Nepalese stock market plunged 5 pts

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KATHMANDU, April 14 - Gloom hovering over the speculative investors Nepalese stock market deepen further as the market plunged again by over five points during weekly transactions.

During the weekly transaction this week, the stock market lost 5.82 points to remain at 369.05 points. This latest slump of the share market was due chiefly to the continued declines in the share prices of the commercial banks, which commands lion’s share transaction.

According to the weekly share information complied and disseminated by the Nepal Stock Exchange (Nepse), the opening index on the first day of trading on Monday was 374.87 points, which slumped to touch 369.05 at the end day of trading on Friday.

While analyzing the group-wise basis performances during this week, the domestic market revealed a mixed pictures. The indices of the commercial bank group and insurance and finance group tumbled while indices of cottage group, hotel group, trading group and other group surged. Similarly, index of manufacturing and processing group remained unchanged during last week’s transactions. The index of commercial banks, which captures majority of share in the Nepalese money market since the earlier days of Nepse, witnessed a record-level plunge of over 70 points and remained at to 408.74 points from 479.39 points, faltering the confidence of financial investors. The group, last week had recorded a marginal decline of two points and had remained at 417.58 points.

Similar huge dive was also observed for the insurance and finance group, whose index, during the period, sinked by over 20 points and settled at 332.63 points from 352.42 points. Its index during the transaction last week has surged by almost eight points to remain at 341.89 points.

However, the indices of hotel group, trading group and other group recorded a swell. The indices of hotel group and trading group witnessed a marginal soar of four and one points to remain at 304.69 and 117.18 points from 300.01 and 116.68 points respectively. Similarly, albeit huge, increment was also recorded for other group, whose index sprouted by around 15 points and touched 220.58 from 205.74 points. However, the index of manufacturing and processing group remained unchanged throughout the week and stocked at 340.13 points.

After a remarkable revival to capture its lion’s share from record-low participation around 60 per cent last week of March, group-wise trading information for this week reveals that the participation of commercial banks again tumbled further to capture just 55.16 per cent from 89.89 per cent last week.

The participation of finance group, which has faced series of slumps since last few weeks, made a dramatic increment and captured 41.47 per cent of the total transaction. Such participation, during last week was only 2.95 per cent and 4.93 per cent recorded two weeks back. Its participation, during the last week of March, was as high as 38 per cent. Similarly, the contribution of insurance group again dived to capture1.47 per cent from last week’s 3.83 per cent and 1.76 per cent observed two weeks back. Similarly, the participation of manufacturing and processing group, hotel group, trading group and other group, during this week’s transaction, stood at 0.56 per cent, 0.71 per cent, 0.16 and 0.49 per cent respectively.

Despite the plunge in the Nepse index, the volume of transaction remarkably surged this week. During this week’s transaction, a total 118,694 units of share valued at Rs 40.96 million were transacted in 864 transactions. The Nepse floor last week had witnessed a total of 563 transactions in which a total of 35,229 shares valued at Rs 31.58 million were traded whereas, trading in the previous week stood at 41,304 shares units valued over Rs 34.8 million 710 transactions.

During this week’s transaction, 57 companies had quoted their price for trading, out of which, shares of 42 companies were traded. Nepse, during last week, remained open for all five days.

Companies, whose shares were traded for all five days this week, include Nepal bank Limited (Rs 740 - 450), Nepal Arab Bank (Rs 1,640 - 1,625), Nepal Grindlays Bank (Rs 1,390 - 1,240), Nepal Bangladesh Bank (Rs 1,390 - 1,240), Bank of Kathmandu (Rs 1,035 - 1,020), NIC Bank (Rs 485 - unchanged), Taragoun Regency Hotel (Rs 110 -105), Nepal Share Markets (Rs 200 - unchanged), Sagarmatha Insurance (Rs 221 - 212), Lumbini Finance and Leasing (Rs 251 -245) and Necon Air (Rs 136 - 148).

Similarly, companies whose shares were traded for only one day include Nepal Welfare Company (50/4.500), Samjhana Finance (50/6,950), Nepal Indosuez Bank (13/20,085), Nepal SBI Bank (10/15,970).

India bars importing Nepali milk

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MORANG, April 14 - India has stopped importing milk from Nepal after the Biratnagar-based Dairy Development Corporation increased the export price.

The complete halt in the export came after Cooperative Dairy of Jalpaighudi, West Bangal refused to buy milk from Nepal in the increased price. As per the understanding reached with the Cooperatives on last August, the corporation has been exporting 6,000 liters of milk per week. However, the sudden decision of the Corporation to raise the price from Rs 9.30 to Rs 10.05 has frozen the export jeopardizing incomes of thousands of local farmers.

Justifying the increment, Ram Tapeshor Choudhary, Regional Chief of the Corporation, said that the Corporation has been forced to increase the price after the purchasing price of milk was increased in last December.

However, the latest decision to increase export price by Rs 0.75 doesn’t match with the argument since the corporation had raised the purchasing price by just 10 paisa.

Choudhary further informed that the Corporation has been profit less while exporting milk to India. "Since the export price is equal to the purchasing price, we have been not been able to enjoy any profit."

He further said that the corporation has been exporting milk to India due to the excess production.

After India refused to buy milk from Nepal in the increased price, the corporation has started giving especial attention in butter production using the surplus milk. Choudhary said that the complete freez in the export is not a big problem. "The real existing problem is the low consumption and no export of butter and the Corporation is trying hard to increase the export of butter," he added.

The low local consuption of butter is the major problem that the Corporation is facing at the moment. Though Kathmandu Valley is the biggest market for butter, the plunging demand there too has complicated the situation.

Army mobilization blamed for commodity price rise, disheartens small traders

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KATHMANDU, April 14 - Following the mobilization of army at various major customs points, almost 1,000 small traders have been displaced, pushing the prices of consumer goods which has directly affected the local markets including the one at the Bhrikuti Mandap.

The government deployed the army at the major customs points at the borders with India and China from the second week of March.

The revenue collection has increased since the army patrolling started at the customs points, but it has snatched away the job of the small traders, who used to earn their living through smuggling into goods from the abutting cities of India and China.

Prices of consumer goods like ready-made garments and clothes at local markets such as Bhrikuti Mandap and others popular ones with the middle, lower-middle and the lower level consumers has gone up by at least five to ten per cent.

Shankar Lama, resident of Ichwok -7 of Sindhupalchowk district, who has been buying goods from Tatopani and Khasa, two minor markets in Tibet, and selling them in the local markets, has decided to abandon the job, due to strict monitoring at the customs points by the army. Lama and such other small traders evade the customs duty to take a thin margin from the goods.

"The army even ask to pay customs duty for a single item. Even if we say that it is a sample, they do not let us go without paying the tax. Our days are gone. Those who have money can buy goods by opening letter of credit (LC), but it will make the goods expensive", he said.

Echoing Lama, Ram Chandra Bhandari, member of Small Trader Workers Association, said that the price of consumer goods has gone up by five to ten per cent.

The open small markets are scattered at Baneshwor, Lagankhel, Jorpati, Gaushala, Chabahil, Kalanki, Koteshwor, Mangalbazaar, Sundhara and New Bus Park including at Bhrikuti Mandap, which houses around 1,500 shops makes altogether some 3,000 shops. On average, they make a transaction of around Rs 4.5 million a day.

Apart from these, there are many wholesalers who solely depend on Chinese merchandise, who either bring goods directly from Tibetan outlets or buy them from middlemen.

However, local shopkeepers say that the deployment of army has not affected their business. Their argument: buying goods from those middlemen results in varying prices of the same item as they want to make more profit. This makes us difficult to sell goods in the competitive market, says Dev Raj Bastola, who sells footwear at Bhrikuti Mandap.

Once the goods are imported legally, it will make the market price stable. It is easier for us, but will be difficult for the clients as the prices go up. If illegal trading is controlled, Nepalese products will find market, Bastola adds.

If it discourages bigger smugglers, it is a good thing but, if it is just meant to dishearten the small traders, it does not send good signal, says Laxmi Prasad Oli, another small shopkeeper at Bhrikuti Mandap.

But Lama says, once the small traders stop supplying goods to the wholesalers and other big shopkeepers, there is every likelihood of wholesalers forming cartel, which will again hit the consumers.