Chinese Acquiring Nepali Hotels
While the arrival of Chinese tourists is growing in Nepal, a number of Chinese nationals have acquired more than a dozen of sick star-rated hotels in Kathmandu under lease, rent or management contract.
Confirming the news, Prakash Shrestha, the president of Hotel Association of Nepal, said the Association is studying the impact of Chinese entry in the country’s hotel business.
Among the hotels in the Chinese hands is Hotel Nepa International which is now named Hotel Beijing. The other hotels are Hotel Centre Point, Hotel New Gajur, Hotel Manang, Hotel Siddhartha, Hotel Pyramid, Hotel ‘Lai Lai, Hotel Star, Hotel Marshyangdi Mandala and Hotel Guangzhou.
Meanwhile, some Chinese nationals are reported to be trying to acquire hotels also in Pokhara and Lumbini.
In the year 2007 till July end, 7,342 Chinese tourists arrived in Nepal recording a 120 percent growth as compared to the same period previous year. Three years ago, the Chinese government had included Nepal in the list of favoured destinations for the Chinese nationals to go as tourists. Since last year, China Southern Airlines started flying to Nepal and now the Nepal government is reported to be preparing to revise the air traffic agreement with China.
Koreans Interested to Invest in Nepal's Hydropower
Korea Electric Power Corporation (KEPCO) is learnt to be exploring opportunity to invest in the development of Nepal's hydropower sector.
Recently, a group of company officials led by its director Choi Byong Ill visited Nepal and inspected Mid-Marshangdi and Modi hydropower projects where the construction works are going on.
They also met the Finance Minister and expressed interest to work with Nepal Electricity Authority to develop 50 MW project initially and later 300-400 MW project.
Industrialist Rabi Bhakta Shrestha too is learnt to be interested to partner with the Koreans.
Govt to Sell ADB/N Shares
The government has decided to sell 1.25 million units of shares in the loss making Agriculture Development Bank Ltd. (ADB/N) to the members of agricultural cooperatives at a par value of Rs 100. Ace Finance Ltd. is already appointed the issue manager for this purpose. This is said to be the first part of the process to sell 30 percent (Rs. 2.50 billion) stake in the bank to the general people.
Eligible to apply for these 1.25 million shares are about 650,000 people who have bought at least one share in the bank under a rule till six years ago that required every borrower of Rs. 10,000 or more to buy at least one share in the bank. According to the decision, these eligible people have to buy at least 30 units of shares including the one they already hold in the bank.
In the second phase, the bank is planning to sell shares to the employees of the bank though the number of shares and modalities for such sell are yet to be decided.
Wide Reforms Proposed in Stock Exchange
Nepal Stock Exchange Ltd. (NEPSE) has unveiled an ambitious programme to bring about a number of reforms.
According to a press release from NEPSE, the transaction in the trading floor will be computerized beginning mid-August under a Local Area Network (LAN) technology and the same will be expanded this year to Wide Area Network (WAN). With this, it will be possible for transaction from the offices of the member brokers. That is to be followed by development of client support software needed for fully internet-based transaction. This will enable the investors to key in their sales or purchase orders from any location in the world.
In this connection, NEPSE has also announced a programme to develop the Central Depository System (CDS) needed for paperless transaction.
Moreover, NEPSE is going to calculate and publish new NEPSE index based on freely floating shares replacing the existing index which is based on the total number of scrips listed. The need for the new index was being felt for a long period as the existing index fails to measure the market momentum since almost 70 percent of the listed shares are owned by the promoters of the companies and they are not available for trade in the market.
In another important announcement, NEPSE has promised to start derivatives market this year beginning with trading on the ‘right’ to buy right shares issued by the companies. However, the NEPSE press release is silent about when trading on derivatives like futures and options are to start.
Similarly, NEPSE has also promised to start over-the-counter (OTC) market from this year itself for trading on the securities that are delisted from the stock exchange or are not eligible to be listed.
In another proposed reform, NEPSE is going to create necessary infrastructure to allow non-resident Nepalis and foreign institutional investors to invest in the secondary market.
Likewise, NEPSE is also going to recommend for increase in the number of licenced brokers as after the floor automation, there will be a space to accommodate 50 brokers. After the implementation of WAN technology, it will be possible to allow open entry and open exit to the brokers, says the press release.
Six Life Insurance Companies Registered
During the last one month, six new insurance companies have registered with the Company Registrar’s Office. The country at present has five life and 17 non-life insurance companies.
Among the promoters of the new life insurance companies are major business houses like Khetan and Dugar. Prime Life Insurance Company being promoted by Khetan Group is to have Rs. 200 million as paid up capital while Gurans life Insurance Company being promoted by Dugar Groups will have Rs. 150 million as the paid up capital.
Similarly, Citizens Life Insurance Company being promoted by Pradeep Jung Pandey, Surendra Bahadur Basnet, Bind Raj Gyawali and among others will have Rs. 25 million as the paid up capital.
Other newly registered life insurance companies include Star Life Insurance (paid up capital 120 million), Sanima Life Insurance (paid up capital Rs. 80 million) and Surya Life Insurance (paid up capital Rs. 175 million).
Three more Commercial Banks on the Offing
Three new commercial banks are learnt to be preparing for opening shutters very soon. Among them, Prime Bank has already received he letter of intent from the central bank while Federal Bank and Sunrise Bank are expecting to get the letter very soon. All the three banks are being promoted by major business houses and will have Rs. 1000 million each as initial paid up capital.
Sunrise Bank is being promoted by Motilal Dugar Group with 24 percent stake while the other promoters include Srawan Goyal, Dr. Bhojendra Sharma, Shiv Ratan Sarda, Baccha Raj Tater, Jyoti Kumar Begani and Niranjan Lal Khetan.
Similarly, Federal Bank is being promoted by Shatish More, Trilok Agrawal, Govind Shanghai and Krishna Prasad Adhikari among others, while Prime Bank is being promoted by Narendra Bajracharya and a group of other nearly 300 people.
