R&D Economic Research & Business Development
Date: October 4, 2009
Highlights
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Prime Minister Madhav Kumar Nepal has made up his mind to promote Foreign Minister Sujata Koirala to the rank of deputy prime minister in the cabinet, according to a top aide to Nepal.
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After the three major political parties of Nepal, United Marxist Leninists, Nepali Congress and Unified Maoists Party agreed to allow the top leadership to find consensus.
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Nepal’s First President Dr. Ram Baran Yadav who was at a temple in Bhaktapur was greeted with stones and shown black flags by the Unified Maoists’ Party cadres.
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Home Minister Bhim Rawal said on Saturday that Tibetan refugees taking shelter in Nepal have no right to stage protest activities against "third country".
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The Vice Chairman of the Unified Maoists’ Party, Dr. Babu Ram Bhattarai has said that ‘the ongoing talks between the three major parties to end the political dispute were not at all expected to unlock the current deadlock’.
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UCPN-Maoist spokesperson Dinanath Sharma today said that the task force cannot resolve the impending political crisis as it has no mandate to decide on the contending issues.
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The under-construction BP Highway (Dhulikhel-Sindhuli-Bardibas Road), which is projected to link the capital to the eastern Tarai, has already started to crumble.
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South Asian Federalist (SAF) launched a campaign for the establishment of United Nations Parliamentary Assembly (UNPA), in Kathmandu, today.
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The High Level Empowered Garbage Management Commission is all set to call Expression of Interest (EoI) from the private firms to set up garbagefuelled plant in the valley within a week.
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The government has started mulling over different options to make the net worth -- difference between total assets and liabilities -- of state and semi-state owned banks, Rastriya Banijya Bank (RBB) and Nepal bank Limited (NBL) positive.
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Bank lendings to tourism sector declined by 57.1 percent during the fiscal year 2008/09 compared to the previous year. According to Nepal Rastra Bank (NRB) annual report on country's micro-economic situation.
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The country's second largest iron mine in Parvat that was shut for the last 60 years is going to come into operation again.
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The number of tourists visiting the country via air in the first nine months of 2009 has decreased by two percent as compared to the same period last year.
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The shortage of raw leathers caused by illegal smuggling has forced several the leather processing industries to close down. Key among them is: Parsabased National Leather factory, Hetauda Leather Factory, Biratnagar-based United, Asian, Universal and Nepal factories. The rest are in a bad shape.
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Most of the insurance companies failing to increase their paid-up capital as directed by the revised Insurance Act, 1992, are in process of fulfilling their obligation.
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Four different cement factories are set to begin production in Dang within the next two months. The companies readying to begin production say their combined production will be over 2,100 tons per day.
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The Securities Board of Nepal (SEBON) -- the capital market regulator -- has started study to gauge the viability of new stock exchange in the country.
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The process of discharging disqualified Maoist combatants is resuming on October 11, two and half months after it was stalled following noncooperation by the combatants at Shaktikhor cantonment in Chitwan.
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Users of stolen motorbikes are on the rise in Kanchanpur district. Smugglers, taking advantage of open border, bring in bikes stolen in India to Nepal.
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Dr Baburam Bhattarai, vice-chairperson, UCPN Maoist, today warned that the mass agitation would gather momentum after Tihar. “The movement will sweep away both the Nepali Congress and CPN-UML from their citadel of power,” he said.
POLITICS: Sujata to be DPM Prime Minister Madhav Kumar Nepal has made up his mind to promote Foreign Minister Sujata Koirala to the rank of deputy prime minister in the cabinet, according to a top aide to Nepal. "Since NC President Girija Prasad Koirala has consistently taken up the promotion issue with the prime minister he is no longer in the mood or in a position to resist Koirala´s request," he said.
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Asked when she might be promoted, he said it could happen some time next week after the prime minister consults senior NC leaders. NC President Koirala on Thursday urged Prime Minister Nepal, for the third time, to promote his daughter. The PM responded, saying he would take a decision after Koirala’s daughter returns home. Sujata Koirala returned Saturday from the United States, where she had gone to accompany the prime minister to the United Nation´s General Assembly. Prime Minister Nepal has been feeling the heat over the issue since the Nepali Congress Central Working Committee (CWC) and senior leaders of the party have vehemently opposed Sujata’s promotion. The NC CWC meeting condemned Sujata last month after she boycotted Prime Minister Nepal´s India visit to express her displeasure over not being promoted. The NC meeting also issued a statement saying that the party hadn´t demanded a deputy prime ministership. Leader of the NC Parliamentary Party Ram Chandra Poudel had met Prime Minister Nepal and urged him not to promote Sujata to DPM without an institutional decision by the NC party. "The prime minister feels unnecessarily trapped in the ongoing power struggle within the NC and he will inform the senior NC leaders, including Poudel, about his decision," said the aide. NC CWC members are still dead against Sujata´s promotion. "Since the CWC hasn´t changed its last decision over the issue, the prime minister should not promote her upon an individual request," said one angry CWC member, requesting to remain unnamed. Source: www.myrepublica.com Date: 2009-10-04 Nepal political deadlock continues, top hats told to intervene After the three major political parties of Nepal, United Marxist Leninists, Nepali Congress and Unified Maoists Party failed to find an outlet from the current political deadlock during the meeting held Saturday October 3, 2009, the political parties agreed to allow the top leadership to find consensus. Reports say that the Unified Maoists Party’s unwavering stance to formally mention President Dr. Ram Baran Yadav’s “unconstitutional” move to reinstate the Maoists’ Government sacked erstwhile CoAS Katawal as the only reason for the current deadlock in the common resolution proposal which is yet to take a formal shape, the meeting held on Saturday had ended inconclusive. Both the UML and the Nepali Congress, the parties leading the government had rejected the Maoists’ proposal out rightly. The talk team, representing all three major parties finally failing to forge consensus agreed that the right to unlock the deadlock would now be provided to the party top hats.
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On Saturday, October 3, 2009, the UML and the Nepali Congress had presented the two party common draft of the Resolution proposal. The NC-UML proposal mentions that there should be the provision that the President should be the constitutional head of the state and the Prime Minister as executive head of the government. And, the NC-UML common draft also outlines the right for the deployment of the Nepal Army to the cabinet. The draft also agrees that the rights of the Prime Minister and the President should be clearly stipulated to avoid any confusion in the future. The UML central Committee member Mr. Yub Raj Gyawali directly blamed the unfiled Maoists’ Party for unnecessarily creating the deadlock. “The Maoists demand for mentioning President Dr. Ram Baran Yadav’s move to reinstate the Maoists’ Government sacked erstwhile CoAS Katawal as the sole reason for the ongoing political deadlock”, Mr. Gyawali said. Similarly, Arjun Nar Singh K.C. the Nepali Congress leader said that the President was not at all responsible for the current deadlock thus it was not necessary to yield to the Maoists’ irrelevant demands. “We are not in a position to forcefully blame the President in the CoAS saga that took place on May 3, 2009”, said K.C. Source: www.telegraphnepal.com Date: 2009-10-04 Maoists doubt talks’ success UCPN-Maoist spokesperson Dinanath Sharma today said that the task force cannot resolve the impending political crisis as it has no mandate to decide on the contending issues. “The task force is useless as its members have been repeating the same stances of their respective parties,” Sharma said. “Unless they show flexibility in their stances agreement is highly unlikely,” he said. However, the problem can be solved only through dialogues between the top brass, he reiterated. Meanwhile, Sharma informed that the party’s standing committee meeting scheduled today had been postponed till tomorrow morning. The Maoists have been clamouring for action against the President since their coalition collapsed in early June. Source: The Himalayan Times Date: 2009-10-03
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Nepal Maoist cadres pelt stones at Prez Yadav’s convoy, chase continues Nepal’s First President Dr. Ram Baran Yadav who was on his way back to Kathmandu after performing Puja on the occasion of Kojagrat Purnima, October 4, 2009, at a temple in Bhaktapur was greeted with stones and shown black flags by the Unified Maoists’ Party cadres. The Maoists’ party cadres threw empty drinking water bottles, pelted stones and hurled black flags to the President’s convoy, reports say. Amid presence of heavily deployed armed security personnel, Dr. Yadav had arrived at the temple at around 3:20 PM on Saturday, October 3, 2009, and performed Puja for some ten minutes. The Local administration had heavily deployed General Police Force, Armed Police Force and Nepal Army personnel along the way to Bhaktapur and around the temple. Local Traffic and pedestrian movement was also halted which reminded the local population of the old days. Nepal’s slain monarch Birendra Bir Bikram Shah Dev, to recall, had begun the tradition of performing Puja at the Nav Durga Temple after the Earthquake of 1990. Nepal President, the astray stones and empty bottles and the Maoists appear to have some sort of friendship with each other which is sure to build a New Nepal time permitting, analysts fervently hope. The Maoist's chase of Nepal President thus continues. Free entertainment that it is by all means. Source: www.telegraphnepal.com Date: 2009-10-04 Political protests by Tibetans illegal: Rawal Home Minister Bhim Rawal said on Saturday that Tibetan refugees taking shelter in Nepal have no right to stage protest activities against "third country". Minister Rawal said that the government has started arresting and detaining Tibetan refugees as their protest activities against a friendly country violates legal provisions of Nepal. "Refugees have no rights to carry out any activities against any third country," said Rawal in an exclusive interview with Republica. "They are violating our laws. That is the reason why we are arresting and putting them in detention." Rawal´s remarks came in the wake of arrest of 107 Tibetan refugees involved in antiChina protest from various parts of the capital city including the area near the visa section of the Chinese embassy in Hattisar on Thursday. They were staging peaceful demonstration to protest the 60th Chinese National Day celebration.
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While remaining others were either released or handed over to UN High Commissioner for Refugees, two of the protesting refugees said to be leaders of the Tibetan protestors in Nepal have been put under a 30-day preventive detention. Minister Rawal also said that the government is doing necessary homework to gradually deploy Armed Police Force (APF) personnel in various customs points along Nepal-China border to "secure the border". He along with the chiefs of three security wings under the Home Ministry had visited mountain districts of Manang and Mustang on Thursday to survey how APF personnel can be deployed along the northern border. Sources said that Chinese government is exerting pressure on the government to deploy over 10,000 APF personnel along the border to thwart possible infiltration of Tibetan protestors from Nepal into China. "I did not visit Mustang and Manang at the insistence of any country," Rawal said. "It is our national plan to make our border secure and free from infiltration from any criminal activities." Rawal said two separate teams of APF have been asked to study the possibility and the situation how security personnel can be deployed along the border. The number of the APF personnel to be deployed and border points to be set up will be determined after receiving the findings of the study. According to him, the cabinet has recently approved recruitment of over 15,000 police personnel. These include 7,000 APF and 7,000 other Nepal Police personnel. Source: www.myrepublica.com Date: 2009-10-04 Nepal Maoist soon to throw NC-UML coalition from Govt: Dr. Bhattarai The Vice Chairman of the Unified Maoists’ Party, Dr. Babu Ram Bhattarai who was involved in a four hour long secret talks-one to one- with the Indian Foreign Secretary Mrs. Nirupama Rao when Rao visited Nepal last month, has said that ‘the ongoing talks between the three major parties to end the political dispute was not at all expected to unlock the current deadlock’. “Talks are continuing but there is no solution in sight”, said Dr. Bhattarai. Dr. Bhattarai was addressing a program held in Harkapur of Butwal, Rupandehi district on Saturday October 4, 2009. “We will forcefully throw the Nepali Congress and the UML leadership out of government after the Tihar festivals”, said Dr. Bhattarai adding that “the blizzard of renewed protest programs will certainly throw them out of power.” “If they are not kicked out of the government, they cannot be properly tamed who need to be tamed”, Bhattarai continued.
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“There is no need in getting entangled in the fruitless talks, we will declare another round of protest programs after the Festival season is over”, Dr. Bhattarai thundered. “We need to be in the government at any cost”, said Bhattarai adding, “We must bring positive end to our urban revolt.” Source: www.telegraphnepal.com Date: October 4, 2009
POLICY:
BP Highway project in limbo The under-construction BP Highway (Dhulikhel-Sindhuli-Bardibas Road), which is projected to link the capital to the eastern Tarai, has already started to crumble. The government under financial assistance of the Japanese government had started construction of the 158 km road some 13 years ago. Sadly, only 41 km stretch of the highway from Kaldhunga of Kavre has been black-topped so far. Moreover, overloaded vehicles that ply along the highway have made matters worse, said Bindu Shamsher Rana, chief of Dhulikhel-Sindhuli-Bardibash Road Project. The maximum weight a vehicle is allowed to carry is 8.8 tons. However, trucks are found to carry over 40 tons of load. The road is dotted by potholes and does not seem to have improved despite occasional repairs. Over 200 trucks ply along the highway every day carrying concrete and stones. The wretched state of the highway has also troubled local commuters. Surya Kumar Napit, who drives a local passenger-bus (Ba 1 Kha 8815), said that it takes three hours for him to traverse the 40 km segment from Dhulikhel to Mangaltar. Local buses provide regular transport service along the 59 km stretch from Dhulikhel to Nepalkot. The locals complained that their complaints for the repair of the highway have fallen on deaf ears. The Road Project recently made a tender call for blacktopping the 10 km section from Kaldhunga to Nepalthok, but the contractors are learnt to have forwarded their bids downsizing the amount up to 36 percent. Source: www.myrepublica.com Date: 2009-10-03
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SAF urges for UN assembly in Kathmandu South Asian Federalist (SAF) launched a campaign for the establishment of United Nations Parliamentary Assembly (UNPA), in Kathmandu, today. At a press meet in the capital, James Arputharaj W, President South Asian Federalist, claimed that the purpose of the UNPA was to represent citizens in global institutions. He further stated, “it would solve the problems of democracy deficit, lack of transparency, inefficiency and promote increased participation and representation of civil society in the UN.” The campaign for the establishment of the United Nations Parliamentary Assembly started from India in 2007. The campaign, that calls for democratising the UN, brings together non-governmental organisations, parliamentarians and citizens worldwide, who are committed to the goal of enhancing citizen representation through a global parliament. According to president Arputharaj, the appeal for the establishment of a parliamentary assembly at the UN is now supported by more than 600 members of parliament from various countries. He also added that the call for a UNPA was being backed by the European parliament, the pan- African parliament and the Latin African parliament. Source: The Himalayan Times Date: 2009-10-03 Oct 7 deadline for EoI for garbage-fuelled plant KATHMANDU: The High Level Empowered Garbage Management Commission is all set to call Expression of Interest (EoI) from the private firms to set up garbagefuelled plant in the valley within a week. “We’ll publish the notice for the EoI by October 7 in order to set up the garbagefuelled plant in the Kathmandu Valley,” said Dr Sumitra Amatya, member-secretary of the commission, who is also the general manager of the Solid Waste Management and Resource Mobilisation Centre. “A meeting to this regard is going to be held within two days.” The commission was formed by the government some five weeks ago to resolve the garbage-related crisis of the valley dwellers. The commission plans to appoint private sector to set up the scientific plant. Amatya said that the meeting would also discuss on the modality of the plant, lease, technical aspects, selection of the site, regulatory mechanism, economic analysis and sustainable waste management. “After we receive the EoI from the private companies, we’ll invite detailed proposal,” she added.
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The commission aims at signing an agreement with the private sector by midDecember, thus allowing to set up the plant in the valley within two years. Source: The Himalayan Times Date: 2009-10-04
BANKING: Govt gears up to recapitalize NBL, RBB The government has started mulling over different options to make the net worth -difference between total assets and liabilities -- of state and semi-state owned banks, Rastriya Banijya Bank (RBB) and Nepal bank Limited (NBL) positive. A senior official at the Ministry of Finance informed Republica that the existing negative net worth of the two largest banks of the country totaling around Rs 20 billion was a major setback preventing Nepal´s financial sector reform to move in a positive direction. “The government has reached the conclusion that the reform initiatives can´t move ahead as long as the net-worth of the two banks remain negative,” said the official, adding that government is looking into all possible options to inject additional capital to end their long-running negative net-worth,” said the official. According to latest figure released by Nepal Rastra Bank, the NBL where the state maintains a 39 percent equity percent, had a retained loss of Rs 6.38 billion by the end of last fiscal whereas the state-owned RBB had a whopping retained loss of Rs 14.6 billion during the same period. The Ministry of Finance is thinking over two separate plans of action for the two ailing banks to raise their capital base, according to the official. “For the NBL, revaluation of assets that it owns across the country can significantly reduce the existing level of negative net-worth of the bank,” he said, adding that the total valuation of assets owned by the bank might have been doubled if they are revalued at the current market price. “Since the state owns 39 percent of the total share of the bank and the remaining 61 percent by private sector, sharing the cost of reforms and recapitalization has been a major issue that the government will have sort out before implementing a major recapitalization plan," he added. However, injecting additional capital at the RBB would be less complicated compared to that of NBL given the fact the government completely owns it. For RBB, two options are on the table, said the official and added that the government might sell out 15 percent of the shares of Nepal Investment Bank, largest private bank in terms of deposit mobilization that the RBB owns.
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Similarly, the government is also planning to issue long-term bonds to the public as well as financial institutions. "We hope that the state-guaranteed-bond to recapitalize the ailing RBB would be an effective means to mobilize required fund," said the official. According to the NRB figures, despite its ailing financial condition, the RBB is the largest bank of the country in terms of deposits and lending volume. The RBB has mobilized Rs 68.97 billion in deposits whereas NBL, which ranks in second position, has mobilized Rs 44.34 billion worth of deposits by the end of last fiscal. Source: www.myrepublica.com Date: 2009-10-03 Tourism sector lending declines by 57pc Kathmandu - Bank lendings to tourism sector declined by 57.1 percent during the fiscal year 2008/09 compared to the previous year. According to Nepal Rastra Bank (NRB) annual report on country's micro-economic situation, credit flow to tourism service -- trekking, mountaineering, resorts, rafting and camping -- decreased to Rs. 14.73b from Rs. 34.34b. Jyoti Adhikari, former president of Trekking Agencies' Association of Nepal (TAAN), said the previous government's policy related to Voluntary Disclosure of Income Source and the need for disclosure of income forced tourism entrepreneurs to rethink about further investment. "That's why, entrepreneurs didn't make further investment," he added. He said the investors became reluctant to open expensive and luxurious tourism infrastructures reducing demands for loans from the commercial banks. "Small investors put money by themselves instead of borrowing from banks," he said. However, Sashin Joshi, president of Nepal Bankers' Association said that the reason behind the decline in loan borrowing was lack of new investors in the tourism sector."The situation was not comparatively good for new investment," he said. "Many existing infrastructures in the tourism sector are not being exploited well even now." Entrepreneurs also said that the political instability, strikes, protests and frequent blockade of the major highways had also dissuaded entrepreneurs from investing in the tourism sector. Adhikari said that even if the borrowing from the commercial banks decreased last fiscal year, the business was satisfactory. However, given the backdrop of the country celebrating Nepal Tourism Year 2011, commercial banks' lending to hotels has gone up by 12 percent to Rs. 48.58 b during the last fiscal year. The lending had witnessed the decline of 6.2 percent in FY 2007/08.
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According to the NRB report, lending in other service sectors such as advertisement agency, automotive, health, hospital, education and entertainment have also increased during the last fiscal year. Issuance of the loan by the health sector grew by 67.3 percent to Rs. 422.9 million. The sector had borrowed Rs. 252.8 million during the fiscal year 2007/08. The commercial banks loan for the investment in hospital and clinic increased by 22.4 percent. Likewise, the loan borrowing to invest in education, advertisement, automotive and entertainment sectors posted a growth by 21 percent, 4.1 percent, 9.1 percent and 0.7 percent, respectively. Source: www.ekantipur.com Date: October 4, 2009
BUSINESS & ECONOMY: Shut iron mine to reopen Kusma - The country's second largest iron mine in Parvat that was shut for the last 60 years is going to come into operation again. Due to increasing deforestation to manage fuel for melting the ore, the government had shut the mine located in Phalamlhani VDC in 2007 BS. The source of income of local Dalit families was snatched due to the closure of the mine from which Dhuwakote Iron, a popular brand of iron, used to be produced. The group of Devi Pokherel is set to extract iron from the mine after taking permission from the department of mine and geography. The mine is spread in 24 lm length in Phalamkhani and it is estimated to have spread in the neighboring Linkhu and Thanamaula VDCs. The mine is estimated to have contained 2 million tons of ore, according to a study carried out by the group. Extraction will begin once the report of a technical group arrives, said Arjun Pokharel, a member of the group. Tests have found that the ore extracted from the mine contains 40 to 60 percent iron. The mine is considered second largest iron mine in the country after the Phulchoki mine. The reopening of the mine became possible after electricity supply reached the place. Locals expect to find employment once the mine extraction resumes. Source: www.ekantipur.com Date: October 4, 2009
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Tourist arrivals down by 2 per cent The number of tourists visiting the country via air in the first nine months of 2009 has decreased by two percent as compared to the same period last year. A figure compiled by Nepal Tourism Board on the basis of data provided by immigration office at Tribhuwan International Airport, shows that a total of 251,523 tourists entered Nepal during the review period, down from 257,181 recorded during the same period last year. However, the number of tourists coming to the country in September increased by five percent as compared to same month last year. A total of 34,281 foreign visitors entered the country in September, up from 32,502 recorded in the same month last year. The number of tourists coming to Nepal in the first nine months of 2009 declined by four percent against the arrival figures of same period in the preceding year, contributed mainly by the decline in arrivals from India. However, the arrivals from Bangladesh and Sri Lanka rose by 25 percent and 15 percent respectively. Tourists from Pakistan also soared by 12 percent during the period. Arrivals from North America recorded an increment of 4.5 percent in the review period, with visitors from US and Canada reaching a combined 24,139. Visitors from Australia and New Zealand each increased by 3.2 percent, while arrivals from European nations recorded a surge of 2 percent. However, the decline in arrivals from SAARC nations that account for one-third of total foreign visitors to Nepal dragged down overall number of tourists. During the period, the major visitor generating markets were Europe with 29 percent, Asia with 18 percent, US with 10 percent and Australia with four percent. Visitors from China recorded a whopping 32 percent growth in September as compared to arrival figure of same period last year. Arrivals from Japan and Thailand also increased by 25.1 percent and 43.6 percent respectively. Arrivals from European market recorded a growth of 8.9 percent with the number of visitors from UK, Switzerland and Italy going up by 24 percent, 15 percent and 13.5 percent respectively during the first nine months. Source: www.myrepublica.com Date: 2009-10-03 Leather industries go skinless PARSA - The shortage of raw leathers caused by illegal smuggling has forced several the leather processing industries to close down. Key among them is: Parsa-based National Leather factory, Hetauda Leather Factory, Biratnagar-based United, Asian, Universal and Nepal factories. The rest are in a bad shape.
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There are a dozen leather processing factories operating in the country currently. Of them, eight are based in Parsa and Bara districts. The leather industries that are up and running have had to make do with just about 2050 percent of their capacity, according to entrepreneurs. They said most of the leather processing industries would shut down if the smuggling was not stopped. Manager of National Leather Hari Gautam said that there was an availability of just 30,000-35,000 pieces of raw skins although the factories needed over 50,000 pieces in a month. Furthermore, the recent trend of smuggling of raw leathers from Nepal has created shortage in the market forcing the factories to under-utilise the factory's capacity, according to him. Although the government has prohibited exports of raw leather in order to protect the domestic industry, smuggling of such leathers has intensified, entrepreneurs said. Police had seized 3,600 pieces of raw skins from Birgunj dry port last week which was to be smuggled to Vietnam. Gautam said mainly the Chinese traders were involved in smuggling of Nepali leathers. Manager of Narayani Leather Sajjan Chachan was also pessimistic about the situation of leather industry. He said that his own factory was not running well due to the shortage of raw materials. "We have been running at just 20 percent capacity," he said. The factory had bagged the award of excellent exporters 10 years ago for exporting the processed leathers worth Rs. 350m. The Chachan group has been involved in leather processing for the last three decades. Nepal entrepreneurs have been exporting leather goods to India, the United States, the United Kingdom, France, Italy, Germany, Thailand, Sweden and Brazil among others. The processed leathers are used for making goods such as jacket, shoe, purse and belt. Out of half-processed leathers, 70 percent is being exported to third countries and 30 percent are consumed in the internal market. The entrepreneurs said this industry was providing direct employment to 1,000 people. Source: www.ekantipur.com Date: October 4, 2009 Insurance Cos set to raise capital Most of the insurance companies failing to increase their paid-up capital as directed by the revised Insurance Act, 1992, are in process of fulfilling their obligation. As per the Act, the companies with inadequate paid-up capital should have increased their capital by the end of fiscal year 2007/08. But, the six private companies and one government owned corporation Rastriya Beema Sansthan (RBS) had failed to act as per the law. There are 25 insurance companies operational in Nepal. Alliance Insurance has received approval from the Security Board of Nepal (SEBON) to issue rights share to scale up its paid-up capital, according to Insurance Board (IB).
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Himalayan General, Premier, United, Neco, and National Insurance are other companies who are in the process of increasing their capital to the level fixed by the law. The Act has fixed minimum paid-up capital at Rs. 250 million for life and Rs. 100 million for non-life insurance companies. The RBS is yet to have its transactions audited for the last several years and it has also failed to break up the corporation into two different entities for life and non-life insurance as per the Act. Its paid up capital for non-life business stands at Rs. 124.3 million and just about a half for life insurance coverage -- Rs. 129.3 million. "Other insurance companies complain us of our inaction in case of RBS when we step up our efforts to enforce law," said Phatta Bahadur K.C, chairman of IB. Himalayan General Insurance has already increased its capital from Rs.66 million to Rs. 100.08 million through right share issuance. Similarly, the Premier Insurance also increased its capital to Rs. 102 million from existing Rs. 63 million through rights and bonus share issuance, according to IB. Likewise, Neco Insurance also increased its paid up capital to Rs. 110 million from existing Rs. 55 million. These companies however are yet to improve shareholders' certificates with the additional shareholdings, according to IB officials. United Insurance increased its capital to Rs. 120 million from Rs. 72 million through issuance of rights share. The National Life Insurance also increased its paid up capital to Rs. 250.7 million from existing Rs. 132 million through the issuance of rights shares. "These two companies are yet to complete the process of allotting the additional shares," said K.C. The Alliance Insurance aims to increase its capital to Rs. 119.9 million from existing Rs. 60 million. IB officials said that the company after getting approval from the SEBON was making preparation to raise money from its basic shareholders (promoters and those who have stake in the company above one percent). As per the recent SEBON directive, it should first receive money from its basic shareholders to own rights shares and then only can it approach the ordinary shareholders for further investment in the company. K.C. said that the IB has given it a deadline to publish its prospectus by Oct. 17 after basic shareholders take rights shares. Although the companies are in the process of increasing their paid up capital, the IB is already contemplating about bringing about a new act to further raise the paid-up capital base for all insurance companies. Source: www.ekantipur.com Date: 2009-10-03
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Dang cement firms to begin production Dang - Four different cement factories are set to begin production in Dang within the next two months. The companies readying to begin production say their combined production will be over 2,100 tons per day. Dang Cement Industries, Sonapur Cement Pvt Ltd, Ghorahi Cement Pvt Ltd and Rolpa Cement Pvt Ltd say their preparations for production have reached final stages and the production will begin within two months. Three more companies are interested to set up cement factories in the districts and they are still studying the prospects of running the factories in Dang. The firms have purchased land for the factories and intensified construction of access roads to these hills. Dang Cement Industries plans to set up its plant at Hapure of Purandhara, Sonapur Cement Pvt Ltd at Dudhras of Bijauri, Ghorahi Cement Pvt Ltd at Gogli of Ghorahi and Rolpa Cement Pvt Ltd at Caulichaur of Budhagaun in Rolpa with Dang as its center. Source: www.ekantipur.com Date: October 4, 2009
MARKET:
SEBON studying viability of new stock market The Securities Board of Nepal (SEBON) -- the capital market regulator -- has started study to gauge the viability of new stock exchange in the country. "We have already initiated internal study on economic viability of new stock exchanges here. We are also studying the Malaysian experience of operating multiple stock exchanges and new technology applied there,� Neeraj Giri, director of SEBON, told myrepublica.com. SEBON started studying the viability of new stock markets after three groups filed separate applications to open new stock exchange in the country. However, SEBON officials have asked all applicants to come up with a single proposal keeping in view the small size of economy and capital market in the country. Seeking permission to open new stock exchange, a business group, comprising Ram Babu Panta and Numa Nath Poudel, has registered an application in the name of National Stock Exchange. Similarly, another group with Chandra Dhakal, Kamal Gyawali and Gyan Bahadur GC as promoters has applied in the name of Kathmandu Stock Exchange. The third group, with Ace Development Bank as one of the promoters, has also registered the
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application. All three groups have already made internal preparation to operate new stock market in the country. “We have already prepared software worth Rs 50 million for share trading and more than two dozen financial institutions are already showing interest to invest in our venture,” said Kamal Gyawali, a promoter of National Stock Exchange. “We are also ready to set up Central Depository System in stock trading.” SEBON recently formed a committee to expedite the process of granting permission for new ventures. The committee is led by Lal Mani Joshi, board of director, SEBON. A high-level SEBON team, led by Joshi, is leaving for Malaysia on Sunday to study the experience of the East Asian nation which has reduced its stock exchanges to one from three. “We will learn from Malaysian experience of having more than one stock exchange as well as the modality of running mutual fund and Central Depository System,” said Giri, who is also in the delegation. Given the increasing number of listed companies in the country´s sole capital market - Nepal Stock Exchange Ltd (Nepse), experts have claimed that one more stock exchange in the country is viable. About 160 companies are listed in the state-owned Nepse. However, an official at the SEBON said decision to grant permission to new ventures has to be taken only after conducting in-depth study of capital market taking the declining number of stock exchanges in some countries into consideration. Source: www.myrepublica.com Date: 2009-10-04
GENERAL: Disqualified PLA discharge to resume on Oct 11 The process of discharging disqualified Maoist combatants is resuming on October 11, two and half months after it was stalled following non-cooperation by the combatants at Shaktikhor cantonment in Chitwan. "We are planning to resume the process from October 11. The details of the process will be finalized on Sunday," Minister for Peace and Reconstruction Rakam Chemjong told myrepublica on Friday. The government had begun the discharge process on July 17 from Shaktikhor cantonment but was forced to abort it after the combatants refused to cooperate with a government team assigned for the task. The process could not resume for two and half months due to widening differences between the Madhav Kumar Nepal-led government and the main opposition - UCPN
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(Maoist). It was only on September 11 that the Maoists agreed to cooperate with the government to resume the process. A government source at the Ministry of Peace and Reconstruction said on Friday that Minister Chemjong, Maoist leader Barsha Man Pun and UN representatives are visiting a cantonment either in Sindhuli district or Surkhet on October 11 to mark resumption of the discharge process. A team to be led by an under-secretary will accompany the Chemjong-led team to begin the discharge process. UNMIN disqualified these combatants as per terms mentioned in the Agreement on Monitoring of the Management of Arms and Armies (AMMAA), which was signed between the then seven-party alliance government and the Maoists on December 8, 2006. The disqualified combatants are either minors or late recruits. Releasing these combatants from the UNMIN-supervised cantonments and rehabilitating them is part of the ongoing peace process. Peace and Reconstruction Ministry Secretary Punya Prasad Neupane told Republica that details of the resumption are being finalized on Sunday during a meeting to be attended by government officials, Maoists and UN representatives. A source at the Ministry further said that the meeting is going to form a technical committee comprising government officials, UN experts and the Maoists. The committee will decided how and when to begin the discharge process in the remaining six cantonments. The disqualified combatants will have to leave the cantonments and will not be considered for integration into the security agencies, according to AMMAA. The government initially planned to bring the disqualified combatants out of the cantonments by November 2 when the process began on July 17. Officials said they are planning to meet the deadline by mobilizing more than one team to work simultaneously at the cantonments. The Peace and Reconstruction Ministry, which oversees the discharge process, plans to complete the discharge process in phases. In the first phase, the government will impart information to the disqualified combatants in their respective cantonments about why they were disqualified by UNMIN and on the agreements concerning their rehabilitation. The second phase will involve filling questionnaires on what they want. The disqualified will then be separated from the other combatants and will be cantoned in finally, the released combatants will be given vocational training to prepare them for their future. Source: www.myrepublica.com Date: 2009-10-03
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Haven for stolen bikes Kanchanpur - Users of stolen motorbikes are on the rise in Kanchanpur district. Smugglers, taking advantage of open border, bring in bikes stolen in India to Nepal. Motorbikes stolen in Belauri, Purnbash, Dodhara, Chadani and Bhramadev areas of India are being brought into use in Nepal with fake registration numbers. More people here have been purchasing such bikes due to cheaper prices. One can easily buy new bikes of any brands within just Rs. 5,000 to Rs. 10,000. While the price at showroom ranges from Rs. 100,000 to Rs. 150,000. The increasing trend of buying stolen bikes has shrunk pockets of two-wheel sellers. Interestingly, people living in rural areas, who hardly can own bikes, can be seen riding stolen bikes. Police say the number of stolen bikes is more than 3,000 alone in the district. Even though police launch crackdown on bike smugglers off and on, the trend of using such bikes is going unabated. Source: www.ekantipur.com Date: October 4, 2009 Groundswell of protest after Tihar RUPANDEHI: Dr Baburam Bhattarai, vice-chairperson, UCPN Maoist, today warned that the mass agitation would gather momentum after Tihar. “The movement will sweep away both the Nepali Congress and CPN-UML from their citadel of power,” he said. He predicted that the Maoists would grab power through revolt if the politics of consensus proved to be elusive. Describing the ongoing talks as a ‘futile’ exercise, he said: “Pulling down the NC and UML by force is the only way to bring them on the right track.” He urged the party cadres to be prepared for the mass protest. “There is no point to carry on holding talks. I only attended the parleys for the sake of representation,” he said while addressing a programme, which was held to welcome new entrants to the party. The function was held in Butwal. He exhorted all and sundry to join the protest, which is aimed at upholding civilian supremacy. He took a dig at the UML-led ruling coalition for dancing to the tune of external forces. He empathised with the political fluidity of the nation. He reposed faith in the constitution-drafting process within the stipulated timeframe.
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Dr Bhattarai said that the agreement among the parties could be reached only if their demands of civilian supremacy were addressed. The Maoists are also advocating amendment to the constitution to keep the army under control. Source: The Himalayan Times Date: 2009-10-04
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