NEPSE APP Launched
Nepal Stock Exchange (NEPSE) launched its authorised mobile app on July 5. Finance Minister Dr Ram Sharan Mahat unveiled the app at a programme held at the ministry. The app has been produced jointly by NEPSE, the national daily Aarthik Abhiyan and Braindigit IT Solution. NEPSE provides the statistics of transactions, Aarthik Abhiyan oversees the news aspects and Braindigit and Source Code handle the technical aspects of the app.
“The launch of this application has helped further modernise NEPSE,” said Dr Mahat. Securities Board of Nepal Chairman, Babu Ram Shrestha said the Board will facilitate the process to allow Nepse to provide ‘market depth’ feature as well. He said the application will help investors understand the status of the market.
NEPSE General Manager Sitaram Thapaliya said the app will play a vital role in keeping investors informed. Madan Lamsal, Editor-in-Chief of Aarthik Abhiyan, said the app will help distribute accurate news about the stock market. This application can be downloaded free from Google Play and iOS App Store.
NTA to Penalize UTL
Nepal Telecommunication Authority (NTA) is planning to penalise United Telecommunication Ltd for ignoring repeated calls to present a roll-out plan for using its unified license. NTA had asked UTL to submit a roll-out plan, on June 3 and June 14, which UTL has ignored, according to the state authority.
Digamber Jha, chairman of NTA says such negligence on the part of UTL is being taken very seriously. He added that this matter would be forwarded to the board, and the board may decide to cancel UTL’s frequency and license.
UTL has been in the news for the past few years. Recently, UTL paid Rs 35 million to NTA for its unified license. UTL was to become the second company with a unified license in Nepal, but because it has not submitted a roll-out plan, the license has not been issued. A company that has a unified license can operate all services related to telecommunication. A unified license is valid for 10 years, and after that it must be renewed every 5 years, said Achyutananda Mishra, NTA’s deputy spokesperson.
In 2011, UTL increased its capital to Rs 1.5 billion. The company has been trying to raise the figure to up to Rs 6 billion.
Furniture Expo from October 1
DRCS Events, Spaces magazine and Nepal Furniture and Furnishing Association will organise the fourth edition of Furnex Nepal from October 1-5 at the Bhrikuti Mandap Exhibition Hall. “The expo will be a good platform for promoting as well as disseminating information on furniture and furnishing materials,” said Kavindra Joshi, President of Nepal Furniture and Furnishing Association.
The expo, aimed at generating public interest in interior designing, will have 45 big and 17 small stalls showcasing office and home furniture, prefab homes and home appliances. Shaan Furniture is the title sponsor of the expo.
Joshi said IDC-2015, a competition for students of interior designing, will also be organised on the expo. Both events will be supported by FNCCI and Nepal Credit and Commerce Bank.
Silver Worth Rs 21 billion Imported in 11 months
Silver worth over Rs 21.15 billion was imported in the first 11 months of the last fiscal year 2014/15, official figures show. A total of 382,000 kg of silver was imported during the period, according to the Department of Customs. During the preceding fiscal year, 84,221 kg of silver worth Rs 11.33 billion had been imported over the same period.
Meanwhile, according to government figures, 1,582 hundred kg gold (worth Rs 5.97 billion) was imported during the first 11 months of 2014/15. During the preceding year, 5,997 kg of gold (worth Rs.23.97 billion) had been imported. Silver being cheaper than gold, banks can sell it quickly, though the profit margin is lower in it compared to gold.
Gionee Provides Rs. 5.5 Million to PM Relief Fund
Expressing sympathy over the deaths and destruction caused by the earthquake, Gionee has provided Rs. 5.5 million to the Prime Minister’s Relief Fund.
“Gionee feels immense sorrow for, and expresses its sympathy to, the victims of the tragic earthquake,” said William Lu, President of Gionee after handing over the cheque to Prime Minister Koirala.
Gionee has also set up the Gionee Sahayogi Haat Kosh with an initial Rs. 500,000 to start the fund. The fund will be used to build 25 temporary houses for earthquake survivors in Bhaktapur.
Lu also visited Bhaktapur, where he handed over temporary shelters to a local development committee. Gionee will help build more temporary houses in the coming months, he said.
During a programme in Kathmandu, Miss Nepal 2015 Evana Manandhar announced, on behalf of Gioneee, that from every smart phone sold in Nepal in the next three months, Rs 50 will go to the Gionee Sahayogi HaatKosh fund. The amount raised will be donated to Bal Mandir where it will go towards supporting at least five children.
Established in 2002, Gionee Communication Equipment Co., Ltd. is a hi-tech company engaged in mobile device designing, R&D, manufacturing, sales in global markets, and mobile internet application services.
Gionee entered Nepal last September and has opened more than 600 retail stores all over the country.
Pharmaceutical Factories Get GMP
The majority of pharmaceutical factories in Nepal operating in compliance with World Health Organization (WHO) guidelines have been declared as meeting WHO’s Good Manufacturing Product (GMP) standard. Out of 49 factories, 37 received the GMP mark. According to WHO, factories meeting the GMP standard are allowed to trade in the international market. “GMP standard factories can manufacture any kinds of pharmaceutical products with permission from the particular government,” said Shankar Ghimire, Vice-President of the Association of Pharmaceutical Producers of Nepal.
Brick Makers Want Out of VAT
Brick producers around the country have demanded that they be excluded from Value Added Tax (VAT) for five years after the government told them not to hike the price of bricks in view of the reconstruction effort. “By not raising the price of bricks, we should be excluded from VAT for at least five years,” said Shankar Bahadur Chand, General Secretary of the Federation of Nepal Brick Industries.
While making the request to the industry, the government also said that it has been flexible on issues like the establishment of new brick factories in newly-declared municipalities, and on the import of new technology.
The brick manufacturers have also demanded subsidized loans for the reconstruction of the damaged kilns.
Only 120.15 MW Electric Capacity Added in Last 5 Years
According to the economic survey of FY 2015/16, in last five years, a total of 120.15 MW of hydroelectricity was added to the national grid. This shows that on an average, 24.03 MW of electricity has been added to the national grid yearly over the past five years.
Officers of Nepal Electricity Authority and Ministry of Energy (MoE) say that this has happened because of the very slow progress of the mega projects.
Similarly, the latest economic survey shows that in 2013/14, 72 MW of electricity was added – the highest in the last five years. The government has targeted adding 600 MW of electricity to the national grid in 2015/16.
According to the latest figures, the gap between demand and supply of electricity has reached 473.1 MW.
Monetary Policy Forces Banks to Look for More Capital
Nepal Rastra Bank Governor, Dr Chiranjibi Nepal unveiled the central bank’s monetary policy on July 23. Nepal, who took office on March 20, has given continuity to most of the bank’s key rates and due consideration to the effects of the April earthquake.
But the highlight of the policy is that commercial banks need to increase their paid-up capital by as much as four fold by 2017/18. According to the new policy, commercial banks need to increase their capital to Rs 8 billion, and national-level development banks to Rs 2.5 billion. Similarly, development banks that cover 4-10 districts need to increase their capital to 1.2 billion, and financial institutions that cover 1-3 districts need to have at least Rs 400 million. The policy has been introduced to encourage banks to merge with one another, said the governor in his speech. BFIs have also been asked to keep aside a certain portion of profit to train human resources and fulfill corporate social responsibility.
NRB will now classify some commercial banks that can have an impact on the entire economy as systematically important banks (SIBs) and introduce different sets of measures to regulate these banks.
The biggest private sector bank, in terms of capital, is Global IME Bank (with Rs 5.01 billion in paid-up capital), the smallest is NCC (with Rs 1.47 billion). Rastriya Banijya Bank and the Agriculture Development Bank are the only banks that have a paid-up capital in excess of Rs 8 billion. Following the announcement, bank stocks were in high demand in the market as investors speculated that to increase the capital, banks will issue right shares. Due to this, NEPSE registered an increase of 40.11 points to close at 1003.38 on the same day.
In other major announcements, the central bank is to issue permission to establish a national-level Infrastructure Development Bank with a minimum paid-up capital of Rs 20 billion.
The central bank’s key rates such as cash reserve ratio (CRR) and statutory liquidity ratio (SLR), have remained unchanged. However, it has cut its policy rate to seven from eight per cent. The policy’s objective is to keep inflation under 8.5 per cent, to maintain foreign exchange reserves to finance the import of goods and services for at least eight months and help the government achieve its target to achieve a growth of six per cent.
Similarly, it has given priority to increase the rural population’s access to banking services. According to the policy, banks and financial institutions that want to open their branch in specified 114 villages and four municipalities, where poverty is the highest, can do so without the prior approval of the central bank. The provision has been extended to cover earthquake-affected districts, except for those in the Valley.
The governor has also announced some policy measures to provide relief to the earthquake-affected. According to the monetary policy, the central bank will refinance, at 0 per cent interest, loans issued to people affected by the earthquake to build residential houses. The banks can issue loans worth Rs 2.5 million to customers inside the Valley and 1.5 million to those outside the Valley at 2 per cent interest. Similarly, those who lost their citizenship cards during the quake, can now open bank accounts using their government-issued ID for the quake-affected.
NRB has given a two month deadline to commercial banks to phase-out their magnetic strip-based cards and introduce chip-based cards. This has been done to give the customers a sense of confidence in the banking system said, the governor.
Growth Forecast Lowered to 3.4 pc for 2014/15
The Institute for Development Studies has lowered its forecast for Nepal’s GDP growth in 2014/15, in the wake of the devastation caused by the April earthquake.
According to Nepal Economic Outlook 2015, published by the institute, the GDP growth rate has been forecasted to be around 3.4 per cent, down 1.4 percentage points from the forecast the institute made before the earthquake. The publication puts losses due to the earthquake at around Rs 9.4 billion to 18.8 billion.
Nepal Economic Outlook has analysed the state of Nepal's economy and made projections for macroeconomic variables such as GDP, inflation rate and trade balance. The publication says inflation is likely to hit double digits (around 12 percent) and trade deficit will rise further due to increase in imports of construction materials.
It suggests policy makers to focus on promoting mechanising agriculture; fine-tuning the supply chain management of agriculture sector, removing bottlenecks and improving harvest management.
Industrial growth rate will continue to decline due to insecurity, lack of access to finance, labour problems and lack of electricity and proper infrastructure, the report says. “These factors pull down the growth rate of productive industrial sector and encourages unproductive investment (house, land and auto investment) which is regarded as safe haven in chaos,” say the authors of the report.
The report, however, states that the service industry has shown remarkable growth rate. According to the report, the sector contributed around 52.242% to the GDP in 2013/2014. Banks and financial services remain an important part of service sector. But it too is exposed to the real estate sector; more than Rs 200 billion of the sector is in real estate. The study highlights the importance of hydro and tourism sectors, and encourages policies that invite foreign investment and technology.