Cease-fire revives stock market
Index rises over 9 points in a single day

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KATHMANDU, Feb 3 : After a long spell of bearish trading in the country’s only secondary market for securities transaction, the market confidence today rebounded, which is reflected by a substantial rise in the stock index, a barometer to investors’ confidence.

The Nepal Stock Exchange (Nepse) index today climbed by 9.76 points. This is the second time in over three years that the stock index went up by over nine points. Against the index of 213.30 today, the index at the end of weekly trading last Friday stood at 203.54.

With today’s gain in the stock exchange, the market capitalization of stock, which measures the cumulative wealth of investors, rose by 4.77 per cent. Against the stock capitalization of Rs 33.02 billion at the end of trading Friday, the capitalization today touched Rs 34.6 billion.

Stock prices of all commercial banks increased today (see Nepse share trading list). The rise in prices of shares of commercial banks, which command a lion’s share in the total stock trading at the Nepse floor, directly explains the rise in the Nepse index.

Experts thank the last week’s cease-fire announced by the government and the Maoist for a rebound in market confidence. However, they also point out that anticipation of dividends as the accounts of many banks approach closing is another reason for such gain in stock performance.

"The revitalization in the stock market trading is mainly due to the latest cease-fire ending the spate of violence," Mukunda Dhungel, General Manager of Nepse said, talking to The Kathmandu Post. "Confidence of investors have certainly gone up following such assurance from the government and the Maoist for peace," he added.

Likewise, Bishnu Chapagain, President of Nepal Brokers’ Association, and Jagdish Agrawal, former president, also attest that the rise in stock prices and index is a result of an anticipation of a more peaceful future and better business conditions.

Said Agrawal, "The rise in the index can be attributed to a chance that investors got to invest their capital, which had been lying idle." Only peace and security can help boost economic activities, which in turn helps increase returns. Investor’s confidence bears a direct relation with a conducive environment to conducting business, he added.

He elaborated that a sudden single-day increment in the index is mainly due to the rush of investors to the stock market for ‘buying’. A substantial amount of cash must have been lying in the hands of investors, especially because of the fact that even commercial banks are providing low rate of return lately.

Chapagain stated that the rise in the index today is primarily caused by the cease-fire. However, he added that the fact that accounts of many banks are now approaching for closure date has also played a role in pulling up the stock prices and the index.

Officials denied speculating stock price movement over the rest of the week. Nonetheless, they added, "The general mentality of the investors would only be clear by studying the market trend for a few more days."

However, independent experts anticipate a further gain in stock prices and, hence, index in the days to come. "Given the likelihood that the cease-fire reached by the two warring sides would last this time, stock market performance can be expected to run high in the future."

Nepal’s stock market performance had been on a continuously downhill trend since a single-day market crash that saw the index spiral down by over 22 points in February 2001. Further weakening of the stock was as a result of the clamping of a state of emergency in November 2001.

The spate of arson and attacks carried out by the Maoist insurgents, many of them even against business establishments, and even before the state of emergency was imposed, was the core reason for waning secondary market confidence. Despite today’s gain, the stock market is way below what it had achieved over two years back. The index that closed at 213 points today had once touched an all time high of over 545 points.

Govt licenses two more casinos

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KATHMANDU, Feb 3 : In a latest attempt to aid the ailing tourism industry, the government has recently issued operating license to two five star hotels – Hayatt Regency and Radisson – to operate Casinos in their premises. Ministry of Culture Tourism and Civil Aviation issued the permission last week.

According to government officials, the licensing of new casinos is in line with the government’s effort of promoting tourism industry by adopting various policies and programmes. Casinos have remained attractions for recreation and entertainment for foreigners in this Himalayan Kingdom.

Confirming the report, State Minister for Culture, Tourism and Civil Aviation Ravi Bhakta Shrestha said that the latest decision of the government would help in boosting the tourism business. He further said that the two hotels had applied for acquiring operating license of casinos long time back. This decision has come as part of our effort to clear the pending works.

Minister Shrestha said, "As the casinos currently in operation are doing good business and have contributed to attracting a good number of tourists, the operation of new casinos would help to expand the casino business."

The newly opened casinos like the existing ones would have to pay a royalty of Rs 13.5 million to the government each year. Besides, they will be liable to pay corporate tax as per existing rules. The standing laws on casinos prohibit Nepali citizens prohibited from gambling in any casino inside the country.

Currently four Casinos – Casino Nepal, Casino Royal, Casino Anna and Casino Everest – all owned by R D Tuttle, a US born entrepreneur, are in operation in Kathmandu.

Casinos have remained one of the major attractions for Indian tourists that make up more than one-third of total tourists arrivals to Nepal. Besides the Indians, all other foreign nationals visiting Nepal also frequently visit the casinos.

As per the unofficial figures, more than 95 per cent of the total casino visitors are Indians, 4 per cent are from Bangladesh, Pakistan, Tibet, while the remaining one per cent are the Europeans and Americans.

Since China has enlisted Nepal as its one of the outbound destinations, experts here believe casino can be a major attractions for the Chinese citizens. So far, China has no legalised gambling like casinos.

Until ‘The Caravel’, India’s first live gambling casino was opened in Goa in November 2000, Nepal enjoyed a monopoly in all forms of legal gambling in entire South Asia. Nepal had entered in legal gambling in the region in 1990.

After the opening of Casino Nepal in the premises of Soaltee Crown Plaza, a five-star hotel in the capital, the legal gambling was expanded throughout the capital to all five star hotels.

The 24-hour service of the casinos that serve free drinks, meals along with free transportation is the major attractions for the gamblers.

‘Reform character for dev’

BHADRAPUR, Feb 3 (RSS) - Minister for Industry, Commerce and Supplies Mahesh Lal Pradhan has said all should reform their character for the development of the country.

Speaking at a programme organised by Jhapa Chambers of Commerce here today he said economic sector should be given priority for the development of the country.

His Majesty’s Government is effortful to resolve the problems of the industry sector he said adding that the local level businessmen should resolve the local problems locally.

The cease-fire between the government and the Maoists is the achievement of the present government and the role of all political parties and the civil society will be very important to make the talks successful.

Acting president of the Federation of Nepalese Chambers of Commerce and Industries (FNCCI) Binod Bahadur Shrestha said the FNCCI is committed to work for the welfare of the small entrepreneurs.

Minister urged to revive tourism industry

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KATHMANDU, Feb 3 : An interaction between a delegation of Hotel Association Nepal (HAN) and Mahesh Lal Pradhan, Minister of Industry, Commerce and Supplies was held today, states a press release issued by HAN.

During the meet, senior office bearers of HAN informed the minister of various factors responsible for the downturn of the tourism industry of the country. The delegation, led by Narendra Bajracharya, President of HAN requested the minister for taking immediate reform steps to bail out the ailing tourism industry from the current crisis.

The HAN delegation presented various demands to the minister including providing lower rate interest loans and setting the electricity charge for hotel industry equal to other industries, among others.

Similarly, the HAN officials also demanded to privatise the Royal Nepal Airlines Corporation (RNAC). Likewise the delegation also asked the government to adopt open sky policy.

Meanwhile, minister Pradhan assured the delegation of immediately responding to the demands.

Nepal-India railway talks to be held next week

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KATHMANDU, Feb 3 : Even as India is yet to submit the committed proposal on customs procedures to end deadlock on much-sought bilateral railways agreement, both the Nepali and Indian government have agreed to hold the third round of five-day negotiations on railway agreement and trans-border movement of motor vehicles in Kathmandu next week.

"The government today decided to hold the joint secretary level negotiations from Feb 8 to 12," said a government source talking to The Kathmandu Post. The date has been fixed as per the proposal forwarded by India last week.

As per the schedule, the two countries would discuss Regulations on Trans-border Movement of Motor Vehicles (RTMMV) on the first two days of the talks, while talks on Nepal-India Railways Agreement (NIRA) would be held in the remaining three days.

The earlier two rounds of talks on these issues were held in Kathmandu from April 29 to May 2 and in the Indian capital of New Delhi from September 9 to 12 last year respectively.

"However, the Indian government has not yet forwarded a proposal on customs procedures, which it had committed to submit before the third round of talks," the source stated. Even the Indian commerce secretary talking to The Kathmandu Post had stated of forwarding such proposal in the nearest future about four months back. The proposal was supposed to be discussed during the talks.

Nonetheless, such a proposal might be submitted by this weekend, the source said. Chhabi Raj Pant, Director General of Department of Transport Management (DoTM) would lead the Nepali team during the talks on the RTMMV, while Purushottam Ojha, joint-secretary at Ministry of Industry, Commerce and Supplies (MoICS) would head the negotiation team for NIRA. Other members of the negotiation teams would be finalised on Tuesday, according to the source.

"The government is under a serious pressure to materialise railway agreement at the earliest. However, the issues would be picked up from where it was left during the last negotiation," he said. As of now, both the sides have concurred on the technical aspects of the railway operation modality. However, these are still to converge on the issue of customs clearance.

While Nepal has been asking for a ‘One-Time-Lock-System’ ensuring direct entry of containers in the inland container depot (ICD) at Sirsiya, Birgunj once the same is inspected and locked in Kolkata, the Indian side has been urging for inspecting the containers at Raxaul customs, among others.

The NIRA is important to the country for operating the Birgunj-based multi-million dollar ICD. The government must bring it into operation by September this year when the extended deadline of the ICD project matures.

The construction of the ICD was completed about two years back and its operation is expected to slash transit cost by almost 40 per cent, as it has a direct railway linkage with Kolkata port.

Referring to negotiations on the RTMMV, the source said that the Nepali side would be more flexible on the movement of motor vehicles. "The government already proposed linking Krishnanagar, Kakarbhitta, Mahendranagar, Dhangadhi, Janakpur, Nepalgunj, Bhairahawa, Birgunj, Biratnagar, Pokhara and Kathmandu with major Indian cities," he added.

Such willingness has been expressed through a proposal that the Ministry of Labour and Transport Management forwarded to the Indian counterpart over a month ago. "However, the Indian side has not forwarded the similar proposal as of yet," he said. During the last negotiation, both the sides had agreed to exchange proposals on the matter for discussion during the third round of talks.

Nonetheless, Nepali side would seek to establish a level playing field in the entry of vehicles to and from the respective countries, he added. Currently, Nepali vehicles need to submit a bond of Rs 50 thousand and insurance papers to the Indian Embassy for obtaining permit to enter India, while the Indian vehicles can ply any part of Nepal for 72 hours by depositing just Rs 300 at the Nepali customs point.

Garment exports rise for sixth straight month

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KATHMANDU, Feb 3 : Garment exports to the United States, which absorbs over 85 per cent of the total readymade garments exported abroad from Nepal, recorded an increment for a sixth straight month.

Export data released by Garment Association Nepal (GAN) today reveal that exports to the US increased by over 48 per cent in January 2003 as compared to the exports of the same month last year.

Garment exports to the US has been on an upturn since August 2002, prior to which it had declined for thirteen consecutive months. However, despite the increments over the months, the dollar value of exports is not yet up to the mark of 2000 and 2001.

Against the export value of US$ 11.06 million in January last year, exports in the first month of 2003 touched US$ 16.33 million. Exports in the like period of 1999 and 2000 was, however, higher at US$ 25.87 million and US$ 20.25 million respectively.

In the past six months, monthly garment exports to the US increased in a range of 33 per cent to 63 per cent as compared to the corresponding period a year ago. Despite such increments in the last five months of 2002, the total garment exports to the US, negated by whopping declines in the first seven months, had plunged by over 22 per cent.

The cumulative exports of readymade garments from Nepal to the US in the past six months stand at US$ 69.74 million, which is over 50 per cent higher than that exported in the like period a year ago. The six-month cumulative exports then stood at US$ 46.45 million, against the exports of US$ 76.79 the previous year.

Likewise, despite the small size of the market, garment exports continued to enjoy a positive and high growth rate even in Canada. Readymade garments worth US$ 68 thousand was exported in January this year, which is over 1100 per cent higher than that of January last year.

The garment industry, which still ranks as the highest foreign currency-earning sector of the country, has been passing through rough period since the US decided to grant duty- and quota-free market access to Caribbean and African garments in 2000.

Entrepreneurs are still hopeful that the US government would consider the disastrous socio-economic impact that the fallout of the country’s garment industry would have on employment and income levels, and grant the same concessions that it is providing to the African and Caribbean countries.

Indian envoy stresses on more joint ventures

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KATHMANDU, Feb 3 : Indian Ambassador to Nepal Shyam Saran has underlined the need for increasing the number of Nepal-India joint ventures to spur the Nepalese economy to a robust growth.

Speaking at the inaugural function of a new branch office of Everest Bank Limited (EBL) in Kathmandu, Ambassador Saran expressed the view, states a press release received here today.

Appreciating the successful joint venture of EBL with the Punjab National Bank of India, the Indian envoy observed that such joint venture experience could also be emulated in other sectors as well.

Governor of Nepal Rastra Bank Dr. Tilak Rawal inaugurated the branch office at Lazimpat, where the EBL has also shifted its corporate office.

Dr Rawal appreciated all round growth made by the Bank at a time when the entire financial sector of the country is facing severe hardship. He also praised the EBL for sharing various NRB concerns in stressing transparency and healthy capital adequacy.

BM Sharma, General Manager of Punjab National Bank India, was also present on the occasion. Sharma reiterated the PNB’s commitment to providing continuous support to the growth and progress of the bank in the years to come with the transfer of latest technology and management expertise.

Chairman BK Shrestha and other executives of EBL informed about the progress of the Bank. Everest Bank Ltd commenced its operation in October 1994. A joint venture agreement with PNB India, was signed in January, 1997. PNB is one of the leading commercial and largest nationalised banks of India having a network of more than 4,000 branches.

Timely renewal of Nepal-Pak trade stressed

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KATHMANDU, Feb 3 : Pushkar Raj Rajbhandari, newly appointed Royal Nepali Ambassador to Pakistan has pointed out the need of timely renewal of bilateral trade relation with Pakistan by identifying the potential businesseas of technical support in both the countries, states a press release issued by Nepal Chamber of Commerce (NCC).

During the interaction with Rajesh Kaji Shrestha, President of NCC, Rajbhandari further stressed that identification of potential business areas are prerequisites for any initiation of diplomatic exercise in order to strengthen the trade relation between the two countries.

Pakistan being the potential market of Nepali pashmina, Shrestha demanded with the government to make more concrete efforts to promote Nepali pashmina in Pakistan. "Nepali envoys should be active to identify the business demand between the countries in order to strengthen the economy of the country," added Shrestha.

Elaborating the immense potential of Nepali produce including lentils, cardamom, pashmina in Pakistan, Shrestha requested the government for taking immediate initiation towards promoting the ailing export business of Nepal.

Mid-western RDB incurs loss of over Rs 23.4 m

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NEPALGUNJ, Feb 3 : Mid-Western Rural Development Bank (RDB), devoted to its efforts to promoting the living standards of rural women, has been in a loss of Rs 23.4 million during the eight years of its establishment.

According to the Bank, the loss owes to the closure of its 22 branches due to security reasons, increasing interest rates of the amounts loaned from other commercial banks and failure to collect the floated money as loan to the rural women.

His Majesty’s Government so far has granted Rs 18 million to the bank, which never showed itself in profit.

The Bank, which was established in 2051 B.S. with an aim to extend its services in 15 different districts, has 18,740 members under 3,748 groups.

The Bank so far has 276 complete and 262 partial centres. According to Executive Director of the Bank Prabhakar Mishra, more than Rs 20 million is to be collected from the members who had received loan from Panchkule, Gadhawaand Hikuli branches of Dang district and Rajapur, Magargadi and Bhurigaun branches of Bardiya districts.

These branches have been closed for more than a year based on security reasons.

Although the bank had targeted at extending its branches in all the 15 districts of the region, it has nost been possible in establishing any branches in mountainous districts due to the poor security measures and slack management of the Bank, says Chairman of the Bank Tul Raj Basyal.

New soft drinks to splash Nepali market

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KATHMANDU, Feb 3 : SS Impex has brought a new range of soft drink ‘RC Cola’ in the Nepali market, through Partex Group of Industries Bangladesh, states a press release issued by the company today. Awarded with International Standard ISO 9001:2000 and recognised for being the trendsetter in introducing portable can, the new soft drink is manufactured by a US-based company ‘The Royal Crown Cola International.’

The company is planning to introduce the soft drink in five brands, namely RC Cola, Diet RC Cola, Royal Crown, Royal Cloudy Lemon and Upper Ten. The soft drink series is available in different flavours such as cola, orange and lemon. All beverages are filled in 250-aluminium can.