IPO Result of Janata Bank

IPO result of Janata Bank has been publish
Janta Bank Ltd has allotted 60,00,000 units of Initial Public Offerings to its Investors.

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NRB introduces new loan payment provision

KATHMANDU, JUNE 4, 2012

The central bank has forbidden financial institutions from levying any extra charge on advance repayment of loans.

Issuing a circular today, Nepal Rastra Bank (NRB) has directed financial institutions to allow repayment of loans at the existing rate of interest in case the borrower wants to repay the outstanding dues following an interest hike.

“This provision will provide the borrower a chance to discontinue borrowing and repay the loan instead of paying a higher interest rate,” said spokesperson of NRB Bhaskar Mani Gyanwali. The borrower does not have to pay anything more than the outstanding dues and principal amount based on the earlier agreed upon interest rate.

Likewise, in its latest attempt to encourage agro lending, NRB has decided to calculate lending of up to Rs 10 million to non-credit and saving cooperatives as deprived sector lending. Loans of up to Rs 10 million floated to cooperatives who in turn lend to a group involved in agriculture, cattle rearing or poultry farming with a limit of up to Rs 90,000 per person will be eligible to be considered under this provision.

“We hope this will help encourage financial institutions to float loans to agro and farming through such co-operatives,” added Gyanwali. However, if such loans are found to be used for other purposes then the financial institution has to provision 150 per cent of the lent amount for possible loan loss, said the circular.

In order to promote small microfinance institutions and thus direct lendings to the deprived sector and ease the pain of looking for borrowers in remote areas by financial institutions, the central bank had also allowed the purchase of ordinary shares of microfinance institutions as deprived sector lending.

Deprived sector lending refers to small loans that are lent to the poor and rural people for small projects with a minimal collateral in order to promote formal banking in the rural areas.

According to the monetary policy, commercial banks have to lend 3.5 per cent of their total loans to the deprived sector while development banks and finance companies must lend 3 per cent and 2.5 per cent of their total loans respectively to the deprived sector, according to the monetary policy.

Likewise, NRB has directed financial institutions to consider those loans floated for only one year as term loans and even those loans floated by microfinance institutions that are meant to be paid within one year through installments are also be taken as term loans.

Source: THT

Gold hits historic high of Rs 56,800

KATHMANDU, JUNE 4, 2012

The precious yellow metal has reached another height in the domestic market due to the weakening rupee and rising international prices. Gold price was fixed at Rs 56,800 per tola (11.664 grams) today –– Rs 1,600 higher than yesterday’s price.

The international bullion market saw the price of gold rallying up on the cue of weak employment numbers in the US. On Friday, the discouraging US employment result shifted the focus of the investors from the US dollar to a more dependent safe haven gold.

Last month, gold was feared to have entered a bearish run as the weakening euro had driven investors to dollars instead of gold. Now, since the US economy also seems to be in troubled waters along with the Eurozone, gold has reclaimed its throne.

The strong dollar against the Nepali currency has also contributed in pushing the price of gold to its current high. The exchange rate for the dollar being around Rs 90 pushed the prices up despite gold being traded approximately at $1650 per ounce in the international commodities markets.

Gold had reached its earlier record of Rs 56,000 on May 4 after the government hiked the customs duty. The future of Greece staying in the euro along with the questionable Spanish solvency situation had already propelled the flight of investors to dollars and now with the escalated jobless rate in USA, gold is expected to go bull once again.

Source: THT

Central bank tweaks deprived sector lending provision

KATHMANDU, June 4, 2012

Banks and financial institutions can now classify every group loan of up to Rs 10 million extended to cooperatives, other than savings and credit cooperatives, as lending to the deprived sector, according to a latest directive issued by the central bank on Sunday.

Nepal Rastra Bank (NRB) in its directive has however, said cooperatives cannot channel such credit amount for purposes other than group farming, poultry farming and animal husbandry. Loans to each member of cooperative also should not exceed Rs 90,000, the directive has said.

“The provision was introduced to promote the agricultural sector,” NRB Spokesperson Bhaskar Mani Gyawali said. “We hope this will encourage banks and financial institutions to flow credit to the sector.”

The directive was introduced at a time when NRB has directed all banks and financial institutions to extend at least 10 percent of the total lending to agriculture and energy sectors. The directive is also expected to help banks and financial institutions to meet their deprived sector lending target, which stand at 3.5 percent, 3 percent and 2.5 percent of the total credit portfolio for commercial banks, development banks and finance companies.

“But in case such credit is misused, banks and financial institutions have to label them as bad loans and slap 150 percent risk weight,” the directive has said. “However, no additional fee should be charged in case the borrower wants to clear the debt prior to maturity because of change in interest rates or terms and conditions,” the directive has said.

Meanwhile, the central bank in its directive has also said that loans extended by microfinance institutions with condition of recouping the outstanding payment on installment basis should be classified as term loans. “But such credit should be categorized as sub-standard, doubtful or bad loans even if the borrower defaults on payment of one installment,” according to Nepal Rastra Bank.

Source: Republica

Govt, NEA to own 90pc of National Grid

KATHMANDU, JUN 04 - 2012

The government has decided to hold a majority stake in the proposed National Grid Company (NGC). The government and the Nepal Electricity Authority (NEA) will own 90 percent of the shares and the rest will be sold to the general public.

Originally, it was planned that a dozen government agencies would own shares in NGC. Energy Ministry officials said that the idea of allocating shares to ministries and government agencies had been dumped temporarily as the process would take too long. They added that the reason for giving a majority stake to the government was to cut red tape.

“Currently, the major concern is to set up the company as soon as possible,” said Anup Prashad Upadhya, joint secretary at the Ministry of Energy. “We haven’t mentioned the names of the ministries and agencies which would own shares in NGC as the process is lengthy and complex and might become an obstacle to setting up the company.”

He added that once the documents are approved by the Finance Ministry, government agencies will be able to acquire shares.

The Energy Ministry has sent the articles of association and the articles of memorandum to establish NGC to the Finance Ministry for its okay. “Once the documents are endorsed by the Finance Ministry, we will register the company,” said Sher Singh Bhat, NEA director who heads the committee to finalise legal documents.

The proposed company would have an authorised capital of Rs 25 billion, issued capital of Rs 5 billion and paid-up capital of Rs 2 billion. NGC will operate all the transmission lines in the country having a capacity of more than 33 KV. It will levy a wheeling charge on all the power producers for use of the lines.

Independent power producers (IPPs) doubt the company will be formed as the Nepal Electricity Regulatory Commission Act 2008 which envisions the formation of a separate transmission company is yet to be endorsed. However, ministry officials say it will not make much difference as the company will be established as per the Company Act.

IPPs have long been demanding that the NEA be unbundled into separate transmission, production and distribution companies.

“The unbundling of the NEA into three separate companies is crucial as the NEA alone cannot focus on the development of transmission lines, production process

and distribution system,” said Subarna Das Shrestha, president of the Independent Power Producers’ Association of Nepal.

Source: The Kathmandu Post

Nepal, China holding formal security, border talks

KATHMANDU, JUN 04 - 2012

Nepal and China have started talking security and border related issues from the Home Secretary to the district levels, gradually formalising bilateral mechanisms to check cross border crime and share information.

Though such meetings between the two sides used to take place in the past, the recent ones are being held in a formal manner for the first time.

"We have started taking these various levels of mechanism in a formal way. Starting from the Home Secretary level, both sides have now agreed to hold meetings at the district level for effective coordination of border security as well as information sharing," said Home Ministry spokesperson Shanker Koirala.

The two sides have recently agreed to share regular information through diplomatic channels. They recently concluded border security talks in Lhasa, where Koirala led the Nepali delegation. Major General of the Chinese People's Liberation Army, Yue Jun, led the Chinese side.

"We did not have formal meeting in the past. Now, we have started making them formal," Koirala said.

Nepal and China have another mechanism at the Joint Secretary Level. The division chief at the Home Ministry, who looks after peace and security, and his Chinese counterpart at the Ministry of Public Security are meeting on a yearly basis.

"The Lhasa meeting concluded last Friday and we discussed information sharing, cooperation between security personnel stationed at border areas, curbing cross border criminal activities and drug trafficking, while we also agreed to work together at the district level too," said another participant of the meeting. "The Chinese side also raised the issue of Tibetan refugees and asked the Nepali side to curb their activities," the official said.

Home Secretary Sushil Jung Bahadur Rana will be visiting Beijing at the end of this month or early in July to attend a highest level of bilateral mechanism meeting. The visit and the agenda are, however, yet to be endorsed by the Cabinet.

Also, a Chinese team from Yunnan Province led by the Chief of the Police Officer Academy is arriving in Kathmandu in mid June to look into the possibilities of opening a college for the Armed Police Force.

During the visit of Chinese Premier Wen Jiabao, the two sides had agreed to establish an Armed Police Force college. According to the agreement, China will provide RMB 4 million for a preliminary study to be carried out for the establishment of the college.

Source: The Kathmandu Post

Govt to issue new licence for international flight operation

KATHMANDU, JUNE 4, 2012

The government, with an aim to promote new private companies and the existing ones, has announced the application to issue licence for the establishment of airlines or extension of domestic airlines for international air service operation by private airlines.

“We are trying to promote the existing domestic airline companies and at the same time also trying to introduce new private companies to start airline services,” said joint secretary at the Ministry of Culture, Tourism and Civil Aviation Suresh Acharya.

The ministry is planning to issue two licences –– one for cargo service and the other for passenger service. The ministry on May 25, 2012 had announced for proposals requesting for International Airlines Operating Licence by interested companies.

International companies currently have 94 per cent market share of the Nepali airline sector. “There are a number of private companies interested and through this announcement we are planning to provide them the opportunity,” he said.

According to a decision of the Council of Ministers on December 8, 2009, registered private companies can apply for a licence for operating international flights. At the same time, existing private airlines in Nepal can also apply for international flight operation licence.

There are 28 international airline operators, 10 fix-wing operators and five rotary-wing operators. According to the Civil Aviation Authority of Nepal (CAAN), Kingfisher Airlines has postponed its flights among the 28 different international operators.

Meanwhile, three different international operators –– Malaysian Air, Air Asia and BB Airways –– will soon start flights from Tribhuwan International Airport. Malaysian Air will start its flights from June, Air Asia from June 3 and BB Airways is preparing for its flight from September. BB Airways is promoted by TBI Group — an investment company led by Non-Resident Nepalese Association treasurer Bhawan Bhatta.

According to the ministry, the private companies willing to apply for the international flight operation licence must follow the country’s civil aviation regulations. The airline first needs to get permission from the ministry before approaching CAAN for its evaluation.

A new airline needs a bank guarantee of Rs 500 million and should have at least three aircraft, either on lease or on purchase basis, before it starts operations. The potential international airlines should put up a security bond of Rs 5 million and have a paid up capital of Rs 500 million. The company should also pay Rs 50,000 for the terms of reference document.

An airline that fulfills these terms of reference must obtain the air operator certificate within a year and start flights within the next year.

 

Source: THT

Nepal asks US to bring forward TIFA meet to July

KATHMANDU, JUN 04 - 2012

The government of Nepal has requested the US government to bring forward the second joint council meeting of the Trade and Investment Framework Agreement (TIFA) to July.

The meeting was scheduled to be held in September, and Nepal has asked for an earlier date as many trade related issues needed to be settled immediately.

“Though the meeting is supposed to be held annually, we have missed the deadline,” said an official of the Ministry of Commerce and Supplies (MoCS). He added that the delay would affect Nepal’s trade with the US as measures to simplify trade between the two countries were expected to be discussed during the second TIFA meeting.

MoCS officials said that holding the meeting at the earliest was critical as a trade strategy needs to be developed to promote trade and investment between the two countries. “Without a specific trade strategy, Nepal and the US will not know the scope and limitations of the TIFA joint council itself,” said Naindra Prasad Upadhyay, joint secretary at the MoCS.

Nepal has asked for preferential treatment for 11 products, including pashmina and readymade garments, in the US. The US government has not responded to the request. Ministry officials have put much significance on the second TIFA meeting as the meeting will discuss the Generalised System of Preference facility for Nepali products. They said that the government wants to finalize on issues like market access for Nepali pashmina and readymade garments, promotion of investment between the two countries and US investment in Nepal during Nepal Investment Year 2012-13.

The first meeting of the TIFA Council was held on April 17, 2011 in Washington, the same day TIFA was signed. The US is Nepal’s second largest export market. It is one of the few trading partners with which Nepal has a trade surplus. In the last fiscal year, Nepal exported goods worth Rs 4.39 billion to the US. Nepal has been exporting products such as readymade garments, handicraft items, herbs, pashmina and woollen carpets to the US.

The government and the private sector are preparing to review the understanding with the US to identify areas of cooperation during the second joint council meeting of TIFA. The ministry has also organised a public-private dialogue to identify opportunities and issues in tourism, energy, manufacturing, agriculture and forestry.

According to the ministry, the report of the public-private dialogue will be helpful to prepare the major agenda for the second joint council meeting. The ministry is planning to organise an interaction or an internal meeting to prepare the final agenda for the second meeting.

“We will send the agenda after we hear from the US about our proposal to hold the meeting in July,” said Upadhyay.

Source: The Kathmandu Post

Nepse lists 3.17m bonus, ordinary shares

KATHMANDU, June 3, 2012

Nepal Stock Exchange (Nepse) has listed 3.17 million units of bonus and ordinary shares of six different companies for trading last week. This includes one million units of ordinary shares of First Micro-finance Development Bank and 112,084 units of bonus shares of NIDC Capital Market, 96,447 units of bonus shares of Alliance Insurance Company, 1.01 million units of Global Bank, 474, 090 units of bonus shares Ace Development Bank and 474, 460 units of bonus shares of Shiddhartha Bank.

The Securities Board of Nepal (Sebon) has also approved 37.49 million units of bonus shares issue worth Rs 3.48 billion belonging to 43 different companies during the last 10 months of the current fiscal year.

Sebon -- the security market regulator -- has approved right shares issue worth Rs 260.85 million belonging to four different companies in April-end.
Unique Finance and Patan Finance companies got permission to issue right shares worth Rs 100 million and Rs 33 million respectively. Triveni Bikash Bank and Kankai Bikash Bank also got permission to issue right shares worth Rs 67.8 million and Rs 60 million respectively.

Similarly, Sebon has given its nod for shares and debentures issues worth Rs 1.98 billion by 14 different companies until mid-May under the Initial Public Offering (IPO). Bagmati Development Bank, Manjushree Financial Institution, First Micro Finance Development Bank, Nepal Consumer Development Bank, Summit Micro Finance Development Bank, Janata Bank Nepal, Metro Development Bank, Kanchan Development Bank, Gulmi Bikash Bank, Tourism Development Bank, Pacific Development Bank and Lotus Investment Finance have been granted permission to issue ordinary shares amounting to Rs 1.58 billion.

Siddhartha Bank and Nepal SBI Bank got approval from Sebon to issue debentures worth Rs 400 million each.

Meanwhile, Nepse reported a total of 5,321 transactions involving 6,87,325 units of shares worth Rs 240 million last week. Nepse saw a whopping drop (33.54 percent) in transactions amount this week compared to the previous week. Nepse index, which indicates investor confidence, lost 39.32 points over the week amid persisting political uncertainty in the country.

Source: Republica