Beed insights issue 5 ts 2612

BEED INSIGHTS Issue 05

December 2016

The year 2016 has been a challenging year for Nepal. For beed, it

IN THIS ISSUE

has been one of the busiest years so far. We ventured into Cambodia after winning a global bid with UNCDF. Trips to Rwanda continued while engagement in Bhutan remains, and



Why you should be a Chartered Accountant in A Management Consulting Firm!

Shikshya Gyawali



A Beginners Guide for Investors in the Nepali Capital Market Rojesh Bhakta Shrestha



Digital Detox: Exploring mindfulness and awareness Sujeev Shakya



Development Research in Nepal: How Do We Get It Right?

Tejaswee Shrestha



Cambodia, Nepal, Rwanda – Lost opportunities amidst shared commonalities Sudip Bhaju

Nepal continues to be the focus of operations. beed continues to believe in the potential of Nepal and also hopes that some of the ideas that germinated in 2016 will see

movement in 2017 as some clarity on larger political issues as well as economic stability will be witnessed.

Lastly, we would like to wish all our readers a wonderful holiday season and a very Happy New Year!

commercial

or

economic

for

businesses, these problems are potential issues that can place businesses at cross roads with the law. Be it the requirement of businesses

to

accounting

have

system

a

sound

that

can

accurately record their financial transactions;

maintaining

the

sanity of their books of account, or the need to devise a tax efficient business structure and defend their tax positions before statutory authorities; CA’s are the best minds that management consulting approaching

WHY YOU SHOULD BE A CHARTERED ACCOUNTANT IN A MANAGEMENT CONSULTING FIRM!

better

growth

avenues. Management consulting

firms can offer when it comes to analysis of business processes.

firms have proven to act as a significant stimulus for businesses,

Furthermore, matters on taxation

but

and

its

success

is

directly

compliance

requires

a

proportional to the quality of its

systematic approach coupled with

team; which usually comprises of

patient official communication with

individuals specializing in business

government counterparts. CA’s, by

management, technical experts

virtue

and Chartered Accountants (CAs).

nurturing and strenuous articleship

Herein, I have discussed some of

training, are equipped to execute

the skill sets that CA’s bring into

such

management consulting firm.

smoothest manner possible; which

of

their

professional

complications

in

the

is not very convenient for non-CA

SHIKSHYA GYAWALI

members

of

a

management

In today’s world, businesses need

CA: BEST FIT FOR STATUTORY AND COMPLIANCE WORK

innovative ideas to survive. The

Chartered

are

Apart from this, business analysis

complex nature and speed of

statutorily denoted experts in the

demand more numeric data. Be it

business operations, and market

field of accounting, auditing and

analysis of performance ratios,

expansion

taxation.

of

identifying valuation keys or impact

competition among businesses. In

practice and knowledge lies in

of numbers in financial statements;

this scenario, partnering with a

these fields; which are often the

numbers are what matters the

good management consultant can

key areas where businesses seek

most for entrepreneurs. Even in

prove to be quite beneficial for

help from consultants. While all

this facet, management consulting

strengthening

other

firms prefer CA’s who can interpret

has

ensured

structures

fierce

and

consulting firm.

CA’S ARE NUMERATE

Accountants

Their

problems

core

are

area

either

these numbers for businessmen. So

communicators,

While CA’s have their

when you want a valuation report or do not understand what your

report

writers or fine presenters.

own set of skills that

profit and loss statement says, or

better

they excel in, there are a

In addition to their unabashed

where the profits go in a particular

few areas where they

technical knowledge, CA’s need to

situation, you know the best man in

need improvement, and

work an extra bit to be at par with

for that matter, you want to know

the team your client can speak to is

business school graduates that

a management

a CA.

PRESENTATION AND REPORT WRITING: NOT A CA’S FORTE

demonstrate

well

versed

consulting position is

presentation and writing skills to

exactly where they can

create a niche for themselves in a

hone these skills.

consultancy firm. This would not only extend the scope of available

While CA’s have their own set of

opportunities on offer for CA’s; but

skills that they excel in, there are a need

it comes to presenting their work or

also take management consulting

improvement, and a management

doing elaborative report writing,

services in Nepal to another level.

consulting position is exactly where

CA’s often fall weak. In addition,

they can hone these skills. For

efficient and smart marketing is an

instance, CA’s lack the skill of

essential quality for a management

presenting insights in the best

consultant; which again is not a

manner which is a pre-requisite for

CA’s forte. While such skills depend

being a successful management

a

consultant. While they have the

business schools have proved that

best access to every nitty gritty of

they can be nurtured as well.

the technical aspects, CA curricula

Management

does not incorporate marketing and

thereby be the playground in which

presentation training; except for a

CA’s explore and work on these

few boring sessions. Thereby, when

skills; emerging to be effective

few

areas

where

they

lot

on

personal

capacities,

consulting

can

SHIKSHYA GYAWALI

A BEGINNERS GUIDE FOR INVESTORS IN THE NEPALI CAPITAL MARKET ROJESH SHRESTHA

My

professor

for

with the best of mentors and

the number of merchant bankers

colleagues to get good hands on

and

experience.

The

stock

companies & an overwhelming

market,

realized

highly

participation of investors in the

irrational, and fundamentals and

primary market. Today the daily

analysis are of minimal help. The

average market turnover stands at

size of our secondary market was

NPR

very small back when I started off;

increasing volume has made the

wherein a handful of investors

market more efficient and liquid,

could

the

decreasing chances of share price

market; which had an average

manipulation, while the capital

daily turnover of only NPR 20-30

market

million.

opportunity

I

easily

Nepali is

manipulate

Securities

entry

of

600-700

diversify

today for

hydropower

million.

This

offers

great

investors

their

to

investment

Analysis and Portfolio Management

While

certificate

requirements. If you have not

class in the US, once asked me in a

management was a laborious and

ventured into Nepali capital market

humorous way, “Will you be

tedious

portfolio

yet and want to participate and

managing penny stocks in your

management services in the past,

reap the benefits provided by the

home country someday?” A few

the

market,

years after this, I joined Nepal’s

digitization

first

operations

operational

Management

Portfolio

Company,

physical part

recent

of

streamlining of

share

into

and

market

full-fledged

beed

dematerialized trading, brings with

managing

it efficiency that provides a key

below

are

the

key

information which should help you to begin.

Portfolio

1. GET STARTED: OPEN A DEMAT ACCOUNT

(PMS).

Opening a dematerialized (DEMAT)

something which I wanted to

However, our stock market has

account at one of the Depositary

pursue in future.

evolved over the years with the

Participant (DP) licensed by the

opening of more stock brokering

Central Depository System and

After a few days of joining, I

offices, entry of mutual funds and

Clearing

realized that I had a great team

credit rating agencies, increase in

prerequisite to participate in both

invest.

I

was

not

portfolios on the first day itself, but

advantage

for

I was pretty excited to begin

Management

Services

Limited

(CDSC)

is

a

primary and secondary market.

the sole secondary market; and its

platforms. Once you know the

Most commercial banks, merchant

mobile based application is a great

primary issues are out, you can

bankers and stock brokers provide

source to get hands on information.

read their prospectus to see their

such services. If you already own

There are many other popular

detail information such as; past

some stocks in your name then you

websites that provide constant

and projected performance, &

can give your DP to dematerialize

updates about the capital market

management amongst others. You

your physical share certificates into

such as; Share Sansar and Mero

can also look at their credit rating

dematerialized shares. The DEMAT

Lagani. Furthermore daily national

provided by a licensed credit rating

account is similar to a bank account

newspapers, websites of merchant

agency before making the decision

which debits and credits the shares

bankers and credit rating agency -

to invest.

you sell or purchase. Most DP’s also

icranepal.com - also provide good

provide clients with facilities to

information.

check their DEMAT account status

3. PARTICIPATE IN THE PRIMARY MARKET- APPLY IN PRIMARY OFFERINGS

online as well.

The risk is lower when

4. PARTICIPATE IN THE SECONDARY MARKET– OPEN A TRADING ACCOUNT AT A STOCK BROKER OFFICE All the stocks offered via primary

One of the best opportunities to

market are listed in the secondary

participate in the capital market is

market i.e. Nepal Stock Exchange

primary market as you

to apply for primary offers in the

(NEPSE); currently there are 231

get an opportunity to

primary market such as; Initial

companies listed in the stock

buy shares at a lower

Public Offering (IPO) or Further

exchange. The secondary market

Public

Most

provides the platform to sell the

companies offer primary issues to

shares you hold or purchase new

purchasing those shares

the general public at face value of

shares from the market. The share

in the secondary market

NPR 100 per stock, or at a premium

price of these listed companies

once they are listed.

based on their valuations. The risk

and the value of NEPSE Index

is lower when you purchase in the

changes every day based on total

primary market as you get an

demand and supply of shares in

2. KNOW THE MARKET

opportunity to buy shares at a

the market.

To get started in the stock market,

lower

it is essential to first understand

purchasing those shares in the

If you wish to get involved in the

how

secondary market once they are

secondary market, you will need to

listed.

for

open a transaction account at a

sole

opportunities to participate in the

stock broker’s office. There are

regulator of capital market is a

primary offering of mutual fund

currently 50 stock brokers licensed

useful

schemes which can be a beginning

by NEPSE while there are a few

point.

stock

you purchase in the

cost as compared to

the

Securities

market Board

functions. of

(www.sebon.gov.np);

source

for

Nepal

the

primary

information. Its website provides

Offering

cost

(FPO).

as

Also

compared

look

out

to

broker

offices

outside

Kathmandu. Once you open an

information on various securities issues

account with a stock broker, they

upcoming public issues amongst

generally comes out in national

will provide you with a unique ID

others. Similarly, the Nepal Stock

newspapers

Exchange

announced

laws,

investor

education,

and

(www.nepalstock.com)

News

about

primary and

on

are

widely

code via which all the transactions

other

media

in your name will be executed.

capital gain tax of 5% if applicable and performance fees while these

while making sales.

services

Once you open an account with a stock broker, they will provide you with a unique ID code via which all the

5. STILL CONFUSED- SEEK A PROFESSIONAL HELP If you are still confused and less confident

about

entering

the

market or you do not have time,

transactions in your

energy and resources, do not

name will be executed.

worry as there are number of professional

licensed

Portfolio

Management Companies such as beed invest providing you with a full To make a purchase or sale order

range of products and services

you will simply have to call your

under

stock brokers or visit their office to

Services (PMS).

Based on your

place order, make sure you have

investment

goals

the shares in your DMAT account

expectations,

before you place a sale order to

managers

your stock broker. The stock broker

matching your risk appetite and

charges some commission as a

invests in the capital markets on

brokerage fee for each transaction

your

while you have also have to pay a

managers charges minimal annual

Portfolio

Management

portfolio

develops

portfolios

The

portfolio managers develops portfolios matching your risk appetite and invests in the capital markets on your behalf.

with

the

the capital markets. Moreover, you can also handover you existing portfolio

to

these

portfolio

managers for restructuring and further management.

All in all, as the stock market is constantly evolving and getting technical, retail investors are highly advised to seek professional advice and avoid making investments on herd mentality - invest wisely!

portfolio

Based on your investment goals and expectations, these

you

opportunity to grasp the benefits of

and

these

behalf.

offer

ROJESH SHRESTHA

DIGITAL DETOX: EXPLORING MINDFULNESS AND AWARENESS SUJEEV SHAKYA Gadgets have taken over our lives.

E-habits

have

There

detox, I was also keen

nothing to read or write as the

to be a part of this

were

no

gadgets

and

point of the retreat was to ensure that the mind does not wander. All

retreat as I have been

in all we were to do nothing; an

exploring the theme of

extremely difficult task for a mind

Buddha as a Coach, in

that is used to doing so much is

search of mindfulness,

suddenly asked to do nothing.

Even the eyes were not allowed to

awareness and

wander and we were to keep

presence.

visual contact within three feet.

Meanwhile eyes needed to be half

so

4am at the sound of a ringing bell,

closed; very much like the images

entrenched into our day to day

followed by thirty minutes of

of Buddha, and we were to keep

lives, that people are known to face

getting ready and into our robes.

silent, and not even talk to each

withdrawal and distress on being

Accommodation and bathrooms

other. From day three onwards,

cut off from gadgets and internet.

were

cleaned

we were allowed to speak while

Personally I was keen to figure out a

communally among the attendees.

sharing our experiences with the

way to get Digitally Detoxed and

At 4:30am, we had to show up for

teacher.

spend

gadgets.

a walking meditation, and then

then

from 5am the schedule alternated

FAMILY IS WHAT YOU ARE FOR

committed to a ten day meditation

between walking meditation and

Whenever I have traveled in the

retreat with this intent.

sitting mediation every hour till we

past,

retired at 10pm. Two meals were

platforms have ensured that I have

served in a day, one at 6am and

been able to keep in touch with

The retreat I opted for was a rare

the other at 11am; as under one of

my family on a perennial basis, be

one that combined meditation

the disciplines one should refrain

it through phones or messages on

along with being ordained as a

from eating after noon.

time

Challenging

become

Apart from the digital

without myself,

I

THE DEMANDING SCHEDULE

monk. It was organized on the occasion of the 78th birthday; or 1000 moons of the venerable Jnanapurnika Mahasthavira. Apart from the digital detox, I was also keen to be a part of this retreat as I have been exploring the theme of

Buddha as a Coach, in search of mindfulness,

awareness

and

presence.

The schedule of the retreat was demanding; with days beginning at

shared

and

digital

communication

social media platforms. During the retreat, I did not miss work, gadgets or talking, but I did miss my family a lot despite being just over a kilometer away from home.

Many questions rolled over my head as I emerged out of the retreat. I longed to see my family and be with them. On the penultimate day, when the vow of silence was broken and I could just see them, I realized that I had

our awareness, whether it is the

Change as people will be doing

never felt happier in life. It is these

noise we make while eating, the

less harm to nature and

little things that drive us and

noise our slippers make while

learning to be content.

perhaps not the big ones I thought

walking or the way we react to

that are important in life. This

other people snoring. That is

With unprecedented advancement

moment made me realize my

simply the meditative practice we

in technology the interconnected

priorities and the importance of

need to build; simple sounding,

world

other little things that we often

but so tough to execute.

constantly through some medium

forces

us

to

engage

or the other; more than we ever

take for granted.

MORAL COMPASS

have in the past. Just being aware

BUILDING AWARENESS

At the graduation Chyoki Nyima

of our deeds, our wants, our greed

In books on the subject mediation

Rinpoche; meditation master and

and being able to distinguish what

is described as an experience

renowned Buddhist teacher, spoke

is necessary and what is not makes

where you walk while you walk,

on

a world of difference in our

eat while you eat and sleep while

precepts; i.e. to abstain from

you sleep. On that note, this

harming living beings, take what is

retreat helped emphasize how we

not given, sexual misconduct, lying

are often completely unaware of

or gossip and intoxication, laid

what we do, and how we do it.

down by Buddha can make the

One of the key takeaways for me

world a different place. If those

was to be aware of every moment

five percepts are followed:

how

following

five

basic

individual lives.

that we are living- from the time you open your eyes in the morning



to the time you shut your eyes at night.

We

do

hundreds

of

There will be no war; there will be peace.



There will be no greed; there

mundane tasks every day, and we

will

just need to be aware of what we

satisfaction.

do. And ultimately everything that we do, hear or see helps to build



be

gratitude

and

There will be no need to discuss the impact of Climate

SUJEEV SHAKYA

DEVELOPMENT RESEARCH IN NEPAL: HOW DO WE GET IT RIGHT?

mind. What happens as a result is

elaborating

that the planning and design of the

Recommendations

should

research process is such that the

SMART:

Measurable,

study outcomes do not align with

Attainable,

the objectives.

based for it to be efficient and

It is therefore essential to spend some crucial time setting specific

on

Specific,

them. be

Realistic and Time

impactful.

objectives and goals, as without

DO YOUR HOMEWORK

clarity in these areas in the initial

In my time working in this arena, I

stages, researchers who go to the

have

field to obtain data often fall into

objectives and research design of

Development research in Nepal has

the traps of becoming greedy and

various

gained tremendous popularity in

trying to know everything; thereby

projects tend to be relatively

the last decade; especially given the

not focusing on what is actually

similar

sudden increase of not-for-profit

needed for the research to fulfil its

organizations

organizations working for various

objective. Consequently, it gets

haphazardly

social

TEJASWEE SHRESTHA

causes

empowerment generation

for

to

each

research

other.

Also,

sometimes start

a

research

project just to meet the financial

or

income

solutions to a problem that they

deadlines

themselves

agencies. It is therefore essential

the

poor.

By

and

betterment. While some of them have been successful in achieving its objectives, others have largely failed to make the intended impact.

In this article, I have tried to explore some reasons as to why some of the development research in Nepal have failed to make the impact that it ought to.

do

not

know

or

TRIED AND SMART! While

TRUE:

THINK

through

recommendations

provided

the by

donor

the

existence,

usability

of

viability

research

and

projects

each penny of the donor money is spent wisely.

projects carried out in Nepal, I

If done correctly, development

realized

researches

that

they

are

not

should

produce

actionable enough. And sometimes,

findings that alter the economic

even when they are actionable

and social welfare of the society

enough, no solid measures are

along

taken by concerned authorities,

institutional changes.

pointless. Also, researchers often

development research in Nepal is

fall in the trap of providing multiple

the lack of a clear objective or

recommendations without weighting its

vision

pros

&

cons

and

with

fostering

practicality.

Development researchers sometimes

Therefore, while recommending

set

before

policies and action plans, it is best

conducting the research, and do

to think and work smart by

not have a definite objective in

identifying the three most relevant

goals

the

some of the development research

The most common problem with

work.

by

before initiating the project so that

flipping

thus, making the whole study

beginning

set

to do proper homework to check

understand.

AIM FOR THE GOAL

broad

development

the

very difficult for researchers to find

development

very

that

women

research that is undertaken for

before

realized

like

development research here, I mean social

also

and practical recommendations and

TEJASWEE SHRESTHA

the

CAMBODIA, NEPAL, RWANDA –

bombings

&

Khmer

rouge

economic factors like exports, per

brutality; which tried to enforce a

capita GDP and unemployment

utopian ideology of communism in

rates.

these countries. These events led to

huge

economic

losses,

thousands of death, and often

AGRICULTURAL ECONOMIES DEPENDENT ON FOREIGN AID

starvation which instilled a sense

All three countries are largely

of fear in all three countries. What

agriculture

is interesting, however, is the

slowly moving on to become

development that Rwanda and

service

Cambodia have experienced post

currently dependent on foreign

the end of such regimes vis-Ă -vis

aid; with almost 30-40% of national

Nepal.

budgets backed by aid. Rwanda and Cambodia have used political

work on an annual basis, and we

RWANDA AND CAMBODIA: PRESENT

recently ventured into Cambodia

After two decades of civil war,

as well. Having visited and worked

Rwanda has progressed enough to

in both these countries, I started

achieve an annual growth rate

noticing various commonalities of

averaging at 7%. It is now one of

these countries with Nepal. While

the fastest growing economies in

Nepal went through the Maoist

the

insurgency; which revolutionized

Similarly, Cambodia, which was

political

masses,

one of the poorest economies,

Rwanda suffered through mass

underwent a complete turnaround

genocide

and now ranks significantly better

LOST OPPORTUNITIES AMIDST SHARED COMMONALITIES SUDIP BHAJU I have been visiting Rwanda for

ideology and

of

killings,

and

Cambodia underwent American

RWANDA

than

East

Nepal

CAMBODIA

African

in

continent.

several

key

based oriented

economies; economies

goodwill to invest and support resources in sectors with the highest

potential

hydropower,

(agriculture,

tourism

and

manufacturing); thereby attracting huge foreign investments in these sectors. On an average, Rwanda doubles its power generation every 4-5 years, meanwhile Cambodia is self-sufficient and self-reliant on this front. Nepal on the other hand while glorifying its mountains and

river resources and hydropower

NEPAL

potential, has traded multiple

landlocked

licenses over the years with little

culturally and intricately beautiful

STRONG DIASPORA COMMUNITIES

addition to the national grid every

city of Angkor in Cambodia draw

While remittance from Nepal’s

year.

several thousands of tourists every

diaspora community is considered

year. However, the difference lies

to be a strong pillar of the

While Nepal does not shy away

in the fact that Rwanda has

economy, its contribution has been

from support and collaboration to

focused on product innovation and

dwindling (affected by the global

achieve the desired results, sadly it

enhanced the quality of services to

crude oil business and labor laws)

hesitates to capitalize on these

attract

meanwhile

and its utilization in productive

resources

Cambodia with the help of the

sectors remains a dialogue and

development process when the

development

topic of discussion. In comparison,

time is ripe. Nepal could have seen

preserved its rich heritage.

and

fast-track

the

Rwanda

tourists,

and

community

the

has

the returnee diaspora in Rwanda and

better results much earlier had it

Cambodia

are

realized the value of foreign aid

Nepal has an edge over these two

productive

and investments. However focus

countries as English is widely

experience and resources they

remains

spoken and understood in the

come back with.

on

inter/intra

party

and

extremely

utilize

the

politics and righteousness thereby

country.

leaving the wheels of the economy

extremely difficult to get around

In

dependent on remittance.

without the help of an interpreter

commonalities, it is proof that

and local guide in Rwanda and

economies marred with civil war

PRIVATE SECTOR OPERATIONS

Cambodia. Despite this, language

and unrest can come around and

is not much of a concern in these

grow into stronger economies, but

It is also interesting to see

countries as they have focused

it takes a leader with a vision for

commonalities in the functioning

beyond language for the tourism

the country to experience this. The

of the economy of these three

sector to thrive in the years to

eagerness

countries. For instance businesses

come.

convert a vision into an actionable

Meanwhile,

it

is having

and

stated

and

have a similar style of operation

plan

with one business community

execution

can and

all

the

willpower

sincerely bring

to

pursuing about

dominating market operations in a

While Nepal does not

economic

certain sector. Similar to the

shy away from support

turnarounds as proven by the

Marwaris in Nepal, Rwanda has

and collaboration to

Kenyans and Cambodia has the Vietnamese. Business transactions

achieve the desired

and trade is largely governed by

results, sadly it hesitates

these groups with little room for

to capitalize on these

local infiltration.

resources and fast-track

TOURISM A MAINSTAY

the development

Like the majestic Himalayas anchor

process when the time

Nepal’s

is ripe.

tourism;

Rwanda

and

continued

end

Gorilla

tourism

in

economic

growth

achieved in Rwanda and Cambodia.

Cambodia have their anchors too high

development

SUDIP BHAJU

beed management private limited

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beed management is an international management consulting and financial advisory services firm working in Nepal, Bhutan and Rwanda.

Since its establishment in September 2008, we have served over hundred clients in over 20 industries.

Nepal Economic Forum (NEF) is not for profit organization initiated by beed aiming to be Nepal’s premier private sector led economic policy and research institution.

beed leadership center (BLC) works on the positive transformation of individuals, and explores the domain of leadership development through selfdiscovery.

NEF strives to re-define the economic development discourse in Nepal, and works towards strengthening the Nepali economy.

BLC conducts leadership programs for different individuals & organizations.

beedinsights is an in-house production Š beed management private limited, all rights reserved.

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