::: Latest Buzz on Nepalsharemarket

Thursday, November 11, 2010

NRB warns money changers of nixing license

Nepal Rastra Bank (NRB) has warned of cancelling the licenses of 100 companies involved in foreign exchange transactions for failing to show their paid up capital status and not serving customers as per the Foreign Exchange Regulation Act. The central bank warned the money changer companies, cargo companies, travel agencies and hotels and has set a deadline to fulfill their obligation on time. It found in a recent study of 200 companies involved in foreign exchange transaction that most of them do not have the amount of paid up capital that they had mentioned while registering themselves.

"We have given them a three-to-six months deadline to correct their deficiencies," said a senior NRB official. "Their licenses will be cancelled automatically if they fail to fulfil their obligation." Apart from unclear paid up capital status, the companies not displaying the exchange rate publicly, failing to ensure adequate security measures and not giving receipt while changing foreign currency have also been warned. The central bank can cancel the license as an extreme penalty, ranging from issuing warning notice if any company involved in foreign exchange transactions violates the Act.

The paid-up capital of a company is one of the main bases that the central bank considers before issuing a license to deal in foreign exchange. All companies, including banks and financial institutions are required to obtain a separate license from the central bank to conduct foreign exchange transactions. These companies given warning had shown paid up capital ranging from Rs. 1 million to Rs. 500 million on paper. Even the big hotels failed to show their paid up capital status, according to NRB officials. Banks and financial institutions examine the paid up capital of a company before loaning it money. If a company is liquidated, its liabilities are covered from the paid up capital.

The central bank's finding also indicates that many companies registered with the Office of the Company Registrar (OCR) might have no real paid up capital. OCR deputy registrar Laxman Takur said that he was unaware of the findings of the central bank. "We register the company related to foreign exchange transactions such as money changers and money transfer companies only after getting the opinion of the central bank,' he said. According to OCR, it has been registering the companies after getting clearance of paid up capital by auditors. "There is, however, no compulsion for private companies to produce evidence," said Thakur.

Source:
ekantipur

Gold close to Rs 40,000 per tola

Domestic gold market recorded a whopping jump of over Rs 1,300 per ten grams to hit new high of Rs 39,600 per tola (11.664 grams) on Tuesday as the market opened after four-day Tihar festival. Gold was priced at about Rs 38,300 per tola when the market closed for the festival on Thursday last week. The gold dealers attributed the rise to increase in international prices of the yellow metal.  

International gold price had risen to record US$ 1,414.60 per troy ounce (31.103 grams) on Tueday on the back of sliding dollar. As such economic woes instantly impel investors to switch to gold -- the safer haven -- it spurred demand causing the global prices to shoot up. However, local dealers fear that such huge rise in prices could cause sales to recoil, especially as the new wedding season is starting from November 21 and they were expecting to make a good business over the next one month.

"After long-running shortage, we had just started to witness growth in business. But the price inching close to new psychological level of Rs 40,000 per tola has dampened that prospect," said Tej Ratna 0Shakya, president of Nepal Gold and Silver Dealers Association. Dealers even anticipated the prices to jump further over the next few days adding woes to Nepali gold market that had been in tatters over the last couple of months, mainly after the government banned its import on failing to maintain higher tariff due to the lack of political understanding on the issue.

While the step was aimed at curtailing the country´s soaring trade deficit, it had caused short-supply, triggering inward smuggling of gold from India. "We had failed to meet the demand in the weeks before and after Dashain due to inadequate supply. Now when situation started to improve with Nepal Rastra Bank (NRB) auctioning out 100 kgs of gold every week, a new wave of price rise threatens to rattle customers," said Shakya.

Gold and jewelry dealers have been anticipating sales to rise by 50 percent during the upcoming wedding season. This would have soared sales volume to some 30 kgs a day. But with the price rise, they anticipate the people to recycle their old ornaments to meet their family and social obligations. "We expect the demand to plummet now," said Shakya. Dealers stated that they anticipate the recycled use to jump to 50 percent, limiting fresh sales to around 15 kgs a day. That is not all. Silver too hit new high of Rs 664.50 per ten grams (Rs 775 per tola) in the local market. The rise again is attributed to international market as silver was traded at US$ 28.16 per troy ounce, which was a 30-year high, Tuesday.

Source:
myrepublica

Bonus Share: Machhapuchhre Bank Ltd

The BOD meeting of the Machhapuchhre Bank Ltd dated Kartik 16, 2067 has decided to distribute Bonus Shares that equals to Rs. 147926960 subject to approval from AGM and Nepal Rastra Bank.

Source: 
nepalstock.com

Nepse lists over four million-unit shares in a week

Nepse added 4.1 million unit of shares including rights, ordinary and bonus of Sunrise Bank, Sahayogi Bikas Bank and Nepal Finance during the last week before the festival of Tihar. The secondary market saw 6883 transactions of 102 companies worth Rs 124.53 million that is 8.75 per cent higher than a week ago. Similarly, domination of the Class-A companies has also come down to 39.56 per cent as they saw Rs 49.2 million transation only.

However, the Nepse could not perform any better than a week ago as the Nepse gained only 0.06 point to close the market at 424.96 points from the Sunday morning's opening of 424.90 points. The sensetive index gained 0.27 point to close at 104.19 points. Commercial banks, insurance and finance sub-groups surged but hydropower and development banks lost, whereas manufacturing, hotels, and trading groups didnot witness any changes in their indices.

Merchant Finance topped the chart with the highest transation amount and share units that saw Rs 17.5 million worth trading of its 906-unit of shares. Similarly, Agriculture Development Bank Nepal topped the chart with 906 trading. Meanwhile, the year on year Nepse has declined by 35.6 per cent to 404.43 points in mid September, according to the central bank. It stood at 628.34 points in the same period last year. Similarly, sensitive index stood at 98.94 point in mid September against 160.79 points in the same period last year. The float index ¿ calculated on the basis of closing price of August 24, 2008, as base market value ¿ remained at 37.15 in mid September, a contraction of 37.8 per cent compared to same period last year. The market capitalisation also decreased by 25 per cent to Rs 330 billion in the first two months of the current fiscal year. "The ratio of market capitalisation to GDP stood at 28 per cent," the central bank said, adding that the ratio was 45.9 per cent in the same period last year. Of the total market capitalisation, bank and financial institutions stood with highest share of 71.5 per cent followed by manufacturing and processing companies (2.4 per cent), hotels (1.6 per cent), business entities (0.5 per cent), hydropower (4.8 per cent) and other economic sectors (19.3 per cent).

Total paid up capital of the listed companies stood at Rs 86.34 billion in mid September ¿ an increase of 35.6 per cent over the period of one year. This increase was largely due to the additional listing of securities. As at mid September, Nepse listed securities worth Rs 12.39 billion (ordinary share of Rs 4.62 billion, bonus share of Rs 226.5 million, right share of Rs 2.56 billion and government securities of Rs 4.99 billion). The total number of listed companies stood at 180 in mid September compared to 159 in the same period last year. Among them, 148 are banks and financial institutions (including insurance companies), followed by 18 production and processing industries, four hotels, business entities and hydropower firms each and two firms in other groups.

Source:
tht

Save the Children & Bank of Kathmandu

An agreement was signed between Save the Children and Bank of Kathmandu (BoK) on Tuesday formally to launch the YouthSave project in Nepal. Brian J Hunter, country director of Save the Children and Ajay Shrestha, CEO of BoK signed the agreement. YouthSave is a multi-country learning project to encourage low-income young people aged 12-18 in developing countries to save through formal sources for a better future. Supported by The Master Card Foundation, the project will be implemented in four countries including Nepal by a consortium of four organisations led by Save the Children. The project is being implemented in Nepal, Colombia, Kenya and Ghana from 2010 through 2014. In Nepal, Save the Children has partnered with BoK to develop and roll out a savings product across the country that will encourage engagement of low-income youth in the banking system.

Source:
tht