FNCCI chief demands rescue package

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HETAUDA, Oct 6 - Rabi Bhakta Shrestha, President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has demanded with the government to immediately bring an comprehensive rescue package to safeguard the domestic industry from the ongoing domestic and global economic slowdown. "An comprehensive rescue package is the need of present time to protect the entire industry from a complete collapse," he stressed.

Addressing the inaugural session of the second annual general meeting of Association of Industries of Hetauda Industrial Estate, he blamed the deteriorating law and order situation of the country and ineffective industrial policy of the government for the low pace of industrial development. "Such messy situation of the domestic industries has been further complicated by the imposition of new Income Tax Act, which is against the interest of the business community."

He also said that every consecutive governments formed after the restoration of democracy have been concentrated only in the political issues completely neglecting the problems of the business sector. He also flayed the government for not taking seriously the current problems of the domestic industry. "Though there should be cordial relationship between the government and the business community, the government has been completely ignoring various recommendations of the Federation due to which the Federation is loosing its patience". He also urged the industrialists to upgrade both the quality and productivity to face the emerging challenges posed by the globalization.

Addressing the function, Hitler Bishet, President of the Association said that insecurity has been the prime cause for slackness of the industrial activities. He also lambasted the government for not being able to provide necessary security even after imposing security tax.

He also demanded that the land owned by the industries inside the industrial estate should be transferred in the name of the concerned industry in the concession rate.

Directives aim at improving financial health

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KATHMANDU, Oct 6 - With an aim to improve the banking health of the country and to make it more efficient and reliable by incorporating various new measures, Nepal Rastra Bank (NRB), the central bank of Nepal, has issued and enforced eight various directives.

According to a press release issued by the NRB, the latest direction is particularly focused on revising the core capital, classifying loans and its provisioning, limiting the individual or sectoral loan sanctions and upgrading the existing domestic banking system to the international standard, by making the accounting and financial statements more transparent.

Among other, the new directives have introduced provisions related to risk minimization, institutional good-governance, inspection reporting and banking investment on shares and government securities, says the release.

Furthermore, the directives has defined core capital to include paid-up capital, share premium, non-redeemable reference share, general reserve and accumulated loss or profits.

Similarly, the supplementary fund, another part of the capital fund, cannot exceed the core capital amount. Assets revaluation fund, exchange gain/loss fund, general loss in loans and highbred capital and equipment fund would be kept under the supplementary capital, adds the release.

The ratio of the risk weighted assets, which is calculated on the weights of assets included in the balance sheet and the transactions excluded in the balance sheet with core capital, has been fixed at 4.5 per cent, 5 per cent and 6 per cent for the fiscal years 2001/02, 2002/03 and 2003/04 respectively.

Similarly, as per the directives, the ratio of risk weighted assets with the capital fund should be maintained at 9 per cent, 10 per cent and 12 per cent during the fiscal years 2001/02, 2002/03 and 2003/04 respectively.

The new directives have also classified the entire banking loans into four categories and have made arrangement for loan loss provisioning at 1 per cent, 25 per cent, 50 per cent and 100 per cent for good loans, inferior loans, doubtful loans and bad loans respectively.

Those loans interest and principal on which has been defaulted for more than 3 years for the fiscal year 2001/02 and 2002/03 should be classified as the bad loans. Similarly, loans arreared by more than 2 years by the fiscal year 2003/04 and by more than 1 year by the fiscal year 2004/05 would be put under the category of bad loans.

Based on the core capital of the bank, the directives have slashed down the single borrower’s limit and the group borrower’s limit. Under the new provisions, the maximum loan investment of a bank based on fund based loan should not exceed 25 per cent of its core capital for single borrower or group of borrowers. Similarly, for non-funded loan investment, the limit should not be more than 50 per cent of the core capital.

However, the limitation of fund based loan investment, which were extended before the imposition of the new directives, should be brought within the 40 per cent and 25 per cent of the core capital by the end of fiscal year 2001/02 and 2002/03 respectively. In the like manner, similar kind of loans extended on the basis of non-fund need to be brought under 75 per cent and 50 per cent of the capital by the end of fiscal year 2001/02 and 2002/03, the release concludes.

Gold, silver dealers stress on market exploration

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KATHMANDU, Oct 6 - Gold and silver dealers gathered at a programme have stressed on the need of professional training facilities to the goldsmiths to cope with the growing competition and to explore the possibility of gold ornament exports to the international market.

They also expressed their deep concern over the growing penetration of foreign gold craftsmen and investment in the domestic gold market, and urged the government to take necessary steps to check such inflow to safeguard centuries old indigenous gold ornaments market of the country.

Addressing the fourteenth annual general meeting of Nepal Gold Silver Dealers’ Association, Chiranjibi Wagle, Minister of Physical Planning and Construction urged the gold dealers to upgrade quality and design of gold ornaments to enhance its competitiveness in the international market. "We need concentration to upgrade our traditional methods through proper training to withstand the challenges evolving out of globalization."

He assured the gold entrepreneurs that the government is ready to extend every possible cooperation. Referring to the security problems raised by the dealers, Minister Wagle admitted that there were some shortcomings in providing due security to them, but assured that the government will take appropriate steps to provide enough security to the gold dealers.

Speaking on the program, Rajesh Kaji Shrestha, President of Nepal Chamber of Commerce praised the various activities of the Association in promoting the gold business by protecting their interest and urged them to face the emerging challenges. "The only way to weather the challenges is to up to date the ornaments by understanding the changing choice of the consumers."

He also said that the chamber is ready to cooperate with the Association in providing necessary support for the training and promoting the export of gold ornaments.

Tej Ratna Shakya, President of the Association said that the government should come forward to protect the interest of the gold dealers by providing much-needed training to enhance the competitiveness of the industry. "Since the gold ornaments business is labor intensive, it is playing an important role in generating employment opportunities and hence is contributing in the government efforts to fight against poverty."

Hem Bajra Shakya, Vice President of the Association highlighted various activities of the Association and urged for more unity and devotion among the dealers to make its activities successful.

Nepse Index rises, stock market confidence rebounding

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KATHMANDU, Oct 6 – The improvement in the Nepal Stock Exchange (Nepse) Index this week, boosted by a soar of 10 points in the index of the commercial banks, has restored some confidence of the investors in the stock market.

According to the information compiled and disseminated by Nepse, the index during this week, soared by 5.88 points recording the increment from 276.46 points on the opening on Monday to 282.34 points on closing on Friday.

During the last week the index had plunged by 3.58 points diving from 279.65 points to settle at 276.07 points, while the index two weeks back had soared by over 10 points

In the group wise manner, the index of commercial banks showed the soar of around 10 points and settled at 287.37 points from the 277.73 points recorded on the opening day. The index of this group had plunged by 4 points last week with the closing at 276.07 points from 279.65 points. The index two week ago had shown the robust growth of 16 points.

Similarly, the index of Insurance and Finance group recorded a marginal increase of around two points to touch 316.25 points from 314.52 points. The index of this group had marginally declined last week to settle at 313.82 points from 314.21 points.

The index of hotel group declined this week from 263.37 points to 257.53 points. The index of this group remained unchanged at 263.37 points last week. The index of manufacturing and processing group and trading group showed no change this week and remained as it was at 306.85 points and 100.14 points respectively.

The index of others declined marginally from 154.96 points to settle at 152.86 points. The index last week had also declined to touch 158.39 points from 167.52.

In group wise market participation, the commercial banks group continued to dominate the share transactions and retained its first position capturing 78.84 per cent total transactions of this week total share trading. The market participation of this group in the last two weeks was 54.87 per cent and 89.05 per cent respectively.

During this week’s transaction, the participation of finance group was recorded 18.30 per cent to stay at the second spot. The group has captured 27.05 per cent the last week and a share of 9.91 per cent in the previous week.

The participation of insurance group this week was recorded to 1.5 per cent. The index of this group last week was recorded to be 2.05 per cent. In the like manner the indices of the manufacturing and processing group was 0.97 per cent and hotel group was 0.25 per cent during this week. The indexes of these groups in the last week were 6.47 per cent and 3.05 per cent.

Similarly, the participation of others was 0.14 per cent while there was no transaction was recorded for the trading group.

In terms of number of transaction, value of the transaction and number of share units, Bank of Kathmandu was ranked at the top position with 129 share trading of 1211 units of share that valued at Rs 4.6 million.

During this week 672 share transactions were recorded that transacted 35,075 units of share that had a value of Rs 15 million whereas 54,944 units of share were traded that worth Rs 20.71 million in the last week.

The Nepse market remained open for all five days of the week. Those companies whose shares were traded during all the fives days include

Nepal Bank, Nepal Arab Bank, Nepal SBI Bank, Nepal Bangladesh Bank, Everest Bank, Bank of Kathmandu, NIC Bank, Nepal Merchant Banking and finance, Siddhartha Finance and Lumbini Finance. Similarly, the companies whose shares were traded for four days include Nepal Indosuez Bank, Standard Chartered Bank, Himalayan Bank, Premier Insurance and Ace Finance.

Those companies whose shares were traded only one day include Harisiddhi Bricks and Tiles, Yak and Yeti Hotel, Annapurna finance and Lalitpur Finance.