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April, 2004 |
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Biznews |
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NCC Bank’s IPO Announcing the
largest initial public offer (IPO) of the country so far, officials of
Nepal Credit and Commerce Bank Ltd. (NCCB) are hopeful of substantial
oversubscription for Rs. 210 million worth of the company's shares as
the investors are seen enthusiastic about the stocks of the banking
sector companies. About 105,000 applications were received in a recent
IPO of Kumari Bank Ltd. The NCC Bank
offer is being marketed with the slogan “Aajako Ropai, Bholiko Kamai”
(sow today, reap tomorrow). Established seven years ago as Nepal Bank
of Ceylon Ltd. under a joint venture between Sri Lanka’s Bank of
Ceylon and Nepal’s NB Group, the company’s name was changed to Nepal
Credit and Commerce Bank Ltd. after the Sri Lankans withdrew their
investment two years ago following a substantial erosion in the net
worth of the Nepal operation. Under all-Nepali management since then,
the bank has improved its profitability substantially, it is claimed. The financial highlights made public in
the prospectus of the IPO show that though the bank had incurred a loss
of Rs. 400 million in fiscal year 2001-02, it was in Rs. 89 million net
profit in 2002-03. With Rs. 33 million as operating profit already
recorded for the quarter ended on mid-October 2003, the prospectus
expects Rs. 171 million to be the net profit of the bank (after
provisions) in the ongoing fiscal year 2003-04 and Rs. 195 million in
2004-05. Narendra Bhattarai, MD of NCCB, informs
that three branches (one each at Pokhara, Kalaiya and Chabahil) are
being opened by mid-April followed by three others in the coming fiscal
year. The bank already has 11 branches. After the allotment of this issue, NCC Bank will have Rs. 700 million as the paid up capital making it the largest Nepali bank in terms of capital base. WTO Membership Ratified His Majesty’s
Government has ratified the agreement to become member of WTO after
amending the Nepal Treaty Act just in time through an ordinance. The ratification documents have already
reached WTO Secretariat which has notified that Nepal will formally
become WTO member on April 23. With this Nepal becomes the first least
developed country that attains the WTO membership through the process
called “Accession” beating Cambodia in the race to submit the
documents for ratification. Cambodia is granted moratorium of six
additional months till September end 2004 as its political situation has
changed now since the Cancun ministerial of TWO held in September 2003
when application of both Nepal and Cambodia for WTO membership were
approved. But as Nepal’s political system has not changed during the
period, the failure to ratify within March end was going to nullify the
Cancun ministerial’s approval. That would have required the membership
negotiation to be started all over again. The clause added in the Treaty Act
through the Ordinance provides that ratification of a multilateral
treaty can be done through royal assent. With the ratification of WTO accession, now Nepal has the challenge to amend or formulate some 40 laws to make the country's system compatible with WTO regime. India’s Consulate in Birganj Though the
Indian Consul General’s Office in Birgunj which started its operation
from February 1, is still to be formally inaugurated, the business
community in the locality is already upbeat. And they have valid reasons for their
enthusiasm. The Consulate will issue vehicle permits, render trade
related services as well as visa and other consular services. And the
industrialists believe that the business activities will get much
simpler when these services hitherto rendered by Kathmandu based Indian
Embassy are made available at Birgunj itself. As C Gururaj Rao, the Consul General,
told New Business Age in his office at local City Club, when it comes to
facilitating the general public, his office will not only look upon the
business affairs but also on other sectors like scholarship for the
students from the Terai region. General Secretary of Birgunj Chamber of
Commerce and Industry (BjCCI) Sushil Ghurka says that especially the
export oriented industrial units are going to be benefited as the
problems these industries confront for their exports can now be solved
at Birgunj itself. Likewise the Central Vice President of
Nepal India Cooperation Forum Babulal Agrawal, who had been raising his
voice for the establishment of Consulate General of India in Birgunj
from the time he became the President of BCCI six years ago, says the
importance of this office will be realized further when the Birgunj ICD
is operational. Economist
based in Birgunj, Ramesh Bhattarai, says that as the opening of
Consulate General of India in Birgunj is going to be followed by setting
up of an information desk here by Bangladesh and Nepal’s Ministry of
Foreign Affairs is going to open counterpart office for the Consulate,
the city can expect a total facelift. “Such developments in Birgunj
will surely open new avenues for economic growth in Birgunj. But it
depends upon the Nepali business community’s capability to benefit
from the opportunity,” Bhattarai adds. He hopes, “Once the ICD
concept is materialized it will encourage other concepts like Export
Promotion Zone, Export Processing Zone etc.” The
govern-ment is planning to operation-alize the Birgunj ICD by April-May
this year. A railway service is soon to be started after proper
arrangement of banking and lodging facilities is made there. The process
for the appointment of the management firm for ICD has already begun.
Consul General Rao hopes that this ICD, established with the hope to
strengthen Nepal’s foreign trade, will soon be fully operational and
he adds that the Indian government is on the process to establish a new
custom office in between Birgunj and Raxaul. Consul General Rao, is assisted by three high officials to look after economic and commercial matters, consular matters and education and press information matter. San Miguel with Gorkha Brewery Gorkha Brewery
(P) Ltd. (GBPL), the Nepali brewer of Carlsberg and Tuborg beers, has
won the right to brew also San Miguel, thus controlling almost 90% of
the beer market in Nepal. The agreement for this purpose was
recently reached between the Carlsberg Asia (P) Ltd. and San Miguel
Corporation, say the sources. According to them, it will take some time
to complete the necessary formalities under the Nepali laws before
Gorkha Brewery starts brewing San Miguel. San Miguel is being brewed in Nepal by
Mount Everest Brewery (P) Ltd. (MEBPL) for over a decade under licence
from San Miguel Corporation. Though the latest development of
transferring the brand to its rival GBPL comes as a surprise to the
market, MBEPL was prepared for it for long, as it is learnt that its
licence to produce San Miguel was already expired for some nine moths. However, the cooperation between San
Miguel and Carlsberg is not unique to Nepal. San Miguel is marketing
Carlsberg in Australia and Indonesia, it is learnt. While Carlsberg and Tuborg together account for some 60% of the Nepali beer market, San Miguel stands at the distant second with less than 30%. Birganj Chamber Proposes Code of Conduct Birgunj Chamber
of Commerce and Industry (BjCCI) has come up with a proposed Code of
Conduct for the business community. Chief Commissioner of the
country’s anti-corruption body Commission for the Investigation of
Abuse of Authority (CIAA), Surya Nath Upadhyaya, during his visit
to his hometown Birgunj last year, had suggested the business community
to come up with such a Code for creating a good image of the business
community in the minds of the ordinary people. Satya Narayan Agrawal,
who completed his tenure as the president of BjCCI recently had urged
the new executive committee of the chamber for the same. Incumbent president of BjCCI, OM Prakash
Rungata, says that the chamber is hoping adoption of the Code from the
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) as a
national level Code for the community.
However, some experts think the proposed Code of Conduct is more for cheap popularity. For example, Birgunj based economist Ramesh Bhattarai, who does not see any need of the Code, suggests that the Chamber would do better by focusing more on business promotion than on self-promotion. Nubiz reporters with inputs from Chandra Kishore Jha from Birganj |
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