Lord Buddha Financial Institution Ltd. is presenting an initial public offering for the general public. Total 225000 shares is being issued at the rate of Rs. 100 per share, which includes 11,250 shares to be provided to its own staffs. The company is issuing the IPO from 29th June, 2008 to 3rd July, 2008 (2065 Ashad 15 to 2065 Ashad 19). The issue will be managed by Ace Development Bank.
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Saturday, June 28, 2008
Kaski Finance Ltd issuing IPO
Kaski Finance Ltd. has been presenting an initial public offering for the general public. Total 200000 shares amount Rs 20 million is being issued at the rate of Rs. 100 per share, which includes 10,000 shares for its own staffs. The company has been issuing the IPO from 27th June, 2008 to 2nd July, 2008 (2065 Ashad 13 to 2065 Ashad 18). The issue is managed by NMB Bank.
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Sagarmatha Finance: To issue IPO
Sagarmatha Merchant Banking and Finance Ltd. is presenting an initial public offering for the general public. Total 200000 shares amounting to Rs. 20 million is being issued at the rate of Rs. 100 per share, where 10,000 shares will be allocated to its employees. The company is issuing the IPO from 6th July, 2008 to 10th July, 2008 (2065 Ashad 22 to 2065 Ashad 26). The issue will be managed by Citizen Investment Trust (CIT).
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Few stockbrokers delaying business at NEPSE
Due to the small number of brokers at the Nepal Stock Exchange (NEPSE) and the inability of the operator and regulator to monitor them, share traders are facing delays in getting their transactions processed, said market watchers.
Speaking at an interaction program entitled “Responsibility of Listed Companies in the Effective Operation of Secondary Market”, they said investors had to wait for months to get their share certificates transferred, and that it took days for them to get their money after making a sale. NEPSE organized the program.
There are only 23 stockbrokers at NEPSE, and it has not made any new appointments for the last 12 years. Last year, it initiated measures to add 27 brokers to its roster but later abandoned the move.
NEPSE chairman Bimal Wagle said that they were once again working to bring in more brokers. “In addition, we are doing research on leaving open entry of brokers under wider area network,” he said.
NEPSE general manager Rewat Bahadur Karki pointed to the lengthy official process involved in transferring shares, which can take as long as three months. “We must set up a central depository system that will cut the time to three to five days,” he said.
He said they were working to bring down the listing time to 15 days from the current one month.
Dr Chiranjiwi Nepal, chairman of the Securities Board of Nepal (SEBON), said the most serious problem in the stock market was insider trading under which people having access to key information about the listed companies engage in buying and selling shares. “Eliminating this practice depends on the company secretary,” he said. Krishna Bahadur Manandhar, acting governor of Nepal Rastra Bank, said that unless manufacturing and trading companies enter the stock market in a big way, it cannot develop, mature and become vibrant.
National Planning Commission member Posh Raj Pandey said the rise in stock prices has not been backed by economic growth. “We have to develop the stock market as a platform to provide stable long-term returns to middle-income people,” he said.
Source: eKantipur
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Revenues increase 26pc, expenditures up 20pc
The long-sluggish Nepali economy has finally got some reason to celebrate, despite some hiccups witnessed in the political front. After recording a seven-year high economic growth, revenue collection, which finances more 60 percent of the total government expenditures, registered a robust growth of 26.5 percent, more than what the annual budget had targeted, by the end of the eleventh month of the current fiscal year.
Tabulated statistics prepared by the Ministry of Finance showed that total revenue collection by mid-June was Rs 90.17 billion, Rs 4.75 billion more than the target set for the eleven months of the current fiscal year.
Overall tax revenue, during the period, stood at Rs 74.62 billion, a 23.7 percent rise compared to the same period last year while mobilization of non-tax revenue recorded a quantum leap of almost 42 percent to Rs 15.55 billion.
Of the six major sources for tax revenue, collection of registration fee witnessed a gigantic jump of almost 39 percent to Rs 3.33 billion, thanks to rapid growth in trade of fixed assets, like real-estate and vehicles.
With an impressive growth of almost 30 percent, revenue form income tax stood at Rs 14.54 billion whereas the total collection of the sector was Rs 11.20 billion during the same period last year.
“A robust growth in collection of income tax from the public corporate institutions, mainly the financial institutions, boosted the overall mobilization,” an official of the Ministry of Finance said.
Similarly, revenue collection from customs also demonstrated a healthy growth of 21.21 percent to Rs 18 billion against the Rs 14.46 billion mobilized during the same period last year. Despite a pessimistic decline in mobilization of customs from exports, double-digit growth in collection from imports and Indian Excise Duty refunds helped push up the numbers. Rapidly growing consumption expenditures propped up mainly by strong remittance income that played a crucial role in increasing fuel imports, according to experts.
The positive impact of improved consumption was also reflected in the collection of VAT, which is the single largest contributor to the national revenue coffers. Total VAT collection during the period was Rs 28 billion, which was almost 19 percent higher than the figures recorded during the same period last year. Collection through excise duty also went up by 24.5 percent to Rs 9.4 billion whereas total collection from the sector during same period last year was Rs 7.56 billion.
Along with the robust growth in revenue collection, total government expenditures also swelled by almost 20 percent to Rs 1.15 billion. Of the total expenditures, Rs 73 billion was spent for recurrent expenditures and Rs 28 billion for the capital expenditure, while the remaining Rs 13.96 billion was used for repaying of principals of loans.
Source: eKantipur
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‘Keep pegged exchange rate to check inflation’
The International Monetary Fund (IMF) has stressed the need to continue the pegged exchange rate arrangement with the Indian rupee to keep domestic inflation within manageable limits.
Talking to media persons after ending pre-budget consultations with the government, head of the IMF delegation Brian J Aitken said that continuation of the pegged exchange rate system had not only helped to check inflation but also discouraged capital flight to India.
In addition, inflation in the future will depend largely on the right budgetary policies, he added. He further said that the level of inflation for the current fiscal year could hover around 8 percent mainly due to the rising international prices of food and fuel.
“Maintaining the exchange rate peg, which has been crucial in keeping inflation low and stable, will require a fiscal policy that recognizes the limited resources available,” said a press release issued at the program.
Aitken also said the upcoming budget should keep the budget deficit within a comfortable range by recognizing the border of limited resources. “Responsible fiscal management during the years of conflict has given Nepal a solid platform for economic growth, and protecting the assets will require a budget that recognizes the economy's limited resources,” he said.
He also said that despite the difficult political scenario, the country could achieve a 4.75 percent GDP growth at producers' prices during the current fiscal year and predicted that outgrowth could rise further to 2.5 percent in the coming year.
He further said that heavy domestic borrowing from the market could limit the size of lending to the private sector, which could adversely affect their development, ultimately shrinking growth prospects.
Aitken also reiterated concern over huge and scarce state funds being used to make up mounting losses in the oil trade, and warned that such arrangements could push domestic borrowing to unsustainable levels.
“The ballooning loss in the oil trade is shrinking the government's expenditure capacity to invest in crucial areas like education, and there is an urgent need to find a mechanism to address the problem,” he said.
Source: eKantipur
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Talking to media persons after ending pre-budget consultations with the government, head of the IMF delegation Brian J Aitken said that continuation of the pegged exchange rate system had not only helped to check inflation but also discouraged capital flight to India.
In addition, inflation in the future will depend largely on the right budgetary policies, he added. He further said that the level of inflation for the current fiscal year could hover around 8 percent mainly due to the rising international prices of food and fuel.
“Maintaining the exchange rate peg, which has been crucial in keeping inflation low and stable, will require a fiscal policy that recognizes the limited resources available,” said a press release issued at the program.
Aitken also said the upcoming budget should keep the budget deficit within a comfortable range by recognizing the border of limited resources. “Responsible fiscal management during the years of conflict has given Nepal a solid platform for economic growth, and protecting the assets will require a budget that recognizes the economy's limited resources,” he said.
He also said that despite the difficult political scenario, the country could achieve a 4.75 percent GDP growth at producers' prices during the current fiscal year and predicted that outgrowth could rise further to 2.5 percent in the coming year.
He further said that heavy domestic borrowing from the market could limit the size of lending to the private sector, which could adversely affect their development, ultimately shrinking growth prospects.
Aitken also reiterated concern over huge and scarce state funds being used to make up mounting losses in the oil trade, and warned that such arrangements could push domestic borrowing to unsustainable levels.
“The ballooning loss in the oil trade is shrinking the government's expenditure capacity to invest in crucial areas like education, and there is an urgent need to find a mechanism to address the problem,” he said.
Source: eKantipur
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Friday, June 27, 2008
Nepal Shree Lanka Mer. Bank: Promoters' Share Sale Notice
Nepal Shree Lanka Mer. Bank is about to sell its holding of Nepal Bangladesh Bank's promoters share from 26th June, 2008 (2065 Ashad 12).
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Inflation close to double digits
Nepali inflation is picking up pace and inching close to double-digit figures, threatening to make some serious dent in the household budget of consumers. Fresh data released by the Nepal Rastra Bank (NRB) shows that the inflation based on the consumer price index rose to 9.2 percent in mid-May, the tenth month of the current fiscal year, up from 4.6 percent of the same time last year.
The central bank said the rising prices of food items led to the rise. Still, the inflation based on wholesale price index increased to 10.1 percent.
NRB officials said inflation would further rise in the coming months, as the recent price hike of petroleum products would have to be considered.
On the import front, a rise of 21 percent was seen as people consumed more on the back of healthy inflow of remittance.
NRB said there had been significant rise in import of petroleum products, MS billet, vehicles and spare parts, gold, telecommunication equipment, videos, television and parts.
However, exports fell by 1.2 percent, widening the trade deficit. Of the total exports, the country experienced a decline of 7.5 percent in exports with India due to a fall in the export of vegetable ghee, textiles, chemicals, rosin and toothpaste.
Exports to other countries except India grew by 13 percent compared to a decline of 3.1 percent in the same period last year, on the back of increase in export of pulses, Nepali paper and paper products, herbs, wheat, packing materials of paper, cigarettes, electric wire and stationary, NRB officials said.
There is something to cheer about for the economy. The flow of remittance grew by 35.3 percent to Rs 108.64 billion. During the same period last year, remittance had gone up by just 3.1 percent.
As a result of the huge influx of remittance, Nepal's foreign exchange reserves increased by 19.3 percent to Rs 197.03 billion. The central bank said the current level of reserves is adequate for financing merchandise imports for 10.6 months, and merchandise and service imports for 8.6 months.
On the budgetary front, the government budget deficit was Rs 6.4 billion during that period, compared to a surplus of Rs 2.86 billion. To meet the growing requirement of Indian currency, NRB purchased the Indian units worth Rs 77.27 billion through a sale of US$ 1.21 billion.
The country received foreign cash grants of Rs 13.68 billion to boost development activities. It had got Rs 12.62 billion in the same period last year.
Source: eKantipur
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The central bank said the rising prices of food items led to the rise. Still, the inflation based on wholesale price index increased to 10.1 percent.
NRB officials said inflation would further rise in the coming months, as the recent price hike of petroleum products would have to be considered.
On the import front, a rise of 21 percent was seen as people consumed more on the back of healthy inflow of remittance.
NRB said there had been significant rise in import of petroleum products, MS billet, vehicles and spare parts, gold, telecommunication equipment, videos, television and parts.
However, exports fell by 1.2 percent, widening the trade deficit. Of the total exports, the country experienced a decline of 7.5 percent in exports with India due to a fall in the export of vegetable ghee, textiles, chemicals, rosin and toothpaste.
Exports to other countries except India grew by 13 percent compared to a decline of 3.1 percent in the same period last year, on the back of increase in export of pulses, Nepali paper and paper products, herbs, wheat, packing materials of paper, cigarettes, electric wire and stationary, NRB officials said.
There is something to cheer about for the economy. The flow of remittance grew by 35.3 percent to Rs 108.64 billion. During the same period last year, remittance had gone up by just 3.1 percent.
As a result of the huge influx of remittance, Nepal's foreign exchange reserves increased by 19.3 percent to Rs 197.03 billion. The central bank said the current level of reserves is adequate for financing merchandise imports for 10.6 months, and merchandise and service imports for 8.6 months.
On the budgetary front, the government budget deficit was Rs 6.4 billion during that period, compared to a surplus of Rs 2.86 billion. To meet the growing requirement of Indian currency, NRB purchased the Indian units worth Rs 77.27 billion through a sale of US$ 1.21 billion.
The country received foreign cash grants of Rs 13.68 billion to boost development activities. It had got Rs 12.62 billion in the same period last year.
Source: eKantipur
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Sunrise Bank opens Gabahal branch
Sunrise Bank Ltd has opened a new branch in Gabahal of Lalitpur on Thursday. The new branch was inaugurated by culture expert Satya Mohan Joshi. Kishore Maharjan, chief executive officer of the bank, said the bank's involvement will be significant in promoting Small and Medium Enterprises as well as local arts and culture in the district. Issuing a press release, the bank said it had collected Rs 4 billion as deposits and invested over Rs 3.5 billion as loans. The bank said it is planning to set up 10 more branches by September this year.(Source: eKantipur)
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SBL's new accounts
Siddhartha Bank Ltd (SBL) has started Bal Bachat Khata for children. "The account attracts six per cent interest," said a press release on Thursday. Siddhartha Bank has various saving schemes like Bisesha Bachat, Siddhartha Bachat, Siddhartha Mega Savings.
Source: The Himalayan Times
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Source: The Himalayan Times
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Thursday, June 26, 2008
Brokers and their contact information
| S. No | Firm Name | Code | Tel. No. | Address |
| 1 | Kumari Securities Pvt. Limited | 1 | 01-4418036 | Dilli Bazar,Kathmandu |
| 2 | Arun Securities Pvt. Limited | 3 | 01-6916470 | Putalisadak,Kathmandu |
| 3 | Opal Securities Investment Pvt. Limited | 4 | 01-4421648 | Ramshah Path,Kathmandu |
| 4 | Market Securities Exchange Company Pvt. Limited | 5 | 01-4248973 | Kichha Pokhari,Kathmandu |
| 5 | Agrawal Securities Pvt. Limited | 6 | 01-4229739 | Shankardev Marga, Putalisadak,Kathmandu |
| 6 | J.F. Securities Company Pvt. Limited | 7 | 01-4223089 | Putalisadak,Kathmandu |
| 7 | Ashutosh Brokerage & Securities Pvt. Limited | 8 | 01-4220276 | Kichha Pokhari,Kathmandu |
| 8 | Pragyan Securities Pvt. Limited | 10 | 01-4498234 | Putalisadak,Kathmandu |
| 9 | Malla & Malla Stock Broking Company Pvt. Limited | 11 | 01-4414263 | Dillibazar,Kathmandu |
| 10 | Annapurna Securities Service Pvt. Limited | 13 | 01-4419051 | Putalisadak,Kathmandu |
| 11 | Nepal Stock House Pvt. Limited | 14 | 01-4255732 | Anamnagar,Kathmandu |
| 12 | Primo Securities Pvt. Limited | 16 | 01-4239214 | Shankardev Marga, Putalisadak,Kathmandu |
| 13 | Khandelwal Stock Broking Company Pvt. Limited | 17 | 01-4230787 | Indrachowk,Kathmandu |
| 14 | Sagarmatha Securities Pvt. Limited | 18 | 01-4242548 | Putalisadak,Kathmandu |
| 15 | Nepal Investment & Securities Trading Pvt. Limited | 19 | 01-4495450 | Old Baneshowar,Kathmandu |
| 16 | Sipla Securities Pvt. Limited | 20 | 01-4255782 | NewRoad,Kathmandu |
| 17 | Midas Stock Broking Company Pvt. Limited | 21 | 01-4416050 | Dillibazar,Kathmandu |
| 18 | Siprabi Securities Pvt. Limited | 22 | 01-5530701 | Kupondol,Lalitpur |
| 19 | Sweta Securities Pvt. Limited | 25 | 01-4444791 | Putalisadak,Kathmandu |
| 20 | Asian Securities Pvt. Limited | 26 | 01-4240609 | Viharmarga,Kathmandu |
| 21 | Shree Krishna Securities Pvt. Limited | 28 | 01-4224262 | NewRoad,Kathmandu |
| 22 | Trishul Securities Pvt. Limited | 29 | 01-4440709 | Putalisadak,Kathmandu |
| 23 | Premier Securites Pvt. Limited | 32 | 01-4231339 | Putalisadak,Kathmandu |
Source: Nepal Stock Exchange
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Liquidity crunch may hit market
The market is likely to experience a liquidity crunch. As a result, the interbanking rate is expected to shoot up.
Unlike paper transactions earlier, the issue manager has to deposit the total collection at Nepal Rastra Bank (NRB) for at least three days. The recent directives of the NRB and Securities Board of Nepal (Sebon) dictate the financial companies to deposit the collection in an account in the central bank.
“The ‘cash’ has to be deposited in the central bank,” said Pravin Raman Parajuli, head-Merchant Banking Department of NMB Bank Ltd, the issue manager of the Clean Energy Development Bank (CEDB).
“Tentative Clean Energy Development Bank (CEDB) attracted Rs 4 billion that is around 42 times of what the bank had called for. CEDB floated its 9,60,000unit shares worth Rs 9,60,000,00 for the public.
Similarly, Shikhar Finance Company floated 2,00,000-unit of shares worth Rs 20,00,00,00. It might have also collected more than triple the called for amount, Rs 60 million. Subekchhkya Development Bank floated 1,20,000-unit shares worth Rs 1,20,00,000 today. It is also expected to collect 10 times the call. Lord Buddha Finance Company is also floating 2,25,000unit shares worth Rs 2,25,000,00, and is expected to collect some 10 to 12 times of the call money.
“This is a clear indication that there will be liquidity crunch in the market,” said Rabindra Bhattarai, a share analyst. The crunch may be really serious one as there are more companies in the pipeline to float public shares.
For example, Kaski Finance Company is floating 2,00,000unit of shares worth Rs 2,00,000,00; Triveni Develop ment Bank is floating 1,50,000unit shares worth Rs 1,50,000,00; Pashupati Development Bank is floating 8,00,000-unit of shares worth Rs 8,00,000,00; Sagarmatha Merchant Banking and Finance is floating 2,00,000-unit shares worth Rs 2,00,000,00 and Reliable Investment Finance Company is floating 2,47,500unit shares worth Rs 2,47,500,00.
There are numerous financial institutions in the pipeline to float public shares worth about half-a-billion rupees.
Due to the Initial Public offerings (IPOs) of huge amounts at the same time, the secondary market is bearing the brunt.
Nepse registered a fall on the first three days of this week, Sunday, Monday and Tuesday, due to capital diversion. However, it recovered today.
During the first nine months of the current fiscal year, all major indicators of secondary market showed a substantial rise. During the period, the trading of equities rose by about 169 per cent to Rs 14.92 billion, while market capitalisation and Nepse recorded a sharp rise of 91 per cent and 51 per cent, respectively.
Similarly, market indicators registered a significant growth in March-April. However, monthly data for mid-March-mid-April compared to last month’s data (mid-Februar y-mid-March) showed a sharp decline (42.4 per cent) in the trading amount and only a moderate rise in Nepse and market capitalisation.
The performance of the primary market was also encouraging during the first nine months of the current fiscal year in comparison to the performance in the same period in 2006-07.
The number of traded shares increased by 29.59 per cent and the traded amount also increased by 111.86 per cent during the month compared to the traded shares and amount of the same period last year.
Source: eKantipur
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Unlike paper transactions earlier, the issue manager has to deposit the total collection at Nepal Rastra Bank (NRB) for at least three days. The recent directives of the NRB and Securities Board of Nepal (Sebon) dictate the financial companies to deposit the collection in an account in the central bank.
“The ‘cash’ has to be deposited in the central bank,” said Pravin Raman Parajuli, head-Merchant Banking Department of NMB Bank Ltd, the issue manager of the Clean Energy Development Bank (CEDB).
“Tentative Clean Energy Development Bank (CEDB) attracted Rs 4 billion that is around 42 times of what the bank had called for. CEDB floated its 9,60,000unit shares worth Rs 9,60,000,00 for the public.
Similarly, Shikhar Finance Company floated 2,00,000-unit of shares worth Rs 20,00,00,00. It might have also collected more than triple the called for amount, Rs 60 million. Subekchhkya Development Bank floated 1,20,000-unit shares worth Rs 1,20,00,000 today. It is also expected to collect 10 times the call. Lord Buddha Finance Company is also floating 2,25,000unit shares worth Rs 2,25,000,00, and is expected to collect some 10 to 12 times of the call money.
“This is a clear indication that there will be liquidity crunch in the market,” said Rabindra Bhattarai, a share analyst. The crunch may be really serious one as there are more companies in the pipeline to float public shares.
For example, Kaski Finance Company is floating 2,00,000unit of shares worth Rs 2,00,000,00; Triveni Develop ment Bank is floating 1,50,000unit shares worth Rs 1,50,000,00; Pashupati Development Bank is floating 8,00,000-unit of shares worth Rs 8,00,000,00; Sagarmatha Merchant Banking and Finance is floating 2,00,000-unit shares worth Rs 2,00,000,00 and Reliable Investment Finance Company is floating 2,47,500unit shares worth Rs 2,47,500,00.
There are numerous financial institutions in the pipeline to float public shares worth about half-a-billion rupees.
Due to the Initial Public offerings (IPOs) of huge amounts at the same time, the secondary market is bearing the brunt.
Nepse registered a fall on the first three days of this week, Sunday, Monday and Tuesday, due to capital diversion. However, it recovered today.
During the first nine months of the current fiscal year, all major indicators of secondary market showed a substantial rise. During the period, the trading of equities rose by about 169 per cent to Rs 14.92 billion, while market capitalisation and Nepse recorded a sharp rise of 91 per cent and 51 per cent, respectively.
Similarly, market indicators registered a significant growth in March-April. However, monthly data for mid-March-mid-April compared to last month’s data (mid-Februar y-mid-March) showed a sharp decline (42.4 per cent) in the trading amount and only a moderate rise in Nepse and market capitalisation.
The performance of the primary market was also encouraging during the first nine months of the current fiscal year in comparison to the performance in the same period in 2006-07.
The number of traded shares increased by 29.59 per cent and the traded amount also increased by 111.86 per cent during the month compared to the traded shares and amount of the same period last year.
Source: eKantipur
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NIC opens 4th branch
NIC Bank has opened its fourth branch in Bhaktapur making it a total of 15 branches across the country. Jagdish Prasad Agrawal, chairman of the Bank inaugurated the branch here on Wednesday. “Bhaktapur branch provides a full range of products and services including all modern day banking facilities like trade finance, remittance, business and consumer loans, ATM / debit cards, drafts, SMS banking, travellers cheques,” states a press release. The branch is connected to all other branches through a V-Sat network.
Source: The Himalayan Times
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Source: The Himalayan Times
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Wednesday, June 25, 2008
Clean Energy receives share applications worth Rs 3b
Clean Energy Development Bank has received applications for shares worth over Rs 3 billion during its Initial Public Offering (IPO). The development bank made the IPO last Thursday with a target to raise Rs 96 million, which ended today. "Total share applications amounted to Rs 1.85 billion till yesterday. We estimate the overall demand is in the range of Rs 3-4 billion," said Upendra Poudel, chief executive officer of NMB Bank, the issue manager. "We will be able to calculate the exact amount by Wednesday." The bank has set up 78 counters across the country to collect share applications.
Source: eKantipur
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Source: eKantipur
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Subhechha's IPO starting from today
Subhechha Bikash Bank Ltd. is presenting an initial public offering for the general public. Total 120000 shares amounting to Rs. 12 million is being issued at the rate of Rs. 100 per share. The company is issuing the IPO from 25th June, 2008 to 30th June, 2008 (2065 Ashad 11 to 2065 Ashad 16). The issue will be managed by ACE development bank ltd. Subhechha commenced its operation from 26th september 2004 and is located in Narayangadh, Chitwan. The bank has authorized capital of Rs. 200 million and issue capital of Rs. 40 million.
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Shikhar Finance Ltd's IPO closing soon
Shikhar Finance Ltd is going to close its initial public offering (IPO) from tomorrow June 25 (Ashad 12). So, interested investors are requested to hurry up for filling up the share purchase form.
Total 200000 shares amounting to Rs. 20 million is being issued at the rate of Rs. 100 per share. Shikhar Finance Ltd has been issuing the IPO from 22nd June, 2008(Ashad 8)
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Total 200000 shares amounting to Rs. 20 million is being issued at the rate of Rs. 100 per share. Shikhar Finance Ltd has been issuing the IPO from 22nd June, 2008(Ashad 8)
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An Investor-friendly Move
In what may be termed as ‘better-late-thannever’, the recent move to begin an Over-the-Counter (OTC) market trading in Nepal from Wednesday (June 4, 2008) has come as an investor-friendly move that will go a long way, in creating a conducive investment-scenario, and in providing requisite liquidity assurance to investors in the country. With the automation of stock-trading from November 5th of 2006 and a few other reforms already in place, the OTC market operation has ushered the capital market in a new era.
Imperative
The country has long felt an imperative need for an OTC market in which shares of those companies de-listed from the Nepal Stock Exchange Ltd (NEPSE), the formal stock exchange authority in Nepal. Such an alternative window to the capital market is also essential for trading those company shares, which have not yet been listed with the NEPSE, even after the initial public offering (IPO) at the primary market.
Now that the NEPSE has started the OTC market in the country following the endorsement on OTC Market Regulations by the Securities Board of Nepal (SEBON), those shares beyond the ‘formal listing’ can be traded throughout the week from 11.00 am to 13.00 pm. It usually relies on quote-driven trading. The beauty of the OTC market is that it needs no stock-brokers for intermediation; it re-injects liquidity to the securities which buyers and sellers can trade by paying commission to the OTC authority. At present, the NEPSE has fixed commission of 1 per cent on the transaction amount up to Rs. 25,000, 1.5 per cent on that of Rs. 25,000-50,000, and 2 per cent for transaction above that.
In addition to offering liquidity, the OTC market is also instrumental in reducing the investors’ crowd on the Stock Exchange floor of secondary market, as the capital market characterised with a bullish trend also partly shifts to the OTC option.
Operation of the OTC market has come as a relief to those who have invested in the shares of 38 companies including Nepal Bank Ltd, as those companies’ shares worth Rs. 969.2 million have so far been registered; it provides a much-coveted ‘exit’ to investors for retrieving their outlay on the securities that do not meet the requisite criteria for listing at the Stock Exchange.
In the absence of the OTC market, many investors have been robbed of liquidity in their investments, as they could not trade on those shares on the NEPSE’s trading floor —the secondary market, once the concerned companies failed to get duly listed, or got de-listed from the NEPSE.
In principle, the de-listing action comes as a penalty against the companies’ non-compliance of the law “to protect the investors’ interest.” But, ironically, it is the investors who have to bear the brunt. The de-listing only freezes up the investors’ money, as the de-listed company’s shares cannot be traded on the floor. It deprives them of enjoying fund-liquidity, as well as of investment opportunities elsewhere.
In its first-ever move, the NEPSE had de-listed securities of 25 companies five years ago on Ashadh 22, 2059 BS where total paid-up value of the 10,280,242 de-listed shares amounting to Rs. 261.62 million was blocked from trading.
Again on Chaitra 19, 2060 BS, securities of Nepal Bank Ltd were de-listed that fuelled a debate on legitimacy of the de-listing action. It also made illiquid the investments of about 10,000 investors, which is an extremely substantial number given the small size of Nepalese market. Conspicuously, central bank Nepal Rastra Bank (NRB) has suspended, for the time being, the OTC trading of shares of Nepal Bank Ltd that the central bank has put under ‘restructuring’ as a part of its financial sector reforms plan.
Up till now, the total number of companies facing the fate of delisting has reached 38. Importantly, NEPSE showed the two major reasons for delisting them: non-disclosure of their annual reports and financial statements for past two years and non-payment of annual listing fees. Neither of them was the investors’ default, but the companies’. Yet, the investors — numbered in thousands— had to suffer from illiquidity of their money with a spell of all uncertainty until the last Wednesday.
Way Ahead
Beginning the OTC trading is not the end. The country should visualise its way ahead for fostering a healthy, competitive capital market. Apart from bringing the delisted shares back to the listing trajectory by correcting the faults and discrepancies of the companies, there is the need to promote corporate governance. Market authorities like the SEBON and NEPSE should take proactive measures so that investors’ interests can be protected and promoted without having to take up curative and reactionary steps alone. And, sensitising investors and general public about their rights and capital market operation is extremely important. All of them are indispensable, as Nepal is bracing for the challenges that will crop up after the capital market liberalisation beyond 2010/2012 to comply with Nepal’s commitment at the World Trade Organisation (WTO).
Source: The Rising Nepal (Editorial)
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Imperative
The country has long felt an imperative need for an OTC market in which shares of those companies de-listed from the Nepal Stock Exchange Ltd (NEPSE), the formal stock exchange authority in Nepal. Such an alternative window to the capital market is also essential for trading those company shares, which have not yet been listed with the NEPSE, even after the initial public offering (IPO) at the primary market.
Now that the NEPSE has started the OTC market in the country following the endorsement on OTC Market Regulations by the Securities Board of Nepal (SEBON), those shares beyond the ‘formal listing’ can be traded throughout the week from 11.00 am to 13.00 pm. It usually relies on quote-driven trading. The beauty of the OTC market is that it needs no stock-brokers for intermediation; it re-injects liquidity to the securities which buyers and sellers can trade by paying commission to the OTC authority. At present, the NEPSE has fixed commission of 1 per cent on the transaction amount up to Rs. 25,000, 1.5 per cent on that of Rs. 25,000-50,000, and 2 per cent for transaction above that.
In addition to offering liquidity, the OTC market is also instrumental in reducing the investors’ crowd on the Stock Exchange floor of secondary market, as the capital market characterised with a bullish trend also partly shifts to the OTC option.
Operation of the OTC market has come as a relief to those who have invested in the shares of 38 companies including Nepal Bank Ltd, as those companies’ shares worth Rs. 969.2 million have so far been registered; it provides a much-coveted ‘exit’ to investors for retrieving their outlay on the securities that do not meet the requisite criteria for listing at the Stock Exchange.
In the absence of the OTC market, many investors have been robbed of liquidity in their investments, as they could not trade on those shares on the NEPSE’s trading floor —the secondary market, once the concerned companies failed to get duly listed, or got de-listed from the NEPSE.
In principle, the de-listing action comes as a penalty against the companies’ non-compliance of the law “to protect the investors’ interest.” But, ironically, it is the investors who have to bear the brunt. The de-listing only freezes up the investors’ money, as the de-listed company’s shares cannot be traded on the floor. It deprives them of enjoying fund-liquidity, as well as of investment opportunities elsewhere.
In its first-ever move, the NEPSE had de-listed securities of 25 companies five years ago on Ashadh 22, 2059 BS where total paid-up value of the 10,280,242 de-listed shares amounting to Rs. 261.62 million was blocked from trading.
Again on Chaitra 19, 2060 BS, securities of Nepal Bank Ltd were de-listed that fuelled a debate on legitimacy of the de-listing action. It also made illiquid the investments of about 10,000 investors, which is an extremely substantial number given the small size of Nepalese market. Conspicuously, central bank Nepal Rastra Bank (NRB) has suspended, for the time being, the OTC trading of shares of Nepal Bank Ltd that the central bank has put under ‘restructuring’ as a part of its financial sector reforms plan.
Up till now, the total number of companies facing the fate of delisting has reached 38. Importantly, NEPSE showed the two major reasons for delisting them: non-disclosure of their annual reports and financial statements for past two years and non-payment of annual listing fees. Neither of them was the investors’ default, but the companies’. Yet, the investors — numbered in thousands— had to suffer from illiquidity of their money with a spell of all uncertainty until the last Wednesday.
Way Ahead
Beginning the OTC trading is not the end. The country should visualise its way ahead for fostering a healthy, competitive capital market. Apart from bringing the delisted shares back to the listing trajectory by correcting the faults and discrepancies of the companies, there is the need to promote corporate governance. Market authorities like the SEBON and NEPSE should take proactive measures so that investors’ interests can be protected and promoted without having to take up curative and reactionary steps alone. And, sensitising investors and general public about their rights and capital market operation is extremely important. All of them are indispensable, as Nepal is bracing for the challenges that will crop up after the capital market liberalisation beyond 2010/2012 to comply with Nepal’s commitment at the World Trade Organisation (WTO).
Source: The Rising Nepal (Editorial)
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Tuesday, June 24, 2008
Upcoming 13th AGM: Citizen Investment Trust
Citizen Investment Trust has announced its forthcoming 13th AGM to be held on 14th July, 2008 (2065 Ashad 30). The meeting will talk about different issues including dividend issues (Cash Dividend and Bonus Share) for the approval from the board.
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NEPSE turns profit making company
With the approval from the office of the company registrar, Nepal Stock Exchange (NEPSE), the only share market in the country, has been transformed into a profit making institution. The decision to transform the NEPSE as a profit making company was taken during the 26th general assembly held recently. With this decision, the organizational and financial structure of the company has also been reviewed. The board members have been dropped down to seven from nine. The total capital of the company will be raised to Rs 160 million from Rs 50 million while running capital will go up from Rs 30.5 million to Rs 50 million. To manage the increasing capital stocks, NEPSE said a Central Deposit System (CDS) will be created. The reformed NEPSE board of directors includes representatives from government of Nepal, Nepal Rastra Bank and Nepal Industrial Development Corporation (NIDC). The representation from NEPSE and brokers has been canceled citing the conflict of interest between the two sides. NEPSE said the changes have been adopted in its effort to strengthen the role of stock exchange more effectively and make its functions dynamic, transparent and efficient, a statement issued by the NEPSE said.
Source: NepalNews
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Source: NepalNews
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Better investment climate urged
Entrepreneurs today suggested government that the next budget should address plight of export sector and create condusive investment climate changing tax rates and exploiting the potential areas where Nepal has comparative advantages.
“Its high time we need to think on how to rejuvenate export,” said Binod Chaudhary, president of Confederation of Nepalese Industry (CNI), during pre-budget interaction with finance minister Dr Ram Sharan Mahat.
“How to attract more investment to fight double digit inflation, rising crude prices, acute food shortage, rising commodity and transportation cost,” he said adding that lack of employment opportunities and dwindling public sector investment are some of the problems that government must address.
Jagdish Agrawal, vicepresident of CNI, presenting a paper admired political parties for starting to take economic issues seriously.
Though, agriculture — a comparative advantage sector — contributes approximately 40 per cent to total GDP, its growth is not satisfactory. “To revive it, commercialisation of farming is a must,” Agrawal added.
“CNI wants a transparent roadmap of investment to achieve double digit growth in the next five years,” CNI suggests, adding that Rs 450 to Rs 500 billion per year will be necessary to achieve the growth target. The massive investment required for achieving it can be shared between private and public sector but the government should take lead in terms of massive allocation to infrastructure development, energy management, transportation and irrigation.
“The funds with Army, Citizen Trust, Provident Fund could be used for development,” CNI suggested.
The dependency on imported fuel should be reduced and alternative to fossile fuel should be given priority, said CNI.
Finance Minister Dr Ram Sharan Mahat agreed on development of alternative sources of energy. “The government has been supporting bio-gas and solar energy,” he said.
“Nepali coffee has more demand in the third country,” Mahat added.
“Cement industry has great potential as big hydro power projects are coming in the future,” he added. CNI has categorised five industry: Cement, textile, petroleum refining, carbon steel and electricity generation.
“Political orientation, social and economic discipline, and labour relation effect investment environment,” the finance minister said, adding that due to transition period there is a lack of social discipline at present.
However, dismal scenario could not hurt public investment and spending on rural infrastructure is also increasing. “Import is increasing that shows market is also expanding,” he said. Except for manufacturing, all other sectors are growing and government can go to extra mile to push export, Mahat added.
He also blamed labour dispute for distracting new investment. “It would be solved amicably,” he added.
Source: The Himalayan Times
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“Its high time we need to think on how to rejuvenate export,” said Binod Chaudhary, president of Confederation of Nepalese Industry (CNI), during pre-budget interaction with finance minister Dr Ram Sharan Mahat.
“How to attract more investment to fight double digit inflation, rising crude prices, acute food shortage, rising commodity and transportation cost,” he said adding that lack of employment opportunities and dwindling public sector investment are some of the problems that government must address.
Jagdish Agrawal, vicepresident of CNI, presenting a paper admired political parties for starting to take economic issues seriously.
Though, agriculture — a comparative advantage sector — contributes approximately 40 per cent to total GDP, its growth is not satisfactory. “To revive it, commercialisation of farming is a must,” Agrawal added.
“CNI wants a transparent roadmap of investment to achieve double digit growth in the next five years,” CNI suggests, adding that Rs 450 to Rs 500 billion per year will be necessary to achieve the growth target. The massive investment required for achieving it can be shared between private and public sector but the government should take lead in terms of massive allocation to infrastructure development, energy management, transportation and irrigation.
“The funds with Army, Citizen Trust, Provident Fund could be used for development,” CNI suggested.
The dependency on imported fuel should be reduced and alternative to fossile fuel should be given priority, said CNI.
Finance Minister Dr Ram Sharan Mahat agreed on development of alternative sources of energy. “The government has been supporting bio-gas and solar energy,” he said.
“Nepali coffee has more demand in the third country,” Mahat added.
“Cement industry has great potential as big hydro power projects are coming in the future,” he added. CNI has categorised five industry: Cement, textile, petroleum refining, carbon steel and electricity generation.
“Political orientation, social and economic discipline, and labour relation effect investment environment,” the finance minister said, adding that due to transition period there is a lack of social discipline at present.
However, dismal scenario could not hurt public investment and spending on rural infrastructure is also increasing. “Import is increasing that shows market is also expanding,” he said. Except for manufacturing, all other sectors are growing and government can go to extra mile to push export, Mahat added.
He also blamed labour dispute for distracting new investment. “It would be solved amicably,” he added.
Source: The Himalayan Times
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Monday, June 23, 2008
SCB to play constructive role for New Nepal
Sujit Mundul is CEO of Standard Chartered Bank Nepal, one of the leading private sector banks in Nepal. He brings with him rich experience and knowledge of the banking sector of over 30 years. In an interview with Prem Khanal of The Kathmandu Post, Mundul talked about banking in general and the themed week "Blue & Green", which SCB is celebrating from June 22-27. Excerpts:
Would you please elaborate on the purpose of celebrating "Blue & Green" week and also clarify why SCB's focus is on the use of blue and green colors?
After a series of in-depth analyses, the Standard Chartered Group adopted five core values in 2001: Creative, responsive, international, courageous and trustworthy. Our values remain at the heart of our organization and underpin everything we do. It is interesting to note that when the values were launched in 2001, our global staff strength was around 30,000. Today, the number stands at more than 70,000. Our vision for 2011 is to increase our global strength to 120,000.
The main purpose of celebrating "Blue & Green" week is to reinforce our brand and values. It is not just about the colors; it's about what we stand for, about our people and our culture, about how we treat our customers and how we contribute to our communities. One might be surprised why blue and green. If you look carefully at our brand, you will find that the colors symbolize our logo. The colors are simple and they resonate and have many dimensions, e.g., environment, community, advertising, marathons and our business and behavior. Our vision for the brand is simple: We want to double the value of the brand by 2011. We rely on each and every one of our employees to live the brand everyday no matter what they do, and so reinforce it in the hearts and minds of our customers.
Your ambition is to become the world's best international bank leading the way in Asia, Africa and the Middle East. Could you please elaborate on what plans you have to achieve this goal?
We are focusing on quite a few things to achieve our strategic intent in becoming the world's best international bank leading the way in Asia, Africa and the Middle East. Our brand promise is to be the right partner - leading by example. We have defined commitments to our stakeholders, i.e., our customers, people, communities, investors and regulators. If you look at the Asian markets, we have a very strong presence in most of the countries here. We have been in the continent for more than 150 years. We have similar stories for Africa also. We are more focused on these markets than US and Europe. We want to be trusted, caring and dedicated to making a difference to the communities. We are committed to delivering outstanding performance and superior returns to our investors. We want to exhibit exemplary governance and ethics wherever we are and want to be partners to the regulators.
Talking about the domestic banking sector, do you think it is following healthy competitive rules of the game?
Only healthy competition is in the interest of a country which has a very small economic pie and is in the early stages of development. Nepal is not an exception to this. The pricing mechanism currently being adopted by a few players is neither convincing nor transparent as it does not emulate the risk-based pricing model. The secondary market is yet to develop. There aren't yield curves available for various maturities. Suppose you want to extend a long-term mortgage loan, you don't find a reference rate. If you look at our South Asian counterparts like Bangladesh and Sri Lanka, they have already started developing reference rates.
Banks in Nepal have been fixing interest rates for long-term assets on an ad hoc basis undermining the risk-reward principle. It is now time for the central bank to take the lead in formulating a policy to establish yield curves for various maturities in order to develop a proper market. I fear that the rapid increase in the number of players in the financial market may not be sustainable in the medium to long term. The big challenge for us is to focus on quality rather than quantity.
Could you please highlight some of your future plans and activities?
We are shortly going to open two new branches in Birgunj and Narayanghat. We do have an ambitious plan to grow keeping in mind our own vision for 2011. We will focus on expanding our ATM network and introducing various new products both under consumer and wholesale banking. In line with our global strategy, and if we find the right opportunities, we are prepared to grow inorganically through mergers and acquisitions. We aim at maintaining our status
as the best bank in the country.
What do you think Nepal's economy will be like in the future and which sectors do you think have good prospects?
Given the rapidly materializing peace and political stability, I am not only optimistic but also confident about the future and the growth of Nepal's economy. It might take a little longer than expected though. Apart from hydropower - which has a huge value to add - tourism, agriculture, education and health care related sectors have tremendous potential to make Nepal prosperous.
Even though the manufacturing sector has an important role to play, Nepal first needs to focus on developing a sound infrastructure to realize its full potential. Because of the lack of infrastructure, we have not been able to benefit from the Nepal-India trade treaty, which provides us duty and quota-free market access to India. The need of the hour is to develop a proper policy on capital formation either by attracting FDIs or by recouping the capital that flowed out in the past. SCB Nepal is keen to play a constructive role in accelerating the pace of development and rebuilding the economy towards forming a New Nepal.
Source: eKantipur
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Would you please elaborate on the purpose of celebrating "Blue & Green" week and also clarify why SCB's focus is on the use of blue and green colors?
After a series of in-depth analyses, the Standard Chartered Group adopted five core values in 2001: Creative, responsive, international, courageous and trustworthy. Our values remain at the heart of our organization and underpin everything we do. It is interesting to note that when the values were launched in 2001, our global staff strength was around 30,000. Today, the number stands at more than 70,000. Our vision for 2011 is to increase our global strength to 120,000.
The main purpose of celebrating "Blue & Green" week is to reinforce our brand and values. It is not just about the colors; it's about what we stand for, about our people and our culture, about how we treat our customers and how we contribute to our communities. One might be surprised why blue and green. If you look carefully at our brand, you will find that the colors symbolize our logo. The colors are simple and they resonate and have many dimensions, e.g., environment, community, advertising, marathons and our business and behavior. Our vision for the brand is simple: We want to double the value of the brand by 2011. We rely on each and every one of our employees to live the brand everyday no matter what they do, and so reinforce it in the hearts and minds of our customers.
Your ambition is to become the world's best international bank leading the way in Asia, Africa and the Middle East. Could you please elaborate on what plans you have to achieve this goal?
We are focusing on quite a few things to achieve our strategic intent in becoming the world's best international bank leading the way in Asia, Africa and the Middle East. Our brand promise is to be the right partner - leading by example. We have defined commitments to our stakeholders, i.e., our customers, people, communities, investors and regulators. If you look at the Asian markets, we have a very strong presence in most of the countries here. We have been in the continent for more than 150 years. We have similar stories for Africa also. We are more focused on these markets than US and Europe. We want to be trusted, caring and dedicated to making a difference to the communities. We are committed to delivering outstanding performance and superior returns to our investors. We want to exhibit exemplary governance and ethics wherever we are and want to be partners to the regulators.
Talking about the domestic banking sector, do you think it is following healthy competitive rules of the game?
Only healthy competition is in the interest of a country which has a very small economic pie and is in the early stages of development. Nepal is not an exception to this. The pricing mechanism currently being adopted by a few players is neither convincing nor transparent as it does not emulate the risk-based pricing model. The secondary market is yet to develop. There aren't yield curves available for various maturities. Suppose you want to extend a long-term mortgage loan, you don't find a reference rate. If you look at our South Asian counterparts like Bangladesh and Sri Lanka, they have already started developing reference rates.
Banks in Nepal have been fixing interest rates for long-term assets on an ad hoc basis undermining the risk-reward principle. It is now time for the central bank to take the lead in formulating a policy to establish yield curves for various maturities in order to develop a proper market. I fear that the rapid increase in the number of players in the financial market may not be sustainable in the medium to long term. The big challenge for us is to focus on quality rather than quantity.
Could you please highlight some of your future plans and activities?
We are shortly going to open two new branches in Birgunj and Narayanghat. We do have an ambitious plan to grow keeping in mind our own vision for 2011. We will focus on expanding our ATM network and introducing various new products both under consumer and wholesale banking. In line with our global strategy, and if we find the right opportunities, we are prepared to grow inorganically through mergers and acquisitions. We aim at maintaining our status
as the best bank in the country.
What do you think Nepal's economy will be like in the future and which sectors do you think have good prospects?
Given the rapidly materializing peace and political stability, I am not only optimistic but also confident about the future and the growth of Nepal's economy. It might take a little longer than expected though. Apart from hydropower - which has a huge value to add - tourism, agriculture, education and health care related sectors have tremendous potential to make Nepal prosperous.
Even though the manufacturing sector has an important role to play, Nepal first needs to focus on developing a sound infrastructure to realize its full potential. Because of the lack of infrastructure, we have not been able to benefit from the Nepal-India trade treaty, which provides us duty and quota-free market access to India. The need of the hour is to develop a proper policy on capital formation either by attracting FDIs or by recouping the capital that flowed out in the past. SCB Nepal is keen to play a constructive role in accelerating the pace of development and rebuilding the economy towards forming a New Nepal.
Source: eKantipur
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ADB explores ways to catalyze investment
The Asian Development Bank (ADB) and World Economic Forum (WEF) brought together leading private sector and development partners for a roundtable discussion to explore ways to catalyze private sector investment in developing Asia.
The Financing for Development Roundtable, held at ADB Headquarters in Manila offered senior executives of private sector financial institutions the chance to interact with WEF and ADB’s management on WEF’s Financing for Development Initiative.
The primary focus of the Roundtable was how ADB could expand partnerships with the private sector to leverage development capital and catalyze greater private sector investment in the Asia Pacific region.
Participants also discussed ways to expand risk mitigation activities and enhance local currency finance, states a press release.
“This roundtable is an important opportunity for ADB to hear directly from the private sector on how we can work more closely together to close the widening development financing gap in Asia,” said Ursula SchaeferPreuss, ADB vice-pres ident for Knowledge Management and Sustainable Development. “ADB has set a goal of about 50 per cent of operations to be in private sector development and private sector operations by 2020 and we need to cultivate greater public-private partnerships to achieve that goal.” The Financing for Development Initiative is a twoyear long initiative aimed at evolving a public-private financing partnership between multilateral development banks (MDB), bilateral development finance institutions and global investment and commercial financial institutions. Several joint roundtables with MDBs have taken place this year including a WEF-sponsored seminar at ADB’s annual meeting in Madrid in May.
Key topics of discussion at the Manila roundtable included how public-private partnerships are evolving in Asia, ways to enhance the overall investment climate in the region, the development of new financial products and modalities for publicprivate partnerships, scaling up of guarantees and other risk mitigation products and the development of local capital markets.
WEF is an independent international organisation committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.
Source: THT
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The Financing for Development Roundtable, held at ADB Headquarters in Manila offered senior executives of private sector financial institutions the chance to interact with WEF and ADB’s management on WEF’s Financing for Development Initiative.
The primary focus of the Roundtable was how ADB could expand partnerships with the private sector to leverage development capital and catalyze greater private sector investment in the Asia Pacific region.
Participants also discussed ways to expand risk mitigation activities and enhance local currency finance, states a press release.
“This roundtable is an important opportunity for ADB to hear directly from the private sector on how we can work more closely together to close the widening development financing gap in Asia,” said Ursula SchaeferPreuss, ADB vice-pres ident for Knowledge Management and Sustainable Development. “ADB has set a goal of about 50 per cent of operations to be in private sector development and private sector operations by 2020 and we need to cultivate greater public-private partnerships to achieve that goal.” The Financing for Development Initiative is a twoyear long initiative aimed at evolving a public-private financing partnership between multilateral development banks (MDB), bilateral development finance institutions and global investment and commercial financial institutions. Several joint roundtables with MDBs have taken place this year including a WEF-sponsored seminar at ADB’s annual meeting in Madrid in May.
Key topics of discussion at the Manila roundtable included how public-private partnerships are evolving in Asia, ways to enhance the overall investment climate in the region, the development of new financial products and modalities for publicprivate partnerships, scaling up of guarantees and other risk mitigation products and the development of local capital markets.
WEF is an independent international organisation committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.
Source: THT
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Short-term interest rates up
Short-term interest rates up In the recent months, the short-term interest rates have been increasing.
However, some commercial banks are still providing interest rate of two per cent for such deposits. The interest rates on fixed deposits have also increased. The interest rate on fixed deposits of more than two years increased to 6.75 per cent in mid-April 2008 from 5.5 per cent in mid-July 2007.
The minimum interest rates on such deposits increased to 2.75 per cent in mid-April 2008 from 2.5 per cent in mid-July 2007, states a Nepal Rastra bank (NRB) report.
Interest rates on lending have also changed marginally. Minimum interest rates on loans to the industrial sector declined to seven per cent in mid-April 2008 from eight per cent in mid-July 2007 along with a decline in its maximum interest rates by 50 basis points to 13 per cent in mid-April.
Likewise, maximum interest rates on agriculture credit declined by 100 basis points to 12 per cent. Interest rates on commercial credit and overdraft declined by 50 basis points to 13.5 per cent in mid-April.
Compared to the previous year, the weighted average monthly 91-day Treasury bill rate also stood at 4.07 per cent in mid-April 2008. Such a rate was 1.85 per cent in mid-April 2007.
Similarly, the weighted average monthly inter bank rate remained at 2.69 per cent in mid-April 2008 in comparison to 1.69 per cent a year ago, states the report of first nine months.
Some changes in the interest rates of deposits and credit have also been witnessed lately. Maximum interest rate on saving deposits increased to 6.5 per cent in mid-April 2008 from five per cent in mid-July 2007.
In the first nine months of 2007-08, the liquid funds of commercial banks increased by 11.8 percent amounting to Rs 72.90 billion. Such funds had increased by 3.6 per cent amounting to Rs 65.20 billion in the same period of last year. Of the liquid funds, commercial banks’ balance held abroad increased by four per cent to Rs 35.28 billion.
Likewise, commercial banks’ cash in hand stood at Rs 9.38 billion and balances with the NRB increased by 2.2 per cent to Rs 23.37 billion in the review period.
Including commercial banks’ holding of government securities of Rs 64.79 billion, total liquid assets of commercial banks reached Rs 137.70 billion as in midApril 2008, showing a growth of 13.3 per cent.
Such liquid assets were Rs 121.50 billion as in midApril 2007. Considering the public deposit of Rs 390 billion with the commercial banks, the liquid assets/deposits ratio of the commercial banks stood at 35.3 per cent in the review period.
A net liquidity of Rs 65.98 billion was injected through a net purchase of $1.03 million from commercial banks through foreign exchange intervention in the review period. A net liquidity of Rs 47.96 billion had been injected through the net purchase of $664.2 million from commercial banks in the previous year.
Indian Currency (IC) purchase has also been increasing. In the first nine months of 2007-08, the NRB purchased 41.82 billion IC equivalent to Rs 66.9 billion by selling $1050 million.
During the same period of the previous year, a total of Rs 40.97 billion equivalent IC was purchased through the sale of $570 million.
A widening current account deficit with India along with a higher payment by Nepal Oil Corporation to Indian Oil Corporation accounted for such an increase in purchase of IC in the review period. The sale of the US dollar to purchase IC remained higher than the purchase of the US dollar from commercial banks in the review period.
Source: THT
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However, some commercial banks are still providing interest rate of two per cent for such deposits. The interest rates on fixed deposits have also increased. The interest rate on fixed deposits of more than two years increased to 6.75 per cent in mid-April 2008 from 5.5 per cent in mid-July 2007.
The minimum interest rates on such deposits increased to 2.75 per cent in mid-April 2008 from 2.5 per cent in mid-July 2007, states a Nepal Rastra bank (NRB) report.
Interest rates on lending have also changed marginally. Minimum interest rates on loans to the industrial sector declined to seven per cent in mid-April 2008 from eight per cent in mid-July 2007 along with a decline in its maximum interest rates by 50 basis points to 13 per cent in mid-April.
Likewise, maximum interest rates on agriculture credit declined by 100 basis points to 12 per cent. Interest rates on commercial credit and overdraft declined by 50 basis points to 13.5 per cent in mid-April.
Compared to the previous year, the weighted average monthly 91-day Treasury bill rate also stood at 4.07 per cent in mid-April 2008. Such a rate was 1.85 per cent in mid-April 2007.
Similarly, the weighted average monthly inter bank rate remained at 2.69 per cent in mid-April 2008 in comparison to 1.69 per cent a year ago, states the report of first nine months.
Some changes in the interest rates of deposits and credit have also been witnessed lately. Maximum interest rate on saving deposits increased to 6.5 per cent in mid-April 2008 from five per cent in mid-July 2007.
In the first nine months of 2007-08, the liquid funds of commercial banks increased by 11.8 percent amounting to Rs 72.90 billion. Such funds had increased by 3.6 per cent amounting to Rs 65.20 billion in the same period of last year. Of the liquid funds, commercial banks’ balance held abroad increased by four per cent to Rs 35.28 billion.
Likewise, commercial banks’ cash in hand stood at Rs 9.38 billion and balances with the NRB increased by 2.2 per cent to Rs 23.37 billion in the review period.
Including commercial banks’ holding of government securities of Rs 64.79 billion, total liquid assets of commercial banks reached Rs 137.70 billion as in midApril 2008, showing a growth of 13.3 per cent.
Such liquid assets were Rs 121.50 billion as in midApril 2007. Considering the public deposit of Rs 390 billion with the commercial banks, the liquid assets/deposits ratio of the commercial banks stood at 35.3 per cent in the review period.
A net liquidity of Rs 65.98 billion was injected through a net purchase of $1.03 million from commercial banks through foreign exchange intervention in the review period. A net liquidity of Rs 47.96 billion had been injected through the net purchase of $664.2 million from commercial banks in the previous year.
Indian Currency (IC) purchase has also been increasing. In the first nine months of 2007-08, the NRB purchased 41.82 billion IC equivalent to Rs 66.9 billion by selling $1050 million.
During the same period of the previous year, a total of Rs 40.97 billion equivalent IC was purchased through the sale of $570 million.
A widening current account deficit with India along with a higher payment by Nepal Oil Corporation to Indian Oil Corporation accounted for such an increase in purchase of IC in the review period. The sale of the US dollar to purchase IC remained higher than the purchase of the US dollar from commercial banks in the review period.
Source: THT
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