Tourism created 3.3 percent of all jobs in Nepal in 2011

 Travel and tourism has emerged as a major job provider in Nepal with the sector accounting for 3.3 percent of the total employment in the country in 2011.

According to the publication entitled Travel and Tourism Economic Impact 2012 Nepal published by the World Travel and Tourism Council (WTTC), the travel trade generated 412,500 direct

jobs last year.  The WTTC report has projected that the travel trade sector’s contribution to the country’s total employment will rise to 3.7 percent in 2012.

The direct employment provided by the sector includes employment by hotels, travel agents, airlines and other passenger transportation services (excluding commuter services).

It also includes the activities of restaurants and leisure industries directly supported by tourists.

According to the report, the travel and tourism sector attracted capital investment of Rs 12 billion

in 2011. “This is expected to rise by 5.4 percent in 2012 and by 4.9 percent per annum over the next 10 years to Rs 20.4 billion in 2022,” said the report.

The total contribution of the travel and tourism sector to the Gross Domestic Product (GDP) stood at Rs 119.1 billion in 2011, said the WTTC.

Prachanda Man Shrestha, former chief executive officer of the Nepal Tourism Board, said that Nepal’s tourism has rebounded with confidence and that it could be a competitive advantage service sector to address the country’s trade deficit in the future. “In spite of inadequate infrastructure and other hurdles, tourism is showing positive hopes for the country’s economy as reflected in the report,” said Shrestha.

Nepal received a total of 735,965 international visitors in 2011 and earned revenue worth Rs 28.6 billion. The income from international visitors is forecast to grow by 2.8 percent in 2012, according to the report.

The report shows that both international and domestic travellers spend most of their money on leisure. It says leisure travel spending of both domestic and inbound travellers generated 80.6 percent of the direct travel and tourism GDP in 2011 compared with 19.4 percent for business travel spending.

Despite the impressive performance in 2011, Nepal’s tourism industry is way behind other tourist destinations.

The WTTC report has ranked Nepal 34 in terms of travel and tourism direct contribution to employment and 127 in terms of attracting foreign visitors among 181 tourist destinations.

Likewise, the WTTC has placed Nepal in the 120th position in capital investment in tourism and at the 127th position in tourist spending.

Source: Kantipur

Five countries keen to increase flights to Ktm

 As Nepal witnesses substantial rise in number of air passengers, five countries have expressed interest to increase flight frequency to Kathmandu. United Arab Emirates (UAE), Bhutan, Pakistan, Saudi Arabia and Jordan have approached the government to increase flight frequency and seat frequency.

Along with number of flights, these countries have approached Nepal to review other particulars like route schedule while reviewing the Air Service Agreement (ASA), according to Suresh Acharya, joint-secretary at Ministry of Tourism and Civil Aviation (MoTCA).

Currently, four airlines from UAE -- Air Arabia, RAK Airways, Fly Dubai and Etihad, are operating 38 flights a week to Kathmandu. The existing ASA allows UAE-based carriers to operate 28 flights a week on the route.

The government has allowed them to operate 10 additional flights a week on temporary operation permit (TOP) basis. Air Arabia and Fly Dubai have permission to operate 14 flights a week each, while Etihad can operate up to seven flights. RAK Airways, which has permission to operate three flights a week, is currently operating two flights on weekly basis.

UAE has requested the government to increase number of flights to Kathmandu to 60 flights a week.

Similarly, Pakistan, which has single-designated ASA with Nepal, has approached the government to add more seats to and from Kathmandu. Bhutan and Jordan are also planning to add flight frequencies to and from Kathmandu. Earlier this year, USA and Australia had sent a proposal to the government, expressing interest to establish air connectivity with Kathmandu. However, there has been no further development on the proposals.

Nepal has signed ASA with 36 countries so far.

Although requests for increasing flight frequency to Kathmandu is encouraging, officials said recent instructions of International Relations and Human Rights Committee of parliament, which has asked the government to not be generous on fifth freedom rights, could pose difficulties for them while reviewing ASA.

The committee had issued such an instruction mainly after the MoTCA decided to grant fifth freedom rights to Air Arabia on Kathmandu-Kuala Lumpur sector. A writ petition too was filed against the decision at the Supreme Court. The case is currently sub judice in the apex court.

Though the apex court has yet to issue verdict on the case, instruction of the parliamentary committee had compelled the ministry to revoke its decision of awarding fifth freedom rights to Air Arabia in December, 2010.

“As the committee´s decision goes against existing ASA with UAE, it is likely to create problem while reviewing it,” the official said, adding: “Other countries are also seeking fifth freedom rights.”

Source: Republica

Return rate of listed debentures declining

KATHMANDU, APR 05, 2012

Interest rates for debentures that had gone up to as high as 12.5 per cent in the past have started decreasing due to the lowering deposit rates in the market in recent months. But its still higher than the savings interest rates.

Siddhartha Bank is coming up with corporate debenture issue worth Rs 400 million that will yield 11 per cent interest rate. In November 2011, Nepal Investment Bank had issued debentures worth Rs 300 million at 12 per cent coupon rate with a seven-year maturity period. In February, Nepal SBI Bank had also issued debentures worth Rs 400 million at 12.5 per cent coupon rate.

Siddhartha Bank has been granted approval by Securities Board of Nepal to issue seven-year redeemable corporate bonds — SBL Debenture 2075 — at a par value of Rs 1,000. The bank will sell Rs 80 million worth of bonds to the public and remaining bonds of Rs 320 million will be allotted to financial institutions and other institutional savers through private placement.

Earlier too in 2008, the bank had issued a different seven-year redeemable debenture –– Siddhartha Bank Debenture, 2072, at 8.5 per cent coupon rate. In recent times, banks have taken to issuing bonds as an instrument to raise liquidity. “Banks largely go for bonds to raise necessary funds if they find their capital adequacy will be short of the prescribed limit set by central bank,” pointed out spokesperson for Nepal Rastra Bank Bhaskar Mani Gyanwali.

Unlike equities, debentures are debt instruments that a company uses to borrow money from investors without collateral but with a promissory note that it will be repaid after a certain period and with a certain interest.

The debenture or bond units can be traded at the secondary market. However, Nepse has not seen any transaction of any single bond unit since it began listing bonds.

In order to meet its capital adequacy as prescribed by the central bank to be able to float more loans, banks are resorting to debenture issuances. “We allow banks to issue bonds to meet their capital adequacy if other factors are positive,” said Gyanwali.

In the secondary market, at present, there are 13 debentures belonging to 10 companies. Of the 10 companies, nine are commercial banks and the other is Nepal Electricity Authority. Corporate debentures amount to Rs 4.97 billion. In addition to corporate debentures, there are government bonds worth Rs 22.4 billion in the secondary market. Bonds issued by corporates and the government are primarily absorbed by banks and financial institutions to maintain their Statutory Liquidity Ratio, and they prefer not to sell the bonds as the profit obtained from trading these bonds is also much.

It is not only ignorance among general investors but also the higher return of shares in the earlier phase and higher deposit rates in the later phase which has overshadowed bonds trading. Likewise, it has also been neglected due to the absence of specialised market intermediaries who deal with fixed income brokerage houses.

Interest rates for debentures that had gone up to as high as 12.5 per cent in the past have started decreasing due to the lowering deposit rates in the market in recent months. But its still higher than the savings interest rates.

Siddhartha Bank is coming up with corporate debenture issue worth Rs 400 million that will yield 11 per cent interest rate. In November 2011, Nepal Investment Bank had issued debentures worth Rs 300 million at 12 per cent coupon rate with a seven-year maturity period. In February, Nepal SBI Bank had also issued debentures worth Rs 400 million at 12.5 per cent coupon rate.

Siddhartha Bank has been granted approval by Securities Board of Nepal to issue seven-year redeemable corporate bonds — SBL Debenture 2075 — at a par value of Rs 1,000. The bank will sell Rs 80 million worth of bonds to the public and remaining bonds of Rs 320 million will be allotted to financial institutions and other institutional savers through private placement.

Earlier too in 2008, the bank had issued a different seven-year redeemable debenture –– Siddhartha Bank Debenture, 2072, at 8.5 per cent coupon rate. In recent times, banks have taken to issuing bonds as an instrument to raise liquidity. “Banks largely go for bonds to raise necessary funds if they find their capital adequacy will be short of the prescribed limit set by central bank,” pointed out spokesperson for Nepal Rastra Bank Bhaskar Mani Gyanwali.

Unlike equities, debentures are debt instruments that a company uses to borrow money from investors without collateral but with a promissory note that it will be repaid after a certain period and with a certain interest.

The debenture or bond units can be traded at the secondary market. However, Nepse has not seen any transaction of any single bond unit since it began listing bonds.

In order to meet its capital adequacy as prescribed by the central bank to be able to float more loans, banks are resorting to debenture issuances. “We allow banks to issue bonds to meet their capital adequacy if other factors are positive,” said Gyanwali.

In the secondary market, at present, there are 13 debentures belonging to 10 companies. Of the 10 companies, nine are commercial banks and the other is Nepal Electricity Authority. Corporate debentures amount to Rs 4.97 billion. In addition to corporate debentures, there are government bonds worth Rs 22.4 billion in the secondary market. Bonds issued by corporates and the government are primarily absorbed by banks and financial institutions to maintain their Statutory Liquidity Ratio, and they prefer not to sell the bonds as the profit obtained from trading these bonds is also much.

It is not only ignorance among general investors but also the higher return of shares in the earlier phase and higher deposit rates in the later phase which has overshadowed bonds trading. Likewise, it has also been neglected due to the absence of specialised market intermediaries who deal with fixed income brokerage houses.

Source: THT

Nepal Telecoms income growth rate to slowdown

KATHMANDU, APR 05, 2012

Nepal Telecom (NT) has projected a dramatic drop in its gross income growth rate in the current fiscal year as compared to last fiscal year.

The gross income growth rate will decrease to 4.17 per cent in the current fiscal year as compared to the growth rate of 9.65 per cent in the last fiscal year (2010-11), the company said during its fourth annual general meeting (AGM) here today. “It had registered 22.30 per cent gross income in the fiscal year 2009-10 as compared to a fiscal year ago.”

The gross income of NT touched Rs 29.85 billion in the last fiscal year 2010-11 as compared to Rs 27.22 billion in fiscal year 2009-10. “The gross income of NT will touch Rs 31.09 billion this fiscal year,” estimated Nepal Telecom that has witnessed a huge increase in administrative and employee expenses.

Share holders of the company — that has 150,000,000 unit shares listed at a face value of Rs 100 per unit — will get Rs 45 per unit as cash dividend from last fiscal year’s profit. Its shares were traded at Rs 402 per unit today.

“NT spent a total of Rs 3.68 billion on its employees during fiscal year 2010-11 as compared to Rs 2.61 billion a fiscal year ago,” according to the report distributed at the AGM.” Similarly, its administrative cost also increased to Rs 1.52 billion in fiscal year 2010-11 from Rs 1 billion in fiscal year 2009-10.”

NT contributed Rs 16.27 billion as revenue during the last fiscal year. It had contributed Rs 15.80 billion as revenue in the previous fiscal year.

Addressing the AGM, chairman of the NT board Abanindra Kumar Shrestha pledged to expand its service and make it more reliable. “Nepal Telecom will increase the capacity of its GSM service by installing equipment for one million lines,” he said.

Source:  THT