failed earlier today as the government said that it would not roll back the directive.

However, consumer rights activists have said that the decision by petroleum traders to go on strike is not justifiable. "The government should enforce the Essential Services Act against traders, if they stop supply and distribution of petroleum products," said consumer rights activist Jyoti Baniya.

According to him, both parties should explore a win-win alternative to solve the issue as the country is heading towards an election. It is not the right time to enforce the directive too, he added.

The associations have objected to the criteria set for the private sector's entry in the petroleum business saying that the directive is not in their favour but in the favour of big business houses.

The directive has defined several criteria like a liquefied petroleum gas (LPG) plant must have refilling capacity of 250 tonnes per day and stock capacity of at least 500 metric tonnes. Likewise, the royalty of LPG bottlers has also been increased to Rs 2.6 million. Similarly, it also mentions that petroleum dealers must have three tankers to carry petroleum products and dealers must load at least 3,000 litres at a time.

RMDC to float primary shares at premium

Rural Microfinance Development Centre (RMDC) is going to be the third company — after Chilime Hydro and Nepal Telecom — and the first financial institution to issue primary shares at a premium.
"RMDC has asked Securities Board of Nepal for the final approval to issue 1,560,000 units of primary shares at a face value of Rs 100, with a premium of Rs 80, making it a total of Rs 180 per unit," said chief executive of RMDC Shankar Man Shrestha.
RMDC, the wholesale lender for microfinance institutions, had sold 300,000 units of shares worth Rs 30 million face value at Rs 180 per unit to International Finance Corporation (IFC) — a private sector lending window of the World Bank Group — recently. "IFC paid Rs 54 million in total," he said, adding that Siddhartha Bank had also bought 140,000 unit shares at a premium at various rates of up to Rs 315 per unit. "Siddhartha Bank paid Rs 39.48 million in total."
The class 'D' financial institution, with a paid capital of Rs 364 million, had a net worth of Rs 1.15 billion by the end of the second quarter of the current fiscal year. The net worth is projected to increase to Rs 1.60 billion by the end of the current fiscal year.
RMDC — that has 117 microfinance institutions as its partner institutions across the country serving one-fourth of the total population — was initially promoted by Nepal Rastra Bank and 13 other commercial banks.
According to the current share holding, Standard Chartered Bank Nepal holds 14.33 per cent, Nabil Bank holds 13.93 per cent, Himalayan Bank 13 per cent, Nepal Investment Bank nine per cent and Nepal Bank holds eight per cent, after the entry of IFC that holds 8.2 per cent shares.
Nepal Rastra Bank's share has also come down to five per cent from the initial 25 per cent. After the public issue, their current share holding per cent will further reduce.
"RMDC posted a net profit of Rs 136.5 million in the last fiscal year 2011-12," said Shrestha, adding that a fiscal year back in 2010-11, it had posted Rs 124.8 million net profit, whereas in 2009-10, it had recorded a net profit of Rs 89.2 million.
After the public issue, RMDC will have a paid capital of Rs 520 million. It has appointed Ace Capital as its issue and sales manager for the primary issue.

Service sector could balance trade deficit: Chinese Envoy

Growing number of Chinese tourists inflow should help Nepal balance its trade deficit with China, according to the newly appointed ambassador of China to Nepal Wu Chuntai.
Addressing a meeting with the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here today, the ambassador said that the expansion of service sector and wooing more Chinese tourists could help Nepal balance the trade deficit between the two neighbours.
Nepal's trade deficit with China stood at around Rs 52 billion in the last fiscal year 2011-12, according to the figures from the Trade and Export Promotion Centre (TEPC). "The trade deficit was around Rs 45 billion a fiscal year ago in 2010-11."
Despite China's duty free access to Nepal for over 100 products, China is only Nepal's fifth largest export market but second largest import market, the data revealed.
"The CCTV is planning to broadcast a documentary on Nepal, which will help promote tourism," he said, adding that Chinese film producers are filming a movie in Nepal which will also help promote Nepal in China. "Chinese aviation industry is keen to help Nepal by providing aircraft so that it can expand its national flag carrier’s fleet."
With a total of 17,341 arrivals, Chinese tourists comprises 12.1 per cent in the total number of tourists arrivals during the last three months from January to March as the number of Chinese tourists has been increasing in the recent years. In March alone, some 5,782 Chinese tourists visited Nepal via air. The number stood at 4,260 in the same month in 2012, according to the Nepal Tourism Board data.
Likewise, private sector to private sector cooperation will help promote government to government cooperation, the newly appointed envoy said, praising Nepal's private sector for its expertise on international trade.
Nepal is in between two smiling elephants, Chuntai said, asking the country to take benefit from growing economic power houses India and China. "Nepal should be a bridge between its neighbours that are second largest economy and 10th largest economy, apart from utilising its vast natural resources," he added. "China is helping Nepal in some of the mega projects like Ring Road expansion — for which a group of advanced Chinese engineers have already arrived in Kathmandu — Pokhara Regional International Airport, Upper Trishuli A and West Seti hydropower projects.
On the occasion, the president of FNCCI Suraj Vaidya urged China to help Nepal in development of infrastructure like Ring Road, Pokhara Regional International Airport, promotion of Lumbini, energy and mining sectors, schools and agriculture.
"Chinese investment in Sri Lanka, Bangladesh and even in India has increased by four to five folds in recent years," he said, asking the ambassador to expand development aid as unless economy flourishes, politics cannot sustain.
The private sector also sought help for the joint study on Nepal-China investment strategy, linking two markets via Nepal and establish quarantine labs at the Nepal-China border to help Nepal take benefit from the duty free market access as Nepal has comparative advantages in agri produces. They also sought help for construction of international trade exhibition centre in Kathmandu.

Chinese bank to come
KATHMANDU: The private sector sought the envoy's help on setting a Chinese bank in joint venture in Nepal. "Due to increasing trade and tourism activities in the recent years, there is a need of Chinese bank either in joint venture or branch in Nepal," said executive member of FNCCI and chairman of Global IME Bank Chandra Dhakal, on the occasion. The Chinese embassy is in talks with Nepal Rastra Bank and sooner, there will be some development," ambassador of China to Nepal Wu Chuntai said.

Central Bank to continue managing Nepal Bank for nine more months

The central bank today decided to continue managing Nepal Bank for nine more months.
Though, Nepal Rastra Bank was supposed to call back its management team — currently led by Maheshwor Lal Shrestha — from April 16, a board meeting today has decided to extend the tenure of its management for nine months as the first commercial bank has been increasing its paid up capital by issuing rights shares and selling of fixed assets that it has been planned long, according to a central bank source.
The central bank has been involved in the management of Nepal Bank directly after the foreign management team — under the Financial Sector Reform Programme — returned.
Earlier, Nepal Rastra Bank had sent a team led by Binod Atreya to manage Nepal Bank. It has again sent its team led by Shrestha three years ago to manage the Nepal Bank in April, 2010.
Nepal Bank has recently re-listed its shares at Nepal Stock Exchange (Nepse) in order to carry out its recapitalisation plan. According to the plan to increase the its paid up capital to Rs 4 billion, the bank is raising funds worth Rs 3.62 billion by issuing rights shares.
The government holds 41 per cent stake in the bank while 50 per cent is owned by public shareholders and the remaining belong to different financial institutions. Of the 50 per cent owned by public shareholders, half belongs to minority shareholders and the other half is owned by some of the large industrial groups.
Nepse had de-listed Nepal Bank in 2004 due to the bank’s near insolvency state, prompting a decade-long Financial Sector Reform Programme that was started in 2002.

Tourists arrivals drop by 2.1 per cent

Drop in visitor arrivals from South Asia — especially from India, Bangladesh and Sri Lanka — pulled the overall tourist arrivals by air down by 2.1 per cent in March compared to last March, according to the Immigration Office at Tribhuvan International Airport (TIA).
The data compiled by Nepal Tourism Board (NTB) revealed that the tourist arrivals reached 62,442 with 2.1 per cent decline in March compared to the same month last year that had registered some 63,799 arrivals, it said, adding that the key market, South Asia, recorded negative growth of 33.8 per cent in March compared to last March, though China, one of the key tourists generating markets in recent years continued to post growth.
Arrivals from the Asia — other than SAARC region — registered positive growth of 20.4 per cent with China up by 35.7 per cent, Japan (up by 6.9 per cent), Malaysia (up by 122.3 per cent), Singapore (up by three per cent) and Thailand (up by 0.1 per cent).
Likewise, tourist Arrivals from European region also showed overall positive growth of 1.2 per cent with arrivals from major markets like the UK, France and the Netherlands up by 21 per cent, 18.6 per cent, and 8.3 per cent, respectively. But the arrivals from Germany, Switzerland Spain were down by 12.9 per cent, 48.8 per cent and 30.1 per cent, respectively compared to the same month last year, it added. "Tourist arrivals from Australia, New Zealand, Canada and USA have registered strong growths of 66.6 per cent, 26.4 per cent, 25.5  per cent and 17 per cent, respectively."
On the basis of arrivals of the first three months from January to March, Asia — except South Asian — contributes 28.1 per cent, followed by South Asia at 22.3 per cent, Europe 26.7 per cent, Oceania 4.1 per cent, Americas 10 per cent and others 8.8 per cent in the total tourist arrivals.
A total of 56,902 foreign tourists departed from TIA in March, whereas some 65,461 Nepalis arrived and 88,627 Nepalis departed from TIA in March.

 

Marketwise contribution
Asia (except South Asia) — 28.1 per cent
Europe — 26.7 per cent
South Asia — 22.3 per cent
Oceania — 4.1 per cent
Americas — 10 per cent
Others — 8.8 per cent
(Source: Nepal Tourism Board)