Liquidation of 3 NTC units creates chaos

By Prem Khanal

KATHMANDU, Aug 13 - Amid growing confusion surrounding the dissolution of three units under Nepal Transportation Corporation (NTC), Board of Directors of the Corporation has demanded with the government to implement cabinet decision.

Cabinet on July 28 had decided to dissolve three units of NTC, namely, Central Office, Kathmandu, Trucks and Container Service (TCS) Birgunj and Nepal Ropeway Company (NRC), Kathmandu. The two remaining units, as per the decision, Trolley Bus Service and Janakpur Railway will be reorganized as per the Company Act.

"Government should not linger on the issue. Either it should quickly implement the cabinet decision or if it cannot, then revoke the idea of dissolution altogether," says Chandra Bahadur KC, Chairman of the Board, talking to The Kathmandu Post.

The valuation of the assets of the three units has been creating problems for the implementation of the cabinet decision. Government was supposedly required to form a committee for assessing the value of fixed assets, but no committee has been formed so far. Property valuation is necessary for raising funds through its sales.

Cabinet had decided to layoff all the staff of TCS and NRC by providing monetary compensation equal to the last month's salary multiplied by the numbers of years of service. However, the 642 permanent and 200 temporary employees of the Corporation have not received their salaries for the past two months.

As per an earlier understanding, the government had pledged to release Rs 100 million loan to layoff twenty percent of the total staff before April, 2000. However, after some time, the government, surprisingly informed NTC to arrange the necessary amount by selling its property.

The confusion surrounding the valuation of assets is delaying the implementation of the decision thereby creating an environment of uncertainty among the employees, who have been demanding complete revocation of the cabinet decision.

They are protesting against the layoff scheme and are demanding with the government to adjust them in other companies in case the units are liquidated.

The employees had even requested Khum Bahadur Khadka, then Minister of Works and Transportation to reconsider the cabinet decision, but with no avail.

"After we came to know about the cabinet decision, we met Minister for Works and Transportation and requested him to reconsider the decision, which he had assured to do. However, no decision was taken in favor of the employees after that," says Purna Bahadur Kunwar, president of Employees Union NTC.

Rajendra Prasad Chaudhary, General Manager of NTC also does not openly support the dissolution plan of the three units. He is of the opinion that there is an urgent need to cut the number of staff in the central office and in other units for their sustenance.

"Overstaffing is the main problem, which can only be solved by introducing some sort of voluntary retirement scheme acceptable to all the concerned," he says.

He opines if only the required number of staff are kept laying off others introducing a golden handshake scheme, all units can be run successfully.

He claims that units such as TCS can sustain independently if the rates for transportation are increased. Presently, TCS delivers goods at Rs. 2.68 per kg from Birgunj to Kathmandu, a rate the government fixed about five years ago.

"If the government raises the fare for this public sector TCS, surely there would be no need for the government to dissolve it," he says adding, "Internationally, there are three people working behind every vehicle, but here, the number is as high as twenty."

Worsening financial condition of NTC, one of the largest public sector enterprises, prompted the government to form Deuja Commission for the assessment of the situation of NTC. Government decided to dissolve the three units based upon the report of the Deuja Commission.

NEPSE index surges

By a Post Reporter

KATHMANDU, Aug 13 - Nepal Stock Exchange (NEPSE) index last week registered a growth of 5.86 points.

The growth rate of NEPSE index for the past few weeks had been minimal. The rate of the previous week itself stood at 0.51 percent.

While the opening index for the week last Monday stood at 356.81, it closed at 362.67 at the end of the week's transaction on Friday.

On a group-wise basis, the index for commercial bank group rose from 397.63 to 407.37 last week. Similarly, each of the indices for manufacturing and processing and other groups increased from 321.11 to 322.72 and 321.29 to 322.72 respectively.

On the other hand, the indices for hotels and insurance groups each declined from 343.68 to 342.95 and 295.37 to 294.17 respectively. The index for trading group remained constant at 121.38.

Share trading in NEPSE floor last week was dominated by Himalayan Securities and Finance Company Ltd., which topped the list in terms of number of shares transacted and value of transaction.

In the total 23 transactions, 71,690 shares of the company were traded for Rs 15.14 million.

However, Nepal Industrial and Commercial Bank Limited (NIC Bank), which has mostly been topping the NEPSE floor since the listing of its shares on June 28, topped last week in terms of number of share transaction.

17,630 shares of the bank worth Rs 9.57 million were traded in 323 transactions.

The trading of the shares of Himalayan Securities and Finance Company Ltd in blocks considerably lifted the overall share trading in Nepal Stock Exchange last week by over 50 percent.

The decline in share trading that started more than two weeks ago in NEPSE floor had continued the previous week despite revival in terms of number of shares transacted.

In 613 transactions previous week, a total of 56,922 shares worth Rs 26.67 million had been traded. However, the number of transactions this week increased to 1051 in which 1,50,500 shares valued at Rs 55.59 million was traded.

Groupwise trading information reveals that the participation of commercial banks, which was usually over 90 percent, stood only at 61.08 percent. However, the percentage of share trading for the finance group increased drastically from the previous week's 1.56 percent to 29.75 percent. Similarly, the percentage share trading for manufacturing and processing, insurance, hotels, trading and other groups stood at 1.01, 1.93, 2.58, 0.03 and 3.62 respectively.

Forty-nine companies had quoted the purchase/sale price for the week with NEPSE, out of which shares of only 42 companies were traded.

NEPSE remained open for all five days last week.

Companies whose shares were traded in all the trading days last week were Nepal Bank (Rs 290-275), Nepal Arab Bank (Rs 1,401-1450), Himalayan Bank (Rs 1,700-1,750), Nepal SBI Bank (Rs 1,160-1,165), Nepal Bangladesh Bank (Rs 1,591-1,555), Everest Bank (Rs 965-980), Bank of Kathmandu (Rs 985-981), NIC Bank (Rs 500-480), Taragaon Regency Hotels (Rs 161-160), United Insurance Company (Rs 260-260), Premier Insurance Company (Rs 386-400) and People's Finance Ltd (Rs 300-300).

Likewise, companies whose shares were traded only four days last week include Nepal Indosuez Bank (Rs 1,500-1,650), Nepal Lever Ltd (Rs 2,235-2,265), Necon Air (Rs 235-236), Everest Insurance (Rs 455-455) and Kathmandu Finance (Rs 288-270).

Companies whose shares were traded only once this week include Hotel Yak and Yeti (30/18,000), Nepal Insurance Company (6/4,080), National Finance Company (50/23,500), Narayani Finance (25/9,625), Ace Finance Company (100/43,000), Pokhara Finance (90/16,650) and Goodwill Finance (40/10,000).

Economy, finance and market

By Supa Upadhyay

Domestic Money Market

The Average Weighted Discount Rate of 91-day Treasury Bills (TBs) decreased further to 5.89 percent this week. The NRB had received 23 bids worth NPR 935 million against the notified amount 670 million only. The Rupee was traded at 98.69 and lower at 98.66 for 91-day TBs. In the regular weekly auction, the NRB is going to issue 91-day TBs worth NPR 670 million on August 17, 2000.

Domestic Capital Market

The Stock Market picked up substantially to reach 362.67 this week. The NEPSE Index 100 opened remarkably higher from 356.07 by 0.74 points, fluctuated slightly during the week and moved up by 5.86 points to close in the weekend. Trading was estimated at 140500 shares valued atr NPR 55.59 million comapared against 56855 shares valued at NPR 26.67 million of the previous week. Commercial banks alone shared 61.08 percent of the total traded amount. Similarly, production sector, hotel sector, trading sector, insurance sector, financial sector and others shared 1.01 percent, 2.58 percent, 0.03 percent, 1.93 percent, 29.75 percent and 3.62 percent respectively.

Though brokers had quoted the price of more than fifty companies on the trading board, only 41 companies were actually traded in this week. Himalayan Securities, NIC Bank and Bank of Kathmandu registered the first, the second and the third most traded companies trading 72050, 19380 and 11140 shares respectively. Out of 41 traded companies, 16 companies gained, 10 companies lost and the rest remained constant at their previous prices.

Nepal Bank Ltd, NABIL Bank, Himalayan Bank, Nepal SBI Bank, Nepal Bangladesh Bank, Everest Bank, Bank of Kathmandu, NIC Bank, Taragaon Regency Hotel, United Insurance, People's Finanace and NEFINSCO were able to trade in all the five working days. Likewise, shares of Nepal Indosuez Bank, Nepal Grindlays Bank, Necon Air, Everest Insurance, Kathmandu Finance and Nepal Lever Ltd were traded in four working days.

Forex round-up

The Pound Sterling improved against the US dollar this week whereas Euro moved down significantly compared with the Greenback. Similarly, Japanese Yen slightly became weaker this week against US dollar. INR further weakened against US dollar this week. Since Nepalese and Indian currencies exchange rates are fixed NPR vis-a-vis US Dollar also changed heavily in favour of US dollar.