Banking sector dominating share market

By A Staff Reporter

Kathmandu, June 29: With the increase of transaction of shares in the trading floor, there has been a slight increase in the index of the Nepal Stock Exchange this week. According to stock market analysts the share market will start go up.

A total of 35268 shares amounting to Rs 93,95,623/- were traded through 553 transaction this week, whereas a total of 30031 share were traded at Rs 49,25,066/- through 277 transactions.

The NEPSE index has increased by 0.07 this week. The index, which was 229.10 at the opening hour on Monday, closed at 229.17 points on Friday.

The index of commercial banks has declined to 200.00 from 220.38. The index of manufacturing sector has increased to 284.14 from 283.22, the index of hotel sector has also increased to 220.33 from 216.87. The index of trading sector has remained to 103.83 and the index of insurance has increased to 312.19 from 311.19.

There has been a slight decline in the index of finance sector. Its index has declined to 257.24 from 258.72.

Out of total transaction, the commercial bank has occupied 71.29 per cent, manufacturing sector has covered 2.73 per cent, hotel sector has covered 2.08 per cent, trading sector has occupied 0.05, insurance sector has covered 1.36 per cent. Similarly the finance sector has covered 20.18 per cent and development bank has 2.10 per cent. The other sector has covered less than one per cent.

In terms of transaction, the Lumbini Finance Company has the heighest transaction. the Lumbini Finance had 68 transaction each day. In terms of number of transaction of shares, the Bank of Kathmandu (BoK) is ahead of other. A total of 7491 shares amounting to Rs 20,64,438 were traded.

According to the NEPSE, the companies that remained open for four days were the Standard Chartered Bank, (Rs 1590-1562), Nepal Bank Ltd. (Rs 545-535), the Everest Bank Ltd (Rs 460- 455), the Bank of Kathmandu (Rs 275-276) the Nepal Bikash Bank (Rs 166-165), and the Nepal Merchant and Company (Rs 223-221).

Other companies that remained open for three days were Himalayan Bank, Oriental Hotels Ltd, Nepal Share Market, Kathmandu Finance Ltd, Lumbini Finance, Siddhartha Finance and Sagarmatha Insurance Company.

The compnaies that remained open for only one day were the Salt Trading, the Nepal Investment Bank Ltd., the Rastriya Bima Sansthan, the National Life and Insurance, the Annpurna Finance, the Mahalaxmi Finance the Alliance Insurance and the Peoples Finance.

Strengthen corporate governance: NRB

By A Staff Reporter

Kathmandu, June 29: The Nepal Rastra Bank (NRB) has cautioned the public financial institutions that it would not remain silent if they violate the norms of corporate governance.

The NRB as a regulatory body will accord a top priority to maintain the governance in the financial institutions, said deputy governor of the NRB Ram Babu Pant here today.

Speaking at a seminar on the "Role of Corporate Governance in the Operation of Financial Institutions" organised by the NRB – Non- Banking Inspection and Supervision Department, deputy governor Pant said, "Lack of corporate governance in the financial sector has mounted several problems in the country's economy." The domino effect of poor governance has crippled the discipline in the financial sector. Hence, the NRB is taking strong measures for the consolidation of corporate governance in the financial institutions. The proper utilisation of public deposit and economic growth largely depends upon the corporate governance therefore financial institutions should always be careful about it.

Deputy governor Pant also announced that the NRB would take strong action in case of violation of the norms of the corporate governance. The failure of corporate governance in the financial sector would trigger a big chaos, he said.

Tulasi Prasad Uprety, executive director of the Non-Bank Inspection and Supervision Department at NRB said financial institutions should be made aware about the corporate governance so that any "irregularities and mismatch" could be checked.

Uprety further said that financial institutions through corporate governance could check the risk of liquidity, risk of global phenomenon and risk of peace and security problems.

He said that the corporate governance would help prop up economic activities to a great extent.

Upreti also informed that an audit committee would be formed to monitor the activities of the financial institutions. Besides, Board of Directors of financial institutions would be made more responsible for the effective implementation of corporate governance.

Bhola Ram Shrestha, Director of the Non- Banking Inspection and Supervision Department at NRB said that the seminar would help create awareness among the promoters of the financial institutions.

Presenting working paper Ajay Ghimire, chief executive officer of ACE Finance said that the governance should begin from the top. "If we talk about the governance, reform within the financial system should begin from the Ministry of Finance and Nepal Rastra Bank," he said.

If we talk about a reform within a financial institution it should begin from the selection and election of Board of Directors and then the recruitment of key management officials of the financial institutions, Ghimire said.

Bhola Ram Shrestha and Samir Nath Pyakurel while presenting a working paper on "NRB Regulations on Corporate Governance for Finance Companies" explained various facets of corporate governance.

They said that the corporate governance would enhance the productivity of the Nepalese financial institutions.

Out of 200 plus billion rupees total deposit, banking sector has the deposit of 180 billion rupees. Similarly, the financial institutions have the deposit of 13 billion rupees (seven per cent). The contributions of cooperative sector in the total deposit are two billion rupees.

Representatives from 30 financial institutions are participating in the seminar. The number of financial institutions operating throughout the country is 57.

It may be recalled that the NRB has already introduced a separate regulatory mechanism for the financial institutions in early January this year.

The NRB is carrying out various measures to promote corporate governance in financial institutions in the country.