Gold Price reaches Rs.52,350 per tola due to appreciating US dollar

KATHMANDU, NEPAL

A unit of the US dollar will fetch Rs 90 as the appreciating dollar has crossed the 11-month highest against the Nepali rupee. The appreciation in the dollar exchange rate also helped the price of gold surge by Rs 1,150 per tola in the domestic market.

The reference dollar exchange rate determined by Nepal Rastra Bank (NRB) stands at Rs 90 as buying rate for tomorrow based on today’s forex trading. Likewise, NRB fixed the selling rate for the dollar at Rs 90.6 for tomorrow. The dollar exchange rate was this high back on June 29, 2012, at Rs 90.80. Since then the dollar had not reached this level.

As the Indian rupee (INR) — with which the Nepali currency (NPR) is pegged — dropped, hitting a 10-month low, NPR was taken along the plunge. According to Indian forex analysts, the Reserve Bank of India (RBI)’s governor’s remarks that dampened hopes regarding rate cuts worked against INR. RBI governor Duvvuri Subbarao had stressed that the Indian central bank was more concerned about containing inflation and current account gap.

Yesterday, NRB had fixed the reference dollar exchange rate at Rs 89.4 for buying and Rs 90.06 for selling. Commercial banks and money exchangers fix their own exchange rate based on their own dollar trading in the foreign exchange market.

The expensive dollar will inflate Nepal’s export and remittance receipts while it will make imports from third countries such as gadgets costlier. The domestic market saw the price of gold surge by Rs 1150 per tola due to the appreciation in the dollar exchange rate along with the improving price of the yellow metal in the international market.

Gold price reached Rs 52,350 per tola (11.664 grams) today here as it reached $1414 in the global bullion market. Gold was traded at Rs 51,200 per tola yesterday. Along with the increasing price of gold in the commodities market, the strong dollar also contributed to the surge in the price of the yellow metal here in the domestic market.

The exchange rate of the dollar has risen above Rs 90, making dollar denominated imported goods dearer in Nepal. The price of commodities such as that of gold and silver were continuously declining as the United States Federal Reserve is preparing to wrap up its bond buying programme — quantitative easing — soon. The improving US economy and statistics of better consumer confidence and absence of dreaded inflation has made the purchase of gold and silver — the most popular inflation hedge — unnecessary.

However, the latest data on the US economy being against expectations, and which showed less than the estimated expansion in the US economy in the first quarter and increased jobless claims, signalled that the US Fed is not in a position to scale down its asset purchase package in the near future. This has once again sparked the interest of investors in precious metals.

Meanwhile, in the domestic market, bullion traders are a bit relieved with the increased quota

of gold import to 20 kilo per day from the previous 15 kilo. General secretary of the Federation of Gold and Silver Traders Association Mani Ratna Shakya expressed that the additional five kilo has eased

the shortage in the market to an extent, but supply is yet to be smooth.

Source: The Himalayan Times, 1st June 2013
You may also like:
Massive increase in internet users in Nepal 

Read More

Marriot International to Start Hotel Operations in Nepal

KATHMANDU, NEPAL

With domestic and inter-regional tourism aiding hotel demand, a range of leading global hotel chains have planned their presence in Nepal.

It was Sheraton at first, and now Marriott International, a leading hotel chain based in Maryland, US. The list does not stop here. A leading FMCG multinational is also planning to establish a five-star property in Kathmandu.

On Thursday, Nepal Hospitality Group (NHG) signed a management agreement with a subsidiary of Marriott International to open a four-star property dubbed—Fairfield by Marriott Kathmandu.
The international brand, Marriott, will look after the management of the Fairfield by Marriott Kathmandu. The NHG is a group company of the MS Group, one of Nepal’s leading business conglomerates.

The proposed 10-storey hotel under construction in Thamel will have 108 rooms and is spread over two-and-a-half ropanis of land. “The hotel will be commercially opened by the beginning of 2016,” said Shashi Kant Agrawal, the vice-president of the MS Group.

“Around Rs 650 million will be invested in the hotel that aims to cater to people who have Kathmandu on their travel agendas,” Agrawal said. “We also hope to attract additional demand for tourism in Nepal by offering the branded, quality and consistent hospitality excellence that the Fairfield by Marriott brand offers.”
With 700 Fairfield properties throughout North America, the Marriott International is continuing to expand into Asia and South America.

Marriott International is a leading lodging company based in Bethesda, Maryland, USA, with more than 3,800 properties in 74 countries and territories. It reported revenues of nearly $12 billion in the fiscal year 2012. The company operates and franchises hotels and licenses vacation ownership resorts under 18 brands.

Marriott International’s president and managing director, Asia, Simon Cooper, said, “We are delighted to have signed this new Fairfield hotel in Nepal with Nepal Hospitality Group. We have redesigned and configured the brand specifically for the South Asia market and we are excited that this will be our first hotel in Nepal when it opens in the beginning of 2016.”

The MS Group is also planning to open a five-star property in Naxal, Kathmandu. “We have acquired land for this,” said Agrawal, adding that the company gradually plans to make its presence felt outside the capital city.

A non-resident Nepali, Shesh Ghale, is also building a five-star hotel in Kathmandu. The property will be known as the Sheraton Kathmandu Hotel. Ghale’s MIT Group Holding Nepal recently signed an agreement with Starwood Hotels and Resort Worldwide Inc and set the project rolling. Slated to open in February 2018, the 225-room Sheraton Kathmandu Hotel will be managed by Starwood Hotels & Resorts.
Ghale, 54, is on the list of 200 wealthiest Australians with a fortune of $225 million. Ghale had said that he would invest AUS$ 75-80 million in the hotel. The Sheraton Kathmandu Hotel will be located near Kantipath.

The Sheraton Kathmandu Hotel marks the re-entry of the Sheraton brand in Nepal. It had earlier managed Hotel Everest as the Hotel Everest Sheraton in the 1980s. After Hyatt Regency, no other international hotel chain has come to Nepal.

In recent years, luxury hotels have also been established elsewhere in the country, mainly in Pokhara, Bhairahawa, Lumbini and Nepalgunj.

These investments make huge business sense as there is optimism in the hospitality industry after the record number of tourist arrivals in 2010. “We have planned investing in the hospitality sector as we see huge prospects in the near future, although the investment environment has not been so far good at present,” Agrawal said.

Source: ekantipur, 31st May 2013
You may also like:
Minimum Wage of Nepal is highest in South Asia

Read More

Global IME Bank to merge again

KATHMANDU, NEPAL

Global IME Bank has geared up for another merger — this time with Gulmi Bikas Bank.

The class ‘A’ bank signed a memorandum of understanding (MoU) with Gulmi Bikas Bank on Tuesday. Two weeks back, Global IME Bank and Social Development Bank had signed a MoU for their merger.

Global IME Bank was formed last year following a merger between commercial bank — Global Bank — and two finance companies — IME Financial Institution and Lord Buddha Finance.

After the completion of the current merger process, Social Development Bank will be the fourth entity to get merged with Global IME Bank, while Gulmi Bikas Bank will be the fifth.

At present, Global has a paid up capital of Rs 2.25 billion and has been able to earn Rs 361 million as profit in the third quarter of the current fiscal year. After the merger with Gulmi Bikas Bank, its paid up capital will increase to Rs 2.5 billion, excluding Social Development Bank.

Gulmi Bikas Bank that had started operations in September 2007, has a paid up capital of Rs 25 million. It had earned a profit of Rs 932,070 in the third quarter of the current fiscal year. However, Social Development Bank that started operations in 2010 October, has been struggling for some time.

Following signing of MoU, Global IME Bank’s share trading has been suspended by Nepal Stock Exchange until the conclusion of the merger. Gulmi Bikas Bank, that has 250,000 units of ordinary shares listed at Nepse, will also be suspended for the time being. Its shares were last traded at Rs 141 per unit.

Source: The Himalayan Times, 30th May 2013
You may also like:
Banks increase interest rates on institutional deposits 

Read More

Banks increase interest rates on institutional deposits

KATHMANDU, NEPAL

Interest rates on institutional deposits are continuing to go up as liquidity shortage triggered by government´s lower capital spending has compelled some commercial banks to quote higher prices to maintain regulatory credit to deposit ratio.

However, some bankers say this is a short term phenomenon and rates will come down once the new financial year begins. As per information obtained by Republica, commercial banks are currently offering over 11 percent interest on institutional deposits -- money parked by companies in banks -- from around 9.5 percent one and half months ago.

Some of the banks that are offering higher interest rates include established institutions like Nepal Investment, Himalayan and Bank of Kathmandu.
One of the reasons why few commercial banks are paying more on deposits is the central bank´s provision that makes it mandatory to maintain a credit to core-capital-cum-deposit (CCD) ratio of 80 percent.

Since this provision bars banks from extending loan of more than Rs 80 from every Rs 100 collected as deposits, some of them are now trying to attract as much deposit to maintain the ratio.

In the third quarter ended April 13, average CCD ratio of commercial banks stood at two-year high of 75 percent.
The last time when CCD ratio had hovered at this level was in the third quarter of financial year 2010/11. Since then quarterly CCD ratio has moved in a band of 68 percent to 74 percent.

“Yes, many commercial banks are maintaining tight CCD ratio. This is because of liquidity shortage,” Ajay Shrestha, CEO of Bank of Kathmandu, told Republica. Krishna Prasad Sharma, CEO of state-owned Rastriya Banijya Bank (RBB), also held the same view.

A look into unaudited third-quarter financial results of commercial banks shows that at least 10 commercial banks are maintaining CCD ratio of over 78 percent, with CCD ratio of Nepal SBI Bank and Mega Bank standing at 79.89 percent and 79.34 percent, respectively. The CCD ratio of state-run Agricultural Development Bank has even crossed the regulatory limit and spiked to 81.33 percent.

Such a situation means these banks either have to completely stop extending loans or lure more deposits to be able to provide credit to customers.
“We are facing this situation because of lower capital spending of the government (expenditure made on development activities like infrastructure building),” Shrestha said. “This, in turn, was the result of failure to introduce full budget on time.”

He held the view that whenever the government fails to introduce budget on time the country faces liquidity shortage.

“For instance, during fiscal year 2010/11, when budget announcement was delayed the country faced liquidity crisis. A year later, when the full budget was introduced on time, the banking sector witnessed liquidity surplus. Now, many banks are reeling under liquidity stress because of failure to introduce a full budget on time,” Shrestha said.

The government failed to introduce a full budget this fiscal year due to differences between political parties during the rule of Babu Ram Bhattarai-led government. Although a full budget was introduced on April 9 following collapse of the Bhattarai-led government, it was already too late.
This, on one hand, hampered capital spending of the government -- the largest spender in the country -- while, on the other hand, flooded government´s coffers with cash due to surge in revenue collection.

The government´s treasury currently holds cash of over Rs 50 billion, while capital spending in the first 10 ten months of the current fiscal year stood at around Rs 22.49 billion -- around 34 percent of the total budget of Rs 66.1 billion allocated for capital expenditure this fiscal year.

Since the Ministry of Finance is not expecting surge in capital spending in the remaining one and half months of this fiscal year, it is almost certain money allocated by the government for development activities will not be fully utilized.

Many say lower capital spending coupled with piling of more cash in the government´s treasury at the end of the fiscal year -- due to payment of last installment of income taxes by companies -- will be a double whammy for banks.

“But we are hopeful of the government launching full budget on time for the next fiscal year. So situation will change within one and half months, as at around that time remittances for Dashain festival will gradually start to enter the country,” Shrestha said.

RBB´s Sharma is also hopeful of fall in institutional deposit rates as “there is not much demand for loans at the moment”.

Source: myrepublica, 29th May 2013
You may also like:
 

Read More

Minimum wage of Nepal is highest in South Asia

KATHMANDU, NEPAL

The minimum wage in Nepal as agreed by the employers and trade unionists on Monday is the highest in South Asia. Though Nepal’s minimum wage was the highest in South Asia until two years ago, it had dropped to third after Sri Lanka and the state of Uttar Pradesh in India raised theirs above Nepal’s. The average minimum monthly salary of India at US$ 47 still was lower than that in Nepal.

Entrepreneurs believe that the problem of scarcity of workers in Nepal will decrease after the salary hike. “Our minimum wage has become the highest in South Asia and we hope that it will solve the problem of lack of workers to some extent,” Vice President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pashupati Murarka stated. “We also hope that flight of workforce will be stopped as we have also significantly raised the daily wage along with the minimum monthly salary,” he added. The Nepali wage rate will be the highest in South Asia if the agreement to provide at least Rs 8,000 a month to workers at the industrial enterprises is implemented. It will be implemented once the government publishes it in the Nepal Gazette. Nepal’s minimum monthly salary as agreed will be US$ 90.23 while that in Uttar Pradesh, India is US$ 88 and Bihar is US$ 70.

Sri Lanka pays the highest in this region after Nepal at US$ 77, according to the International Labor Organization (ILO), while that in Pakistan is US$ 70. Indian workers do not want to come to Nepal to work despite higher wages here due to social security programs there. The trend of workers from Uttar Pradesh and Bihar coming even to Kathmandu has stopped in the past few years due to the rising wages there. Entrepreneurs claimed that the Indian workers can now be attracted as the minimum daily wage has been increased to Rs 318 from Rs 230. “We have only agreed on minimum wages. But the workers will benefit as those getting a higher salary previously will also not see their pay reduced,” he added.

Ball in workers’ court
The entrepreneurs have agreed for a greater hike in minimum salary than the Nepal Rastra Bank’s (NRB) inflation data despite taking it as benchmark and have agreed for a rise of over 29 percent despite the NRB data putting the cumulative inflation in the past two years at just 19 percent. Murarka, who is also the chairman of FNCCI’s Employers’ Council said that the entrepreneurs have exercised maximum flexibility to address the rising inflation and flight of workforce. “We have agreed for a 29 percent hike after compromising on a lot of issues. The ball is in the court of trade unionists now,” he stated. Entrepreneurs believe that the agreement reached this year will not be disputed as the previous one as the agreement has been reached in mediation of the government this time.

Minimum Monthly Salary
Country                                  in US$
Nepal                                     90
Sri Lanka                               77
Bangladesh                          38
Pakistan                                70
Uttar Pradesh (India)           88
Bihar (India)                          70

Source: Karobar Daily, 28th May 2013
You may also like:
Riddhi Siddhi Jewellers and Geetanjali cheating customers

Read More

MInimum Wage in Nepal increased to Rs.8,000 per month

KATHMANDU, NEPAL

After one-and-a-half month-long negotiations, a tripartite committee consisting employers, trade unions and the government on Monday agreed to increase the minimum monthly salary of workers by Rs 1,800.

After Monday’s agreement, workers’ basic monthly salary has been increased by 43.66 percent, dearness allowance by 9.44 percent and daily wage by 37.66 percent. “Overall, workers’ minimum monthly wages has been increased by 29 percent,” said Bishnu Rimal, president of the General Federation of Nepalese Trade Unions (GEFONT).

Now, industrial workers will get a minimum monthly salary of Rs 8,000 — a basic salary of Rs 5,100 a month and dearness allowance of Rs 2,900. Earlier, the basic salary was Rs 3,550, while the dearness allowance was 2,650.

The Minimum Wage Determination Committee has recommended the new wage structure to the government for its final approval.

In the negotiations, the trade unions were represented by the Joint Trade Union Coordination Centre (JTUCC), a common forum of 11 trade unions.

“The Minimum Wage Determination committee decided to this effect on Monday. The board will recommend the new wage structure to the Labour Ministry,” said Krishna Hari Puskar, director general of the Department of Labour. According to Puskar, the government is planning to implement the new wage structure within a week by publishing it in the Nepal Gazette.

The pay structure was last revised in March 2011 and was hiked to Rs 6,200 per month. Similarly, Rs 281 and Rs 158 had been fixed as the daily wage for agriculture workers and workers at tea estates, respectively. As per the Labour Act 1992, workers’ minimum salary is reviewed every two years. In Monday’s agreement, employers and trade unions have agreed to give continuity to the agreement on social security. “We have agreed that the Social Security Act should be brought through an ordinance and should be implemented,” said Rimal.

Manish Agrawal, vice-chairman of the Employers’ Council at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said the new salary structure will be implemented in those enterprises where salary is below the limit.

With the agreement, trade unions said they will start collective bargaining agreement (CBA) with enterprises making common negotiation committee.

Interestingly, the agreement on new wage structure has been reached at a time when a trade union affiliated to Mohan Baidya-led CPN-Maoist is still protesting demanding its inclusion in the wage review negotiation process. Accusing the government of excluding it from the wage hike talks, the Nepal Revolution Trade Union Federation (ANRTUF) had launched a protest programme from May 15. On Friday, the ANRTUF organised a one-hour long sit-in on the premises of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). It has demanded the minimum monthly wage be fixed at Rs 15,000 and daily wage at Rs 700.

Source: ekantipur 28th May 2013
You may also like:
Massive increase in internet users in Nepal

Read More

Nepali Business Delegation leave for Egypt to Boost Trade Ties

KATHMANDU, NEPAL

To increase trade activities an 18-member business delegation led by the senior vice president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Bhaskar Raj Rajkarnikar has left for Cairo, Egypt.

The three-day official visit arranged by Nepali embassy in Cairo will focus on increasing trade and bilateral relationships between Nepal and Egypt. The FNCCI team will meet representatives of Cairo Chamber of Commerce, on Monday, it said, adding that the team will also attend a programme to be organised by Federation of Chamber of Industry and Businessman’s Association the same day. Similarly, representatives of Federation of Egyptian Chamber of Commerce will hold bilateral trade talks with the FNCCI team on May 28.

The talks will be mostly focused on bringing foreign direct investment in the country in sectors like infrastructure development, energy generation, commercial agriculture, tourism and service sector, FNCCI said.
  
Source: The Himalayan Times, 27th May 2013
You may also like:
Nepal Foreign Reserves Rises to over Rs.474 billion 

Read More