Nepal Stock Exchange Ltd (Nepse) index has shed 37.47 points to close this week's trading at 881.86 points from the last weeks' closing of 919.33 points. Earlier last week, Nepse had lost only 14.64 points to finish at 919.33 points. Though the week witnessed only two-day session this week unlike a regular five-day session, the Nespe lost 36.29 points on Monday, the second day of the trading due to book close of some of the financial institutions. Some of the financial institutions have already declared their bonus and rights shares and other are in the process pushing the market towards more uncertainty. The week started in the red with a loss of only 1. 18 points to 918.15 points on Sunday and it further dropped by 36.29 points to close the week at 881.86 points on Monday since the remaining days of the week are Tihar holidays. Shares of 54 companies of the total listed companies saw their transactions on Monday. Last week, Kist Merchant Banking and Finance traded shares worth Rs 522.71 million to become the largest company in terms of volume of transactions and it had been the largest gainer in terms of monetary value also.
Source: THT
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Saturday, November 1, 2008
Wednesday, October 29, 2008
DCBL proposes additional rights share
The 95th BOD meeting of the company dated 2065-07-08 has decided to propose 2 for 1 rights share is subject to be approved from upcoming AGM of the company. Being a first commercial bank upgrading from development bank in Nepal after issue 1 for addition 3 rights share on fiscal year 2064-65 increasing its paid-up capital to Rs. 1.107 billion it has commenced its commercial banking activities from 25th May 2008. Till then the unaudited profit for the bank crossed Rs. 58.74 million in fiscal year 2064-65. The share price of DCBL however might have flown from insider information increased by 6.25 percent on Friday. The rally is expected to continue for a week. The green signal appeared for today's trade all the day closed at Rs. 885 from 16249 shares.
Source: Jamb News Service
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Source: Jamb News Service
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Sunrise to go public
Promoters will inject Rs 170 million into Sunrise Bank, the 23rd commercial bank. This was decided by the bank's first annual general meeting. The bank posted an operating profit of Rs 24 million in the first quarter of the current fical year. The bank will also go public within a month, the AGM decided. The bank collected Rs 6.60 billion.
Source: THT
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Source: THT
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Citizen Bank declares 1Q profit of Rs. 35.6m
Citizen Bank Ltd. this week announced an operating profit of Rs. 35.6 million in first quarter of current fiscal year. Speaking during the second general meeting of the bank, Chairman Dr. Shankar Sharma informed that the bank would increase the number of branches to 30 with at least a branch in each zone in three years. In a statement, the bank said it had donated Rs. 500,000 for relief of flood victims and Rs 5,000 to journalist Gajendra Budhathoki who was seriously injuries in an accident recently.
Source: Ekantipur
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Source: Ekantipur
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Laxmi Bank adds branch in Itahari
Laxmi Bank has opened a branch in Itahari Chowk of Sunsari district. A statement issued by the bank said the bank's 15th branch was opened to reinforce its presence in the Eastern region. The bank has already opened branches in Biratnagar, Itahari and Damak. The bank will offer a full range of retail banking services lie saving schemes, mortgage and SME loans, life insurance, credit cards, bill payment and e-banking services.
Source: Ekantipur
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Source: Ekantipur
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CRR increase to stay for now: NRB
Acting governor of Nepal Rastra Bank Krishna Bahadur Manandhar has ruled out any immediate reversal of the increase in Cash Reserve Ratio (CRR) amid renewed pressure from bankers to withdraw the decision.
"Reliable indicators show that the market has enough liquidity at the moment. Thus the recent rise in CRR will have no immediate adverse effect on the market," Manandhar said at an interaction organised by the Nepal Chamber of Commerce (NCC) entitled "Global Economic Crisis and its Impact on the Nepalese Economy".
Governor Manandhar further said that though this posed no direct risk to the domestic economy, he urged banks to be cautious about big borrowers who might have made heavy investments in foreign stock markets illegally.
"It is likely that some of them might have lost hefty sums in the recent share market crash, thereby eroding their capacity to repay loans and putting lending banks in trouble," he said.
Nepal Bankers' Association President Radhesh Pant urged the central bank to rethink its recent decision to raise CRR to prevent any possible crisis that might strike the domestic economy.
"We believe there is room for review of the decision and lowering CRR," he said.
Pant added that the recent drop in commodity prices, which has brought down the value of inventories, might create problems for banks that have invested in commodities. He also assured the gathering that the deposits made by the Nepali banking system in foreign banks were completely safe.
Finance secretary Rameshore Khanal reiterated that the ongoing global financial turmoil would not have any direct impact on the domestic economy; but warned that if the crisis continued, it might delay major investment projects in sectors like hydropower, which need funding from international financial markets.
Khanal said that despite being a U.S.-focused export industry, Nepal's readymade garment industry was less likely to be affected by the present turmoil because its products were targeted at lower-end consumers.
"However, demand for woollen products, which are generally consumed by higher-end consumers, might fall," he said.
Dr. Chiranjibi Nepal, the chairman of the Securities Board of Nepal, said that remittance income, which is one of the pillars of Nepal's economy, might get into trouble if construction activities in the Middle East slowed down due to the current financial upheaval.
He also stressed that a liberal economic policy was still the best instrument to secure the path to prosperity, and added that the present crisis was only a product of a slackening in the monetary mechanism of the financial sector.
Kishor Kumar Agrawal of NCC presented a paper, and concluded that though the present disruption would have no direct impact on the domestic economy, the government seriously needed to work on bringing investor-friendly policies and boosting investor confidence.
Source: Jamb News Service
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"Reliable indicators show that the market has enough liquidity at the moment. Thus the recent rise in CRR will have no immediate adverse effect on the market," Manandhar said at an interaction organised by the Nepal Chamber of Commerce (NCC) entitled "Global Economic Crisis and its Impact on the Nepalese Economy".
Governor Manandhar further said that though this posed no direct risk to the domestic economy, he urged banks to be cautious about big borrowers who might have made heavy investments in foreign stock markets illegally.
"It is likely that some of them might have lost hefty sums in the recent share market crash, thereby eroding their capacity to repay loans and putting lending banks in trouble," he said.
Nepal Bankers' Association President Radhesh Pant urged the central bank to rethink its recent decision to raise CRR to prevent any possible crisis that might strike the domestic economy.
"We believe there is room for review of the decision and lowering CRR," he said.
Pant added that the recent drop in commodity prices, which has brought down the value of inventories, might create problems for banks that have invested in commodities. He also assured the gathering that the deposits made by the Nepali banking system in foreign banks were completely safe.
Finance secretary Rameshore Khanal reiterated that the ongoing global financial turmoil would not have any direct impact on the domestic economy; but warned that if the crisis continued, it might delay major investment projects in sectors like hydropower, which need funding from international financial markets.
Khanal said that despite being a U.S.-focused export industry, Nepal's readymade garment industry was less likely to be affected by the present turmoil because its products were targeted at lower-end consumers.
"However, demand for woollen products, which are generally consumed by higher-end consumers, might fall," he said.
Dr. Chiranjibi Nepal, the chairman of the Securities Board of Nepal, said that remittance income, which is one of the pillars of Nepal's economy, might get into trouble if construction activities in the Middle East slowed down due to the current financial upheaval.
He also stressed that a liberal economic policy was still the best instrument to secure the path to prosperity, and added that the present crisis was only a product of a slackening in the monetary mechanism of the financial sector.
Kishor Kumar Agrawal of NCC presented a paper, and concluded that though the present disruption would have no direct impact on the domestic economy, the government seriously needed to work on bringing investor-friendly policies and boosting investor confidence.
Source: Jamb News Service
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Woo NRN investment, govt urged
essmen have asked the government to create a conducive environment to increase investments in Nepal by Non-Resident Nepali (NRN) communities. They also expressed dissatisfaction over the delay by the government in formulating related regulations despite the enforcement of the NRN Act which was holding up investments.
"An economic revolution can't be attained only through slogans and lip service. We want words translated into action. The government should take the initiative to create favourable conditions to encourage national business communities and NRNs to invest," Surendra Bir Malakar, president of the Nepal Chamber of Commerce, said at an interaction in the capital Friday.
He blamed political instability, a slow judicial process and rampant corruption as the major roadblocks to boosting investment in the country.
He also exhorted the government to maintain coordination between investment and export planning, waive dual taxation on dividends and encourage the private sector to increase productivity.
Dinesh Chandra Gupta, executive director of the Trade Promotion Centre, urged NRNs to invest in textiles, spinning mills, chemicals, cement, pharmaceuticals, vehicle production, electricals and electronics and agricultural inputs as Nepal has been spending massive amounts of money on importing these goods. "Investors can benefit from their investments if they put money in these products as they are in high demand in the country," said Gupta at the programme entitled "Future Investment in Nepal and its Potentiality".
Dev Man Hirachan, vice president of the NRN-International Coordination Council, underscored the importance of creating employment opportunities in the country to discourage youths from flocking overseas to do low-grade jobs.
"We can bring down the NRN population by boosting economic growth for which an investment-friendly environment is vital," he said.
Source: eKantipur
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"An economic revolution can't be attained only through slogans and lip service. We want words translated into action. The government should take the initiative to create favourable conditions to encourage national business communities and NRNs to invest," Surendra Bir Malakar, president of the Nepal Chamber of Commerce, said at an interaction in the capital Friday.
He blamed political instability, a slow judicial process and rampant corruption as the major roadblocks to boosting investment in the country.
He also exhorted the government to maintain coordination between investment and export planning, waive dual taxation on dividends and encourage the private sector to increase productivity.
Dinesh Chandra Gupta, executive director of the Trade Promotion Centre, urged NRNs to invest in textiles, spinning mills, chemicals, cement, pharmaceuticals, vehicle production, electricals and electronics and agricultural inputs as Nepal has been spending massive amounts of money on importing these goods. "Investors can benefit from their investments if they put money in these products as they are in high demand in the country," said Gupta at the programme entitled "Future Investment in Nepal and its Potentiality".
Dev Man Hirachan, vice president of the NRN-International Coordination Council, underscored the importance of creating employment opportunities in the country to discourage youths from flocking overseas to do low-grade jobs.
"We can bring down the NRN population by boosting economic growth for which an investment-friendly environment is vital," he said.
Source: eKantipur
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Finance Minister walks budget talk:Government to regulate
By Laxmi Maharjan
Finance Minister Dr Baburam Bhattarai seems to walk the budget talk. It may be recalled that the Ministry of Finance (MoF) had promised to regulate sale of alcohol during this year's budget. And a month on, the MoF is in the final phase to formulate directives for its ambitious plan.
The MoF is working in tandem with the Home Ministry. Shankar Prasad Adhikari, joint secretary, monitoring division, MoF, said the strategy would be ready by October 31. "Two separate committees have been formed. They are headed by the director general and deputy director general, Inland Revenue Department. Each of these committees will also have representatives from Home and Finance ministries, Nepal Police, National Vigilance Centre and alcohol manufacturers' organisations," explained the senior official. The MoF has notified the shopkeepers to either sell the existing stock or return it to distributors by November 15.
"The regulation will come into effect from November 16. It will forbid both sale and consumption of liquor except at designated places. For instance, a departmental store will have a separate enclosure for alcohol," he added. According to Adhikari, the crackdown on the sale of hard drinks is in keeping with Home Minister Bamdev Gautam's pledge. Drinking is perceived to be one of the major causes behind the soaring crime rate and other social ills.
The government also plans to strictly monitor the drinking age. From now on, consumers have to furnish their citizenship certificates while buying alcohol. Substitutes to citizenship certificates, too, are under consideration. "The alcohol manufacturers may protest the move. But we are confident of cooperation from the civil society," said Adhikari.
Meanwhile, Mod Raj Dotel, spokesperson, Home Ministry, expressed "complete ignorance" about the plan to regulate sale of alcohol. The spokesperson is also unaware of the coordination between his ministry and the MoF.
Source: THT
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Finance Minister Dr Baburam Bhattarai seems to walk the budget talk. It may be recalled that the Ministry of Finance (MoF) had promised to regulate sale of alcohol during this year's budget. And a month on, the MoF is in the final phase to formulate directives for its ambitious plan.
The MoF is working in tandem with the Home Ministry. Shankar Prasad Adhikari, joint secretary, monitoring division, MoF, said the strategy would be ready by October 31. "Two separate committees have been formed. They are headed by the director general and deputy director general, Inland Revenue Department. Each of these committees will also have representatives from Home and Finance ministries, Nepal Police, National Vigilance Centre and alcohol manufacturers' organisations," explained the senior official. The MoF has notified the shopkeepers to either sell the existing stock or return it to distributors by November 15.
"The regulation will come into effect from November 16. It will forbid both sale and consumption of liquor except at designated places. For instance, a departmental store will have a separate enclosure for alcohol," he added. According to Adhikari, the crackdown on the sale of hard drinks is in keeping with Home Minister Bamdev Gautam's pledge. Drinking is perceived to be one of the major causes behind the soaring crime rate and other social ills.
The government also plans to strictly monitor the drinking age. From now on, consumers have to furnish their citizenship certificates while buying alcohol. Substitutes to citizenship certificates, too, are under consideration. "The alcohol manufacturers may protest the move. But we are confident of cooperation from the civil society," said Adhikari.
Meanwhile, Mod Raj Dotel, spokesperson, Home Ministry, expressed "complete ignorance" about the plan to regulate sale of alcohol. The spokesperson is also unaware of the coordination between his ministry and the MoF.
Source: THT
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Nepse plunges, investors quake
Investors should think twice before getting nervous and selling their shares even though the Nepal Stock Exchange (Nepse) index is on a bearish bent. The market seems to be jittery as Nespe has been continuously slumping and has lost 39.68 points this week.
Nepse — after a four-day session this week unlike the regular five-day session a week — closed at 933.97 points on Thursday from 973.65 points — the last closing.
However, when the market opened after a week-long Dashain holiday it could not recover and instead shed 4.09 points on Sunday, the first day of the trading to touch another low of 969.56 points. It dropped 12.23 points on Monday to slump to 957.33 points. Nepse did not see any transaction on Tuesday due to the holiday. However, on Wednesday, it witnessed a loss of 19.02 points to 938.39 points and closed at 933.97 points on Thursday, the last day of trading at Nepse.
Almost all major groups including banking, financial institutions and other ventures gave dismal performances, leading to the overall fall in the Nepse index.
The float index also plunged to 92.5 points on Thursday, the last day of trading. Meanwhile, market pundits feel that the investors' confidence might revive if the market starts surging, albeit marginally, before Tihar. There are just twelve more days to go for the festival.
Source: THT
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Nepse — after a four-day session this week unlike the regular five-day session a week — closed at 933.97 points on Thursday from 973.65 points — the last closing.
However, when the market opened after a week-long Dashain holiday it could not recover and instead shed 4.09 points on Sunday, the first day of the trading to touch another low of 969.56 points. It dropped 12.23 points on Monday to slump to 957.33 points. Nepse did not see any transaction on Tuesday due to the holiday. However, on Wednesday, it witnessed a loss of 19.02 points to 938.39 points and closed at 933.97 points on Thursday, the last day of trading at Nepse.
Almost all major groups including banking, financial institutions and other ventures gave dismal performances, leading to the overall fall in the Nepse index.
The float index also plunged to 92.5 points on Thursday, the last day of trading. Meanwhile, market pundits feel that the investors' confidence might revive if the market starts surging, albeit marginally, before Tihar. There are just twelve more days to go for the festival.
Source: THT
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SCB suspension notice
The stock of Standard Chartered Bank Ltd. has been suspended for being out of range. The 22nd AGM of the company is being held on 25-Nov-2008 for which it has announced its book close date from 27-Oct-2008 to 25-Nov-2008 which is the main reason behind the catastrophic downfall of the same stock.
Source: Jamb News Service
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Source: Jamb News Service
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Insurance market lacks innovative products
Sunil Devkota, the general manager of United Insurance Co (UIC) Nepal, holds a Master of Business Administration degree from Kathmandu University. Devkota, 31, is also a chartered accountant and has already worked in a committee constituted to draft an on-site inspection manual for the supervision of insurance companies. He recently talked in details with Prabhakar Ghimire of The Kathamandu Post about the prospects and problems of the Non-life Insurance sector of Nepal.
Excerpts:
Tell us about the performance of UIC Nepal over the years.
We performed very well during the initial years after UIC started operation in 1993 due mainly to a low level of competition as there were very few players at that time. However, we had to face a tough time afterwards for a few years. Nevertheless, we have been able to perform satisfactorily in the last two fiscal years. UIC earned a profit of Rs. 5.8 million during Fiscal Year 2006/07 while the profit volume increased by almost three folds to Rs. 16 million in Fiscal Year 2007/08. Turnover also shot up to Rs. 189.2 million during Fiscal Year 2007/08 from Rs. 151.4 recorded a year earlier. We are planning to increase our paid up capital to Rs. 100 million from the existing Rs. 60 million by distributing bonus shares and rights issues.
Over the period of a year, we have added branches in Birgunj and Hetauda bringing the total number of branches to five. We are planning to open five more branches, in Damak, Birtamod, Narayanghat, Nepalgunj and Dhangadhi.
How is the Non-life Insurance business growing in Nepal?
There are currently 18 Non-life Insurance companies in the market. Annual growth of this sector stands at about 20 to 30 percent in terms of insured amount. However, only a small section of the insurance market's potential has been explored due to lack of awareness among people about the importance of insurance. Insurance companies are also not smart enough to bring innovative products. We (Non-life Insurance companies) are unnecessarily concentrated in certain markets thereby breeding unfair competition there. Fighting for a piece of this small pie has kept us so busy that we have not been introducing new innovative products that can contribute to the expansion of the existing market. Huge chunk of potential market is untapped as a majority of the population is still unaware of insurance products.
Do you see any prospect of expansion?
Definitely, there is a good prospect for insurance companies in Nepal. We can see a 100 percent annual growth rate in insurance business if the government comes up with concrete policies that encourage people toward insurance products. We also need to explore new markets in addition to expanding the existing ones in urban areas with innovative products.
What do you think should be done to widen people's access to insurance services?
The government should instruct insurance companies to expand their services to rural areas to ensure access for the larger chunk of people to insurance services. Insurance companies themselves should explore new markets and introduce new products as per the changing market trend. For example, Household Insurance in Kathmandu Valley is at a very low scale, even though this area falls under the seismic zone. Consumers are not aware of this nor have insurance companies been able to boost up this policy among the Valley's residents. Likewise, health insurance, cattle insurance and crop insurance are also areas that can be expanded by raising awareness among people. For this, the Insurance Board should grant permissions without hassle.
What are the major problems seen in this sectors?
It is difficult to convince reinsurers about the viability of new insurance products due to lack of convincing data about the insurance market. On the other hand, insurance companies have to go through a lengthy process to get permission from Insurance Board to introduce new products. Disobeying directives from the board is becoming a trend among insurance companies. If Non-life Insurance is to be expanded among the poor masses, VAT should be waived like in life insurance policies.
The trend of business houses opening insurance companies to insure their own businesses has proved detrimental, as it has discouraged the growth of the insurance sector. We need a strong regulation to bar insurance companies from insuring clients who are directly related to the promoters' companies.
Do you have any plans for introducing new products for UIC?
On the back of the growing number of shopping malls in urban areas including Kathmandu Valley, we are coming up with Parking Insurance Policy which will cover cases of accidents and thefts inside underground parking areas.
Customers of such malls are in need of insurance of their vehicles and properties kept in such parking areas, as concerned parking service contractors and malls refuse to own the responsibility of theft or damage of vehicles and compensate the customers.
Source: eKantipur
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Excerpts:
Tell us about the performance of UIC Nepal over the years.
We performed very well during the initial years after UIC started operation in 1993 due mainly to a low level of competition as there were very few players at that time. However, we had to face a tough time afterwards for a few years. Nevertheless, we have been able to perform satisfactorily in the last two fiscal years. UIC earned a profit of Rs. 5.8 million during Fiscal Year 2006/07 while the profit volume increased by almost three folds to Rs. 16 million in Fiscal Year 2007/08. Turnover also shot up to Rs. 189.2 million during Fiscal Year 2007/08 from Rs. 151.4 recorded a year earlier. We are planning to increase our paid up capital to Rs. 100 million from the existing Rs. 60 million by distributing bonus shares and rights issues.
Over the period of a year, we have added branches in Birgunj and Hetauda bringing the total number of branches to five. We are planning to open five more branches, in Damak, Birtamod, Narayanghat, Nepalgunj and Dhangadhi.
How is the Non-life Insurance business growing in Nepal?
There are currently 18 Non-life Insurance companies in the market. Annual growth of this sector stands at about 20 to 30 percent in terms of insured amount. However, only a small section of the insurance market's potential has been explored due to lack of awareness among people about the importance of insurance. Insurance companies are also not smart enough to bring innovative products. We (Non-life Insurance companies) are unnecessarily concentrated in certain markets thereby breeding unfair competition there. Fighting for a piece of this small pie has kept us so busy that we have not been introducing new innovative products that can contribute to the expansion of the existing market. Huge chunk of potential market is untapped as a majority of the population is still unaware of insurance products.
Do you see any prospect of expansion?
Definitely, there is a good prospect for insurance companies in Nepal. We can see a 100 percent annual growth rate in insurance business if the government comes up with concrete policies that encourage people toward insurance products. We also need to explore new markets in addition to expanding the existing ones in urban areas with innovative products.
What do you think should be done to widen people's access to insurance services?
The government should instruct insurance companies to expand their services to rural areas to ensure access for the larger chunk of people to insurance services. Insurance companies themselves should explore new markets and introduce new products as per the changing market trend. For example, Household Insurance in Kathmandu Valley is at a very low scale, even though this area falls under the seismic zone. Consumers are not aware of this nor have insurance companies been able to boost up this policy among the Valley's residents. Likewise, health insurance, cattle insurance and crop insurance are also areas that can be expanded by raising awareness among people. For this, the Insurance Board should grant permissions without hassle.
What are the major problems seen in this sectors?
It is difficult to convince reinsurers about the viability of new insurance products due to lack of convincing data about the insurance market. On the other hand, insurance companies have to go through a lengthy process to get permission from Insurance Board to introduce new products. Disobeying directives from the board is becoming a trend among insurance companies. If Non-life Insurance is to be expanded among the poor masses, VAT should be waived like in life insurance policies.
The trend of business houses opening insurance companies to insure their own businesses has proved detrimental, as it has discouraged the growth of the insurance sector. We need a strong regulation to bar insurance companies from insuring clients who are directly related to the promoters' companies.
Do you have any plans for introducing new products for UIC?
On the back of the growing number of shopping malls in urban areas including Kathmandu Valley, we are coming up with Parking Insurance Policy which will cover cases of accidents and thefts inside underground parking areas.
Customers of such malls are in need of insurance of their vehicles and properties kept in such parking areas, as concerned parking service contractors and malls refuse to own the responsibility of theft or damage of vehicles and compensate the customers.
Source: eKantipur
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Invest, FM prods pvt sector
Finance Minister Dr Baburam Bhattarai today urged the private sector to invest more without any doubt. "The government is ready to provide security to the investments," he said, addressing a post-budget interaction organised by the Federation of Nepalese Chambers of Commerce and Industries(FNCCI) here today.
He added that the aim of the budget was to promote the private sector. "This is a step towards the development of national capitalism and a growth in the economy. Private sector should not get frightened regarding property nationalisation. Instead, it should start making investments, the government is there to provide a guarantee," he assured. Pointing to current global fiscal crisis, FNCCI president Kush Kumar Joshi urged the government to work out preventive measures to avoid the impact of the crisis in Nepal and encourage internal investments.
Highlighting the negative side of the budget and the impact of economic recession affecting exports, Joshi said, "The policy regarding achievement of targeted revenue has failed to attract the private sector. Concern regarding the export of Nepali carpet, readymade garment, pashmina and leather products was lost and no kind of promotional measures were formulated by the government even though our export sector is losing its grip in the international market due to the economic recession." National Planning Commission vice-chairman Prof Dr Pitamber Sharma warned that the economic crisis in the US could have its impact on Nepal and urged the government to start working on short and long term precautionary measures. Joshi called for bringing new goods and services under the ambit of Inland Revenue and imposing custom fee on additional goods. He also suggested forming a revenue consultancy committee to conduct policy level discussions. However, Dr Bhattarai said, "People in the private sector are themselves confused about what they really want. Therefore, the gap should be bridged and whatever kind of problems they are having they should feel free to raise the issue of missing points and the improvements they want. Detailed discussion on this can be held later." FNCCI's tax and revenue committee chairperson Pradeep Man Vaidhya said, "There must be door-to-door service so that tax payers feel encouraged and honoured. The government should also provide security to tax payers." Vaidhya also said that it was not the right time to charge property tax and that there shouuld be thorough homework before that.
While Dr Bhattarai assured tax payers would get due recognition, acting secretary to the Ministry of Finance (MoF) Krishna Hari Baskota said, "The budget has not ignored the private sector. Rather, the government believes in the internal market and internal investment which is the driving factor for development."
"Study on VAT and other aspects is going on. Instead of carping, the private sector should look at the improvements made by the budget," Baskota added.
Source: THT
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He added that the aim of the budget was to promote the private sector. "This is a step towards the development of national capitalism and a growth in the economy. Private sector should not get frightened regarding property nationalisation. Instead, it should start making investments, the government is there to provide a guarantee," he assured. Pointing to current global fiscal crisis, FNCCI president Kush Kumar Joshi urged the government to work out preventive measures to avoid the impact of the crisis in Nepal and encourage internal investments.
Highlighting the negative side of the budget and the impact of economic recession affecting exports, Joshi said, "The policy regarding achievement of targeted revenue has failed to attract the private sector. Concern regarding the export of Nepali carpet, readymade garment, pashmina and leather products was lost and no kind of promotional measures were formulated by the government even though our export sector is losing its grip in the international market due to the economic recession." National Planning Commission vice-chairman Prof Dr Pitamber Sharma warned that the economic crisis in the US could have its impact on Nepal and urged the government to start working on short and long term precautionary measures. Joshi called for bringing new goods and services under the ambit of Inland Revenue and imposing custom fee on additional goods. He also suggested forming a revenue consultancy committee to conduct policy level discussions. However, Dr Bhattarai said, "People in the private sector are themselves confused about what they really want. Therefore, the gap should be bridged and whatever kind of problems they are having they should feel free to raise the issue of missing points and the improvements they want. Detailed discussion on this can be held later." FNCCI's tax and revenue committee chairperson Pradeep Man Vaidhya said, "There must be door-to-door service so that tax payers feel encouraged and honoured. The government should also provide security to tax payers." Vaidhya also said that it was not the right time to charge property tax and that there shouuld be thorough homework before that.
While Dr Bhattarai assured tax payers would get due recognition, acting secretary to the Ministry of Finance (MoF) Krishna Hari Baskota said, "The budget has not ignored the private sector. Rather, the government believes in the internal market and internal investment which is the driving factor for development."
"Study on VAT and other aspects is going on. Instead of carping, the private sector should look at the improvements made by the budget," Baskota added.
Source: THT
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BLDBL opens 3rd Branch in Jhapa
Biratlaxmi Bank Ltd. has opened its third branch in Surunga of Jhapa. Other two branches of the bank are located at birathchok of Morang and Damak of Jhapa. BLDBL aims to provide quality banking services to the local dwellers. Various deposit schemes are brought into practice along with easily accessible loan facility.
Source: Jamb News Service
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Source: Jamb News Service
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Tihar Samriddhi of NABIL
NABIL bank Ltd has publicized "Tihar Samriddhi" scheme. The new scheme incorporates 7 percent interest on deposits. Three years deposits on the "Prime Account" will receive 7 percent interest rate. NABIL has made the service available from all of its 21 branches.
Source: Jamb News Service
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Source: Jamb News Service
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Successive stock suspension
Stocks of SBPP, FHL, SRS, NBBU, NHPC, BPCL, STC, NTL, NWC, RBS, AEFL, CMBF, SFFIL, PFLBS, IFIL, NDB, NUBL, SDBL, NABBC, ABBL, MDBL, BLDBL has been suspended due to nonpayment of annual fee for 2065/66 to the stock exchange.
Source: Jamb News Service
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Source: Jamb News Service
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25 defaulting firms in Nepse fees dock
Nepal Stock Exchange (Nepse) today froze the share transactions of 25 companies after they defaulted on their renewal fees for this fiscal year.
Two hydropower companies - National Hydropower Co Ltd and Butwal Power Co Ltd — of the three listed hydropower companies, and two insurance companies — Rastriya Beema Sansthan and National Life Insurance Company Ltd — failed to pay renewal fees.
The failure of these companies to cough up the renewal fees at ahe time when the secondary market is feeling jittery, has made investors even more nervous. Nepse, however, clarified that their trading would resume after they pay their renewal fees.
According to the rule, listed companies must pay their renewal fees within the first quarter (three months) of the fiscal year. Failure to do so will result in halting of share transactions at Nepse. Hotel Yak and Yeti — the only hotel among those listed under the hotels group that had not paid its renewal fee last fiscal year also — and some financial institutions are also barred from trading from today until they pay their renewal fees. Some of the companies are not in operation. These have to pay from Rs 15,000 to Rs 50,000 as renewal fees. Once they pay renewal fees, they also will be allowed to resume their shares' transactions.
Defaulters
•BiratLaxmi Bikas Bank
•Harisiddhi Eita Thata Tile Karkhana Ltd
•Bhrikuti Pulp and Paper
•SriRam Sugar Mills
•Yak and Yeti Hotel Pvt Ltd
•Butwal Power Co Ltd
•Nepal Trading Ltd
•Rastriya Beema Sansthan
•Alpic Everest Finance Ltd
•Cosmic Merchant Banking and Finance
•Patan Finance Ltd
•Nepal Bikas Bank Ltd
•Narayani Industrial and Development Bank Ltd
•Butwal Spinning Mills
•Birat Shoe Ltd
•Fleur Himalayan Ltd
•Nepal Bitumen and Barrel Uddyog
•National Hydropower Company Ltd
•Salt Trading Company Ltd
•Nepal Welfare Company Ltd
•National Life Insurance Company Ltd
•Butwal Finance Ltd
•Srijana Finance Ltd
•Imperial Financial Institution Ltd
•Nirdhan Utthan Bank Ltd
Source: THT
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Two hydropower companies - National Hydropower Co Ltd and Butwal Power Co Ltd — of the three listed hydropower companies, and two insurance companies — Rastriya Beema Sansthan and National Life Insurance Company Ltd — failed to pay renewal fees.
The failure of these companies to cough up the renewal fees at ahe time when the secondary market is feeling jittery, has made investors even more nervous. Nepse, however, clarified that their trading would resume after they pay their renewal fees.
According to the rule, listed companies must pay their renewal fees within the first quarter (three months) of the fiscal year. Failure to do so will result in halting of share transactions at Nepse. Hotel Yak and Yeti — the only hotel among those listed under the hotels group that had not paid its renewal fee last fiscal year also — and some financial institutions are also barred from trading from today until they pay their renewal fees. Some of the companies are not in operation. These have to pay from Rs 15,000 to Rs 50,000 as renewal fees. Once they pay renewal fees, they also will be allowed to resume their shares' transactions.
Defaulters
•BiratLaxmi Bikas Bank
•Harisiddhi Eita Thata Tile Karkhana Ltd
•Bhrikuti Pulp and Paper
•SriRam Sugar Mills
•Yak and Yeti Hotel Pvt Ltd
•Butwal Power Co Ltd
•Nepal Trading Ltd
•Rastriya Beema Sansthan
•Alpic Everest Finance Ltd
•Cosmic Merchant Banking and Finance
•Patan Finance Ltd
•Nepal Bikas Bank Ltd
•Narayani Industrial and Development Bank Ltd
•Butwal Spinning Mills
•Birat Shoe Ltd
•Fleur Himalayan Ltd
•Nepal Bitumen and Barrel Uddyog
•National Hydropower Company Ltd
•Salt Trading Company Ltd
•Nepal Welfare Company Ltd
•National Life Insurance Company Ltd
•Butwal Finance Ltd
•Srijana Finance Ltd
•Imperial Financial Institution Ltd
•Nirdhan Utthan Bank Ltd
Source: THT
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Sebon concerned at smear bid
Securities Board of Nepal (Sebon) has shown serious concern over the recent news involving it and its staff with the share allotment of Clean Energy Development Bank (CEDB). "The board is continuously engaged in the development of capital market and has brought various rules and regulations regarding it for more transparency," Sebon said. It added that since recently some miscreants were trying to tarnish the board's reputation. "The board will be, as always, working for investors' rights despite such attempts," it said.
Source: THT
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Source: THT
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Curtain raiser: Hows of Public-Private Partnership
By Purusottam Man Shrestha
The government spelled out the Public-Private Partnership (PPP) approach in its programme and policies for this fiscal year.
Nepal has learned some lessons from PPP during past years at the local level. There are some encouraging and some rather less encouraging signs that call for a more cautious approach. The reasons for caution, patience and diligence as we proceed with PPP activity in future basically has to do with overly ambitious individuals and groups who are in a sense misleading themselves despite repeated deliberations and explanations as to how some of the most successful PPPs have been conceptualised and actually operationalised. We have to clearly understand three fundamental factors upon which the concept of PPP is based — Value for Money, Project Structuring and Project Financing.
Value for Money is the core idea upon which PPP arrangements are made. It is assessed in terms of Price, Quantity and Quality of service and believed that PPP arrangements can provide better value for money to consumers and service providers alike. Risk sharing or transfer is the basis of high value of Money. The better the risk managed, the higher the value for money is received. Risk is best managed when it is allotted to one who has the highest risk bearing capacity. Political risk is best managed by the government while commercial risk is best managed by the private party. Government needs to compare the cost incurred in a traditional system of service delivery and the envisioned PPP project and make decisions based upon highest value for its money.
The primary concern of the Value for Money concept is to study and analyse the wide range of options in delivery of the essential infrastructure facilities. The major objective is to select intelligently and prudently that specific option, among the full range of project delivery options, which provides the best Value for Money outcome for both government and the private including the community.
The second most important factor in the establishment of a PPP is the structuring of the project itself. PPPs are an innovative form of partnership among the triangle of government, business and civil society. At a very basic level, PPP arrangements have to fulfill the responsibility of government towards its citizens, while also taking into account commercial interests from the vantage point of business. PPP arrangements must strike a balance between the commercial viability of a project and the project's social and environmental repercussions.
This issue comes to the fore when we begin to look at the pro-poor functionality of PPP arrangements, for instance if we imagine the creation of some infrastructure which is meant to address the social, environmental and health concerns of lower-income members of society. If a PPP modality is utilised in this instance, we can reasonably expect that the private business sector will be driven primarily by the profit incentive but this is where government or public sector's involvement can compensate positively for the private sector's under-investment in the social, human and environmental dimensions of a given infrastructure project.
Pro-poor functionality of PPP can be viewed from two aspects: directly providing services to poor community such as improved access to water and sanitation and indirect impact of PPP projects to poor community through enterprise creation and/or employment generation. Access to drinking water to poor community with inbuilt cross subsidy system or differential pricing system or municipality incentive package is the direct pro-poor functionality of the PPP projects. Sub-contracting of service facilities like Toilets, Electrical works, Plumbing works, Cleaning and up keeping works in Bus Terminal, Shopping complex are the possible pro-poor functionalities tied up with the PPP projects in an indirect way.
Similarly contractual agreement to reserve some rentable area for the entrepreneurs belonging to marginalised groups is another pro-poor functionality of the PPP projects.
The essence of the matter is that any given PPP project can be structured in such a fashion as to adequately and equally address the main interests and concerns of both public and private entities. In terms of the profit incentive of the private sector, this interest can be simultaneously incorporated within a PPP project structure, while also addressing the social responsibility, health, environmental and job generation concerns of the government. In other words, a PPP project can begin with the premise that it will have an explicitly pro-poor focus and functionality, but this does not have to preclude the presence of a profit incentive vis-Ã -vis the private partner. The main point is that any given PPP project has the potential to address a wide range of issues and problems as well as the capability to make available incentives (in a simultaneous manner) to both public and private actors alike.
There are various forms of PPP arrangements that could be designed as per the need of the particular project in concern. PPP can be of Operational type or can be of Investment type. Under operational PPP there can be various sub-types and various combinations of the sub-types also could be formulated / designed. Similarly under Investment PPP, various sub-types or various combinations of the sub-types could be made.
The financing of PPP projects is another very important factor, which is to be taken into account while deciding on a PPP project. There are three forms of such PPP project financing. The first category is the self revenue generating projects, in which the private sector finances, constructs and operates the project through cost recovery modality. A good example of such projects is the BOT variants. The second one is that type of PPP project in which the government makes payments to private service providers through the existing tax framework or by levying new taxes to meet these payments. The third form of the PPP project financing is the combination of cost recovery and government subsidy. Thus, the PPP practitioners should not be overwhelmed by the benefits of the PPP, rather judgements should be based on thorough study, analyses and implications of PPP projects.
Source: THT
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The government spelled out the Public-Private Partnership (PPP) approach in its programme and policies for this fiscal year.
Nepal has learned some lessons from PPP during past years at the local level. There are some encouraging and some rather less encouraging signs that call for a more cautious approach. The reasons for caution, patience and diligence as we proceed with PPP activity in future basically has to do with overly ambitious individuals and groups who are in a sense misleading themselves despite repeated deliberations and explanations as to how some of the most successful PPPs have been conceptualised and actually operationalised. We have to clearly understand three fundamental factors upon which the concept of PPP is based — Value for Money, Project Structuring and Project Financing.
Value for Money is the core idea upon which PPP arrangements are made. It is assessed in terms of Price, Quantity and Quality of service and believed that PPP arrangements can provide better value for money to consumers and service providers alike. Risk sharing or transfer is the basis of high value of Money. The better the risk managed, the higher the value for money is received. Risk is best managed when it is allotted to one who has the highest risk bearing capacity. Political risk is best managed by the government while commercial risk is best managed by the private party. Government needs to compare the cost incurred in a traditional system of service delivery and the envisioned PPP project and make decisions based upon highest value for its money.
The primary concern of the Value for Money concept is to study and analyse the wide range of options in delivery of the essential infrastructure facilities. The major objective is to select intelligently and prudently that specific option, among the full range of project delivery options, which provides the best Value for Money outcome for both government and the private including the community.
The second most important factor in the establishment of a PPP is the structuring of the project itself. PPPs are an innovative form of partnership among the triangle of government, business and civil society. At a very basic level, PPP arrangements have to fulfill the responsibility of government towards its citizens, while also taking into account commercial interests from the vantage point of business. PPP arrangements must strike a balance between the commercial viability of a project and the project's social and environmental repercussions.
This issue comes to the fore when we begin to look at the pro-poor functionality of PPP arrangements, for instance if we imagine the creation of some infrastructure which is meant to address the social, environmental and health concerns of lower-income members of society. If a PPP modality is utilised in this instance, we can reasonably expect that the private business sector will be driven primarily by the profit incentive but this is where government or public sector's involvement can compensate positively for the private sector's under-investment in the social, human and environmental dimensions of a given infrastructure project.
Pro-poor functionality of PPP can be viewed from two aspects: directly providing services to poor community such as improved access to water and sanitation and indirect impact of PPP projects to poor community through enterprise creation and/or employment generation. Access to drinking water to poor community with inbuilt cross subsidy system or differential pricing system or municipality incentive package is the direct pro-poor functionality of the PPP projects. Sub-contracting of service facilities like Toilets, Electrical works, Plumbing works, Cleaning and up keeping works in Bus Terminal, Shopping complex are the possible pro-poor functionalities tied up with the PPP projects in an indirect way.
Similarly contractual agreement to reserve some rentable area for the entrepreneurs belonging to marginalised groups is another pro-poor functionality of the PPP projects.
The essence of the matter is that any given PPP project can be structured in such a fashion as to adequately and equally address the main interests and concerns of both public and private entities. In terms of the profit incentive of the private sector, this interest can be simultaneously incorporated within a PPP project structure, while also addressing the social responsibility, health, environmental and job generation concerns of the government. In other words, a PPP project can begin with the premise that it will have an explicitly pro-poor focus and functionality, but this does not have to preclude the presence of a profit incentive vis-Ã -vis the private partner. The main point is that any given PPP project has the potential to address a wide range of issues and problems as well as the capability to make available incentives (in a simultaneous manner) to both public and private actors alike.
There are various forms of PPP arrangements that could be designed as per the need of the particular project in concern. PPP can be of Operational type or can be of Investment type. Under operational PPP there can be various sub-types and various combinations of the sub-types also could be formulated / designed. Similarly under Investment PPP, various sub-types or various combinations of the sub-types could be made.
The financing of PPP projects is another very important factor, which is to be taken into account while deciding on a PPP project. There are three forms of such PPP project financing. The first category is the self revenue generating projects, in which the private sector finances, constructs and operates the project through cost recovery modality. A good example of such projects is the BOT variants. The second one is that type of PPP project in which the government makes payments to private service providers through the existing tax framework or by levying new taxes to meet these payments. The third form of the PPP project financing is the combination of cost recovery and government subsidy. Thus, the PPP practitioners should not be overwhelmed by the benefits of the PPP, rather judgements should be based on thorough study, analyses and implications of PPP projects.
Source: THT
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Rumours drag NEPSE down
The stock market was hit Monday when a rumour that the government was changing its existing policy on capital gain tax and would be imposing a cap on right issues spread and brought the Nepal Stock Exchange (NEPSE) Index down 18.63 points. The NEPSE Index closed at 899.99 points.
A knowledgeable source informed the Post that investors remained edgy all day due to rumour that the soon-to-be announced policy would take the base price of rights issues at Rs. 100 while calculating the tax that shareholders have to pay while selling stocks.
According to the rumour, the policy will also take the base price of bonus as zero since shareholders do not have to pay anything when they get hold of bonus shares. As per the existing policy, the capital gain tax to be paid is calculated by taking an average of right issues, bonus share and market price of ordinary shares.
Among the major eight sub-sectors in the NEPSE index, the banking sector, which commands the lion's share of Nepal's share market, tumbled 24.33 points. Similarly, the indices of development banks, hydropower, finance and insurance sub-sectors also went down significantly. However the indices of trading and hotel sectors went up.
Source: eKantipur
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A knowledgeable source informed the Post that investors remained edgy all day due to rumour that the soon-to-be announced policy would take the base price of rights issues at Rs. 100 while calculating the tax that shareholders have to pay while selling stocks.
According to the rumour, the policy will also take the base price of bonus as zero since shareholders do not have to pay anything when they get hold of bonus shares. As per the existing policy, the capital gain tax to be paid is calculated by taking an average of right issues, bonus share and market price of ordinary shares.
Among the major eight sub-sectors in the NEPSE index, the banking sector, which commands the lion's share of Nepal's share market, tumbled 24.33 points. Similarly, the indices of development banks, hydropower, finance and insurance sub-sectors also went down significantly. However the indices of trading and hotel sectors went up.
Source: eKantipur
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Nepal, India ready to amend trade treaty
A two-day secretarial level meeting between Nepal and India ended Monday with both countries agreeing to amend the bilateral trade treaty within three months.
Talking to media after the meeting, Nepal"s commerce secretary Purushottam Ojha said the parties had also agreed on the clauses to be amended in the existing bilateral trade treaty. "We will finalize the amendment within three months," he said.
He further said the amendment meeting would be held in Kathmandu. The treaty has been renewed twice since it was signed in 1996. The two nations have been discussing the amendments for the last two years.
"We have almost finalised the amendments," an official present at meeting told the Post. "The Indian side has informed us they will decide on some of the agendas in a few days," he added.
During Prime Minister Puspa Kamal Dahal"s India visit last month, Indian businessmen had asked him to create a favourable environment for their investment in Nepal. The two nations had then theoretically agreed to ease and develop bilateral trade.
Ojha claimed that the proposed amendments would improve Nepal"s trade with India by ending the hassles Nepali entrepreneurs have been facing. India will also help Nepal increase connectivity.
"We have concluded an important meeting and need to make practical changes to the agreements in the amendment draft," he said.
During the meeting, India agreed to help Nepal test the quality of food products exported to India and also improve the infrastructure of laboratories in Nepal.
Similarly, India also agreed to allow Nepal to use its railway. Nepal will now be able to use the Jogbani-Sinhabad track that enters Bangladesh at Rohanpur for tri-lateral trade with Bangladesh. Also, both nations agreed to open their airways for trade, an official said. India also agreed to scrap the quota system on import of vegetable ghee, copper products and zinc oxide.
The meeting agreed to increase the capacity of the dry port in Birgunj. "This will increase traffic in Birgunj," Ojha said, adding that India had also agreed to open its liquid cargo track for Nepal.
A joint team will also visit the Banglabandh-Fulbari road to remove problems that have been creating hassles for Nepali traders. "We agreed to visit the road to resolve any problem," Ojha said.
Similarly, India has also agreed to provide equal treatment to transactions made either in US dollars or Indian currency, a move that is expected to boost the competitiveness of Nepal products in the Indian market. India has also assured it will sort out obstacles in the export of readymade garments to India.
During bilateral talks, the Indian side raised concern over labour problems and various complications in the operation of Manipal Collage that was established with joint Indian investments. Ojha, in turn assured Nepal"s commitment to resolve the problem as soon as possible.
Source: Ekantipur
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Talking to media after the meeting, Nepal"s commerce secretary Purushottam Ojha said the parties had also agreed on the clauses to be amended in the existing bilateral trade treaty. "We will finalize the amendment within three months," he said.
He further said the amendment meeting would be held in Kathmandu. The treaty has been renewed twice since it was signed in 1996. The two nations have been discussing the amendments for the last two years.
"We have almost finalised the amendments," an official present at meeting told the Post. "The Indian side has informed us they will decide on some of the agendas in a few days," he added.
During Prime Minister Puspa Kamal Dahal"s India visit last month, Indian businessmen had asked him to create a favourable environment for their investment in Nepal. The two nations had then theoretically agreed to ease and develop bilateral trade.
Ojha claimed that the proposed amendments would improve Nepal"s trade with India by ending the hassles Nepali entrepreneurs have been facing. India will also help Nepal increase connectivity.
"We have concluded an important meeting and need to make practical changes to the agreements in the amendment draft," he said.
During the meeting, India agreed to help Nepal test the quality of food products exported to India and also improve the infrastructure of laboratories in Nepal.
Similarly, India also agreed to allow Nepal to use its railway. Nepal will now be able to use the Jogbani-Sinhabad track that enters Bangladesh at Rohanpur for tri-lateral trade with Bangladesh. Also, both nations agreed to open their airways for trade, an official said. India also agreed to scrap the quota system on import of vegetable ghee, copper products and zinc oxide.
The meeting agreed to increase the capacity of the dry port in Birgunj. "This will increase traffic in Birgunj," Ojha said, adding that India had also agreed to open its liquid cargo track for Nepal.
A joint team will also visit the Banglabandh-Fulbari road to remove problems that have been creating hassles for Nepali traders. "We agreed to visit the road to resolve any problem," Ojha said.
Similarly, India has also agreed to provide equal treatment to transactions made either in US dollars or Indian currency, a move that is expected to boost the competitiveness of Nepal products in the Indian market. India has also assured it will sort out obstacles in the export of readymade garments to India.
During bilateral talks, the Indian side raised concern over labour problems and various complications in the operation of Manipal Collage that was established with joint Indian investments. Ojha, in turn assured Nepal"s commitment to resolve the problem as soon as possible.
Source: Ekantipur
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Trust sermon to banks
epal Rastra Bank (NRB) has introduced Prompt Corrective Action (PCA) — a new directive effective from October 17 — if financial institutions do not maintain minimum Capital Adequacy Ratio (CAR) every month, unlike the previous three-month duration earlier. CAR — an indicator of financial capital strength — is a measure of the amount of a bank's capital expressed as a percentage of its risk weighted credit exposure.
All financial institutions — in A, B and C classes — licenced by NRB will have to mandatorily maintain minimum CAR every month prescribed by it, said acting NRB governor Krishna Bahadur Manandhar.
Under Basel II, commercial banks have to maintain a minimum of 10 per cent CAR while development banks and finance companies — financial institutions in B and C classes — will have to maintain 11 per cent CAR, under Basel I. "If any institution falls short of the prescribed CAR any month, the central bank will immediately take action against it," Manandhar said, adding that this new regulation will make financial institutions more disciplined and stabilise the financial market.
"NRB defines and monitors CAR to protect depositors, thereby creating confidence in the banking system," he added. There are various actions that the regulatory authority of the financial market would take against institutions failing to maintain the minimum CAR. "If an institution falls short of maintaining CAR by upto two per cent, it cannot announce its dividends and bonus shares," states the NRB directive.
Similarly, if a financial institution's CAR is less than two to four per cent, NRB will put a cap on its lending capacity. If CAR falls short from four to six per cent, it will not be allowed to open a deposit account and will suspend its lending activities.
If the institution has less than six to eight per cent shortfall in its minimum CAR, it will not be allowed to pay salary, allowance or any kind of benefit to its staff . It also cannot promote or recruit new employees. However, if the minimum CAR is less than eight per cent and over, the financial institution will be declared ‘problematic' and action taken against it according to section 86 of the NRB Act. "If the financial institution cannot maintain its minimum CAR within six months of being declared ‘problematic' also, its licence will be terminated and the company marked for liquidation," says the NRB directive.
CAR is the ratio, which determines the capacity of the bank in terms of meeting time liabilities and other risks such as credit and operational risks. In the most simple formulation, a bank's capital is the ‘cushion' for potential losses, and which will protect the bank's depositors or other lenders.
Source: The Himalayan Times
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All financial institutions — in A, B and C classes — licenced by NRB will have to mandatorily maintain minimum CAR every month prescribed by it, said acting NRB governor Krishna Bahadur Manandhar.
Under Basel II, commercial banks have to maintain a minimum of 10 per cent CAR while development banks and finance companies — financial institutions in B and C classes — will have to maintain 11 per cent CAR, under Basel I. "If any institution falls short of the prescribed CAR any month, the central bank will immediately take action against it," Manandhar said, adding that this new regulation will make financial institutions more disciplined and stabilise the financial market.
"NRB defines and monitors CAR to protect depositors, thereby creating confidence in the banking system," he added. There are various actions that the regulatory authority of the financial market would take against institutions failing to maintain the minimum CAR. "If an institution falls short of maintaining CAR by upto two per cent, it cannot announce its dividends and bonus shares," states the NRB directive.
Similarly, if a financial institution's CAR is less than two to four per cent, NRB will put a cap on its lending capacity. If CAR falls short from four to six per cent, it will not be allowed to open a deposit account and will suspend its lending activities.
If the institution has less than six to eight per cent shortfall in its minimum CAR, it will not be allowed to pay salary, allowance or any kind of benefit to its staff . It also cannot promote or recruit new employees. However, if the minimum CAR is less than eight per cent and over, the financial institution will be declared ‘problematic' and action taken against it according to section 86 of the NRB Act. "If the financial institution cannot maintain its minimum CAR within six months of being declared ‘problematic' also, its licence will be terminated and the company marked for liquidation," says the NRB directive.
CAR is the ratio, which determines the capacity of the bank in terms of meeting time liabilities and other risks such as credit and operational risks. In the most simple formulation, a bank's capital is the ‘cushion' for potential losses, and which will protect the bank's depositors or other lenders.
Source: The Himalayan Times
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Nepali rupee slips to record low
Amid huge capital outflows by foreign funds in India, the Nepali rupee has plunged to a historic low against the greenback to Rs.79.30 on Thursday. The rupee's previous low against the US dollar was in August 2002 when it dropped to Rs.78.60.
Nepal Rastra Bank (NRB), the country's monetary authority, has fixed a selling rate of Rs.79.30 for a US dollar for Thursday's trading. NRB's selling rate for Wednesday's trading was Rs.78.94, The Nepali rupee, which is pegged with the Indian currency, has already depreciated by over 24 percent this year. A rupee was traded at Rs.63.85 on Jan. 1.
According to the online edition of The Economic Times, the fall of the Indian rupee against the dollar was due to an increased demand for the dollar by importers and capital outflow of foreign funds. At the Interbank Foreign Exchange (Forex) market, the local unit, which remained steady at 49.00 on Tuesday, fell by 25 Indian paise to 49.25 against the greenback Wednesday.
The depreciation in the Nepali rupee, meanwhile, is good news for the country's export sector, which has been going through a rough patch in recent years. However, it would also make imported goods and raw materials more expensive, thereby pushing the inflation further up. More importantly, the depreciation of the Nepali rupee will increase the country's foreign debt repayment liabilities, which will put pressure on the government to manage additional resources this year.
Gold down Rs. 515
The volatile international market has brought down gold prices in Nepal pushing it down Rs. 515 per 10 grams on Wednesday.
According to the Gold and Silver Dealers Association (GSDA), prices of the precious yellow metal went down to Rs. 20,190 per 10 grams on Wednesday from Rs. 20,705 a day earlier. The price was Rs. 20,360 per 10 gram Sunday.
The price of gold in international bullion market dipped to US$759 per ounce (31.11 grams) from US$797 per ounce. However, the silver price rose marginally to Rs. 302 per 10 gram on Wednesday from Rs. 300.
GSDA President Tej Ratna Shakya attributed the fluctuation to the current global financial meltdown.
Source: Ekantipur
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Nepal Rastra Bank (NRB), the country's monetary authority, has fixed a selling rate of Rs.79.30 for a US dollar for Thursday's trading. NRB's selling rate for Wednesday's trading was Rs.78.94, The Nepali rupee, which is pegged with the Indian currency, has already depreciated by over 24 percent this year. A rupee was traded at Rs.63.85 on Jan. 1.
According to the online edition of The Economic Times, the fall of the Indian rupee against the dollar was due to an increased demand for the dollar by importers and capital outflow of foreign funds. At the Interbank Foreign Exchange (Forex) market, the local unit, which remained steady at 49.00 on Tuesday, fell by 25 Indian paise to 49.25 against the greenback Wednesday.
The depreciation in the Nepali rupee, meanwhile, is good news for the country's export sector, which has been going through a rough patch in recent years. However, it would also make imported goods and raw materials more expensive, thereby pushing the inflation further up. More importantly, the depreciation of the Nepali rupee will increase the country's foreign debt repayment liabilities, which will put pressure on the government to manage additional resources this year.
Gold down Rs. 515
The volatile international market has brought down gold prices in Nepal pushing it down Rs. 515 per 10 grams on Wednesday.
According to the Gold and Silver Dealers Association (GSDA), prices of the precious yellow metal went down to Rs. 20,190 per 10 grams on Wednesday from Rs. 20,705 a day earlier. The price was Rs. 20,360 per 10 gram Sunday.
The price of gold in international bullion market dipped to US$759 per ounce (31.11 grams) from US$797 per ounce. However, the silver price rose marginally to Rs. 302 per 10 gram on Wednesday from Rs. 300.
GSDA President Tej Ratna Shakya attributed the fluctuation to the current global financial meltdown.
Source: Ekantipur
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Dollar touches record Rs 80 mark
The Nepali rupee has further plummeted against the US dollar to stand at a historic Rs. 80-mark with deepening fears of a global recession increasing the demand of the greenback in the Indian market.
The partially convertible Nepali rupee that is pegged with the Indian currency lost another 70 paisa overnight. Nepal Rastra Bank (NRB), the country's monetary authority, has fixed a selling rate of Rs. 80 for a US dollar for Friday's trading. NRB's selling rate for Thursday's trading was Rs 79.30. After the tumble, the Nepali rupee has depreciated by around 25.3 percent this year. The selling rate of the Nepali currency was Rs 63.85 on Jan. 1.
According to the online edition of The Economic Times, fears of increased capital outflows continued to weigh down on the rupee sentiment. In an attempt to tame the falling Indian currency, the Reserve Bank of India is estimated to have sold up to $2 billion on Thursday. Following the global financial crisis that began with the bursting of the housing bubble in the US, there has been a whopping outflow of US dollar from India, amounting more than US$ 35 billion.
Gold price slips
The gold price further dipped in Nepal by a record Rs 690 per ten grams Thursday on the back of weaker demand for the yellow metal as the greenback has kept strengthening against all major currencies and investors have kept on rushing to sell their bullion to pay losses in equities. The dollar and gold generally have an inverse relationship as the two compete for speculative funds.
According to Nepal Gold and Silver Dealers' Association, ten grams of gold was traded at Rs. 19,500 today against the Rs. 20,190 that the market saw on Wednesday. The price of ten grams of gold was Rs. 20,705 on Tuesday.
Stock revives
Defying stock crashes worldwide, the NEPSE index further gained 5.33 points to close at 919.33 at Nepal's only secondary market today. The banking sector, which holds the lion's share at NEPSE, rose by 6.78 points, as most of the commercial banks were successful in raising their share values during today's trading. Likewise, the share values of the development bank and finance company sectors also rose. But, the hydropower and other sectors saw their share prices go down.
Source: Ekantipur
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The partially convertible Nepali rupee that is pegged with the Indian currency lost another 70 paisa overnight. Nepal Rastra Bank (NRB), the country's monetary authority, has fixed a selling rate of Rs. 80 for a US dollar for Friday's trading. NRB's selling rate for Thursday's trading was Rs 79.30. After the tumble, the Nepali rupee has depreciated by around 25.3 percent this year. The selling rate of the Nepali currency was Rs 63.85 on Jan. 1.
According to the online edition of The Economic Times, fears of increased capital outflows continued to weigh down on the rupee sentiment. In an attempt to tame the falling Indian currency, the Reserve Bank of India is estimated to have sold up to $2 billion on Thursday. Following the global financial crisis that began with the bursting of the housing bubble in the US, there has been a whopping outflow of US dollar from India, amounting more than US$ 35 billion.
Gold price slips
The gold price further dipped in Nepal by a record Rs 690 per ten grams Thursday on the back of weaker demand for the yellow metal as the greenback has kept strengthening against all major currencies and investors have kept on rushing to sell their bullion to pay losses in equities. The dollar and gold generally have an inverse relationship as the two compete for speculative funds.
According to Nepal Gold and Silver Dealers' Association, ten grams of gold was traded at Rs. 19,500 today against the Rs. 20,190 that the market saw on Wednesday. The price of ten grams of gold was Rs. 20,705 on Tuesday.
Stock revives
Defying stock crashes worldwide, the NEPSE index further gained 5.33 points to close at 919.33 at Nepal's only secondary market today. The banking sector, which holds the lion's share at NEPSE, rose by 6.78 points, as most of the commercial banks were successful in raising their share values during today's trading. Likewise, the share values of the development bank and finance company sectors also rose. But, the hydropower and other sectors saw their share prices go down.
Source: Ekantipur
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Sanima's new branch
Sanima Bikash Bank Ltd has opened its fourth branch at Kumaripati, Lalitpur. According to a press statement, the bank garnered a total deposit of Rs 3.69 billion, posted loans and advances worth Rs 2.63 billion at the end of the first quarter of the fiscal year 2008-09 and got a net profit of Rs 16.69 million.
Source: Jamb News Service
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Source: Jamb News Service
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Pro-worker move
Nepal Credit and Commerce Bank Ltd has launched NCC Employee Savings Account wherein those employed in any organised sector can open an account with zero balance. The bank will also provide 50 per cent discount on its ABBS charge, 25 per cent discount on the employee's child education and 25 per cent discount on home and auto loan in the scheme.
Source:
Jamb News Service
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Source:
Jamb News Service
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Bhajuratna Finance and Saving Ltd's AGM
The scheduled AGM of Bhajuratna Finance and Saving Ltd. has been cancelled
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Unilever Nepal Ltd's Upcoming AGM
Unilever Nepal Ltd. is going to have its AGM on 12-Nov-2008.
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Standard Chartered Bank's Upcoming 22nd AGM
Standard Chartered Bank is going to have its 22nd AGM on 25-Nov-2008 due to which it has announced its book close date from 27-Oct-2008 to 25-Nov-2008
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Jyoti Spinning Mills: Company File for liquidation
From special AGM held on 3rd Oct 2008, Jyoti Spinning Mills Ltd. has agreed to file for liquidation.
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Kist Merchant Banking & Finance Ltd's Upcoming 7th AGM
Kist Merchant Banking & Finance Ltd. has announced its forthcoming annual general meeting to be held on 6th December 2008 (2065 Mangshir 21).
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Everest Bank Ltd's Upcoming 14th AGM
Everest Bank Ltd. has declared its forthcoming 14th annual general meeting to be held on 24th November 2008 (2065 Mangshir 9).
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Shree Investment Finance Co.Ltd's Upcoming 14th AGM
Shree Investment Finance Co.Ltd. has declared its forthcoming 14th annual general meeting to be held on 12th November 2008 (2065 Kartik 27).
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Union Finance Co. Ltd's Right Share Issue
Union Finance Co. Ltd. is issuing 1:1 right share from 21th Oct, 2008 to 24th November, 2008(2065 Kartik 5 to 2065 Mangshir 9).
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Yeti finance Ltd. Right Share Allotment
Yeti finance Ltd. has allotted its right shares issued on 3rd August, 2008 (2065 Shrawan 19)
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Nepal Investment Bank Ltd Book Closure
Nepal Investment Bank Ltd. is having its book closure on 31st October 2008 (2065 Kartik 15) for the purpose of issuing right share
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Nepal Shree Lanka Mer. Bank's Share Sale
Nepal Shree Lanka Mer. Bank is about to sell its holding of National Hydropower Co. Ltd.
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KIST Merchant Banking & Finance's Right Share Issue
KIST Merchant Banking & Finance is issuing 1:1.5 right share from 9th November 2008 (2065 Kartik 24) to the share holders upto 23rd October 2008 (2065 Kartik 7)
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NABIL Bank Bond Certificate Distribution
NABIL Bank Ltd. is distributing its redeemable bond certificate to its bondholders.
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Kathmandu Finance Ltd's Right Share Certificate Distribution
Kathmandu Finance Ltd. is distributing its right share certificate from 23rd October 2008 (2065 Kartik 7).
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Premier Insurance Co. Ltd's Premier Insurance Co. Ltd
Premier Insurance Co. Ltd. has allotted the right shares issued on 26th June, 2008 (2065 Ashad 12)
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Annapurna Bikash Bank's Right Share Certificate Distribution
Annapurna Bikash Bank Ltd. is distributing its right share certificate from 27 October 2008 (2065 kartik 11)
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Notice To The Shareholders: NABIL Bank
NABIL Bank Ltd. has published a notice for its shareholders regarding the decisions made on 24th annual general meeting held on 9th September 2008 (2065 Ashwin 13).
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Nepal Shree Lanka Mer. Bank Right Share Issue
Nepal Shree Lanka Mer. Bank Ltd. is issuing 1:2 right share from 17th November 2008 (2065 Mangshir 2) to the shareholders upto 6th November 2008 (2065 kartik 21).
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Srijana Finance's Right Share Issue
Srijana Finance Ltd. is issuing 1:1 right share from 14th November 2008 (2065 Kartik 29) to the shareholders upto 30th October 2008 (2065 kartik 14).
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