Views of a Nepali Economist

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1. Korean Language Test results out
*50,043 applicants had taken the test
*only 15,298 passed
*13,298 applicants will work in production related job and remaining 2,000 in agriculture sector
*South Korea is a lucrative destination for Nepali workers with a monthly average income of $1,000

2.Deposits in commercial banks up in Q4

RBB, which has the highest deposit base among commercial banks, saw its deposits rise 13.44 percent in Q4 against a growth of 4.02 percent in the previous quarter. The bank collected deposits worth Rs 8.75 billion during Q4. RBB’s total deposits as of the end of fiscal 2010-11 amounted to Rs 73.92 billion.

Nepal Bank Limited collected more than Rs 4.47 billion in deposits during Q4. Its total deposits at the end of fiscal 2010-11 stood at Rs 46.80 billion, up 10.56 percent from the previous quarter.

Agricultural Development Bank saw its deposits going up 6.17 percent in the last quarter against a growth of 1.61 percent in previous quarter.

3. Chinese team to study Ring Road widening has arrived in Kathmandu

The 18-member team has geotechnical engineers, traffic engineers, material engineers and other technical experts.

The team will spend 40 days in Kathmandu to do a survey for widening 9.5 km of the 27-km long Ring Road in the first phase.

The Ring Road improvement project will upgrade the current four-lane road to eight lanes (a four-lane, two-way main road, a four-lane, two-way relief road, a two-way bicycle path and a two-way pedestrian path, including bus stations and parking lots).

The road widening work is expected to be completed by 2013 utilising resources received as grant assistance from China annually.

On Feb 28, 2011, the Chinese government had agreed to provide a grant assistance of RMB 50 million (Rs 547 million) for widening the Ring Road and other projects. The technical team will design a simple urban flyover; three pedestrian overpasses will also be built. Even though the locations for the flyover and overpasses have not been fixed, the project is likely to select Kalanki Chowk to build the flyover with a signalised intersection underneath for pedestrians.

4. Indian overland tourist arrivals up 74pc

*298,821 Indian tourists visited Nepal in 2009 via land routes
*520,522 Indian tourists visited Nepal in 2010 via land routes
*This is a 74 percent increase

*154,086 third-country tourists entered Nepal by land in 2010

*Major entry points for Indian tourists were: Vittamod (Janakpur) with 17 percent, Birgunj with 13 percent, Kakarbhitta with 8 percent, Biratnagar with 5 percent, Nepalgunj and Mahendranagar with 3 percent each and Dhangadhi with 1 percent.

*96,928 vehicles entered Nepal through eight border points in 2010, an increment of 22 percent over the previous year's figures.
*46 percent of tourists coming via Indian land routes came by public bus and 39 percent by private vehicles.

*For 2010:
Entry Point // Number of Tourists // Percent Of the total
Birgunj // 89,544 // 13 Percent
Vittamod (Janakpur) // 112,038 // 17 Percent
Kakkarbhitta // 55,098 // 8 Percent
Biratnagar // 32,320 // 5 Percent
Nepalgunj // 17,919 // 3 Percent
Dhangadhi // 8,730 // 1 Percent
Mahendranagar // 21,117 // 3 Percent
Bhairahawa // 337,842 // 50 Percent

5. BFIs barred from opening accounts amongst themselves
According to the NRB:

Financial institutions should collect deposits and lend...If they park their deposits in other institutions, it will create anomalies. Therefore, we have decided to stop it

I believe this is a good step by the NRB especially because:

NRB’s latest statistics show that commercial banks have deposits worth Rs 670 billion, development banks Rs 90 billion and finance companies Rs 84 billion.

6. Whole-Genome Study proves that Nepalese UN-peacekeepers brought Cholera to Haiti that has killed 6000 people so far

7. Bhutanese refugee numbers in Nepal nearly halved after re-settlement overseas

8. New Hydropower rules in Nepal makes it difficult for Indian investors to invest in Nepal

Labels: ADBL, Bhutan, china, cholera, haiti, hydroppower, korean language test, liquidity, migration, NBB, nepal rastra bank, refugees, ring road, tourism

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1. Government to expand micro-enterprise programs

Cottage Industry Development Committee (CIDC) will implement the programs in Tanahun, Baglung, Syangja, Solukhumbu, Illam, Taplejung, Rukum, Dhankuta, Darchula and Bajhang.

Federation of Nepal Cottage and Small Industries (FNCSI) will execute it in Morang, Siraha, Saptari, Dhanusha, Bara, Makawanpur, Palpa, Kailali, Nawalparasi and Kanchanpur.

2. Department of Revenue Investigation (DRI)moves court against three firms for evading income tax, VAT and excise duty.

Bishal Chemical Industries, Samyam Enterprises and Bishal Jarda Factory...together evaded Rs 290 million in VAT, excise duty and income tax.

...as existing laws imposes 200 percent penalty for such evasion, the department has slapped penalty of Rs 580 million for the three firms.

3. Government to ban use of plastics bags from next week

Minister for Environment, Sunil Kumar Manandhar said the government was going to ban the use of plastic bags of less than 20 micron in the country to be effective from the next week.

The offenders will be fined between Rs. 500 to Rs. 50,000

4. Over 45,000 Nepalis left for foreign jobs within a month

...number of Nepalis leaving the country for overseas jobs increased by 52.15 percent, to 45,165 from mid-July to mid-August compared to the figure of the same period last year...A total of 29,685 Nepalis had gone abroad for jobs during that period last year.

Among last month's migrant workers, the number of male and female migrants was 43,163 and 2,002 respectively.

Qatar remained top host for Nepali job seekers, accepting 15,702 workers compared to other countries Malaysia (9671), Saudi Arabia (8538), United Arab Emirate (6873) and Kuwait (2088)

5. Inter-bank lending on the rise

6. Deposits in co-ops more than doubled last fiscal year

Cooperatives are holding deposits of Rs 150 billion as of the last fiscal year, up from Rs 70 billion a year ago, according to the Department of Cooperatives.

Their lending grew to Rs 105 billion last year from Rs 43.46 billion in the previous year.

Saving and credit cooperatives are the biggest receivers of public deposits. As of mid-March, such cooperatives held Rs 97.49 billion, while total deposits in all types of cooperatives stood at Rs 130 billion.

There are a total of 22,646 cooperatives in the country, of which 10,558 are saving and credit, 4,096 multipurpose, 3,144 agriculture, 1,748 dairy and 1,379 consumer. Likewise, there are 371 cooperatives in electricity production, 161 in vegetable and fruits production, 104 in tea production, 67 in coffee production, 61 in health sector, 51 in honey production, 73 in herbal production and 833 in other categories.

DoC statistics show that 2,922 new cooperatives were registered last year.

7. Banks see sharp fall in PE ratios

Price to earning ratio (PE ratio)...one of the major investment indicators of the stock market...is calculated by dividing share price by per share earning.

Stock analysts say an average PE ratio of 15 is justifiable for commercial banks.

...the PE ratio came down sharply over the last year along with the freefall in the stock market.

Currently, Nepal Investment Bank, Agriculture Development Bank, Nepal Bangladesh Bank and Lumbini Bank have PE ratios less than 10.

A majority of the 17 banks that published financial results of the last fiscal year saw their PE ratio standing between 10 and 20. This is a sharp fall compared to the previous year when the ratio was above 20. Last year, Machhapuchhre Bank’s PE ratio was as high as 56.90 followed by Global Bank with 52.48. Now, Global’s ratio has come down to 13.85. The Standard Chartered’s ratio came down to 25.92 from 42.23. Other banks witnessing PE ratio above 20 are DCBL Bank and Citizens Bank International.

8. Reform process in Rastriya Banijya Bank(RBB)and Agriculture Development Bank Limited(ADBL)take back seat

Daily operations of these banks have been affected for the last few weeks due to strikes called by the trade union affiliated to the Nepali Congress (NC)

In both banks, reforms measures have been carried out with foreign aid. RBB is under the reform process as per the World Bank-sponsored Financial Sector Reform Programme, while Asian Development Bank has aided the reforms in ADBL.

Although the financial sector reform programme will end in December, RBB will still remain as a sick bank with negative net worth of billions of rupees.

The central bank has also failed to appoint a CEO in Nepal Bank Limited for the last four years even after five attempts. Currently, NRB’s own management team is running the oldest bank of the country.

9. A bizarre project in Nepal, At Buddha’s birthplace: A Chinese development proposal causes disbelief

Labels: ADBL, cooperatives, evasion, interbank lending, microfinance, migration, RBB, remittance, stock market, VAT