Forget CA revival, Prez tells parties

THE HIMALAYAN TIMES, MONDAY, OCTOBER 29, 2012 www.thehimalayantimes.com
BUSINESS
• BIZ BRIEFS
HK’s realty plans
HONG KONG: Hong Kong announced
Friday it will raise real-estate
purchasing and resale costs to
cool its overheating property market
down, in a move targeting non-local
buyers and speculative activities. The
prices of small and medium sized
residential flats in the southern Chinese
city, famous for its sky-high rent,
surged 20 per cent for the first nine
months of the year, prompting the
government to take action. The new
measures include the increase of special
stamp duties for properties resold
within the first three years of its
purchase and imposing an extra 15
per cent transaction cost on non-local
buyers and local and foreign companies.
The measures ‘targets speculative
activities, and for most genuine
homebuyers it would not affect them
because they won’t be reselling in a
short period of time’. —AFP
Samsung profit up
SEOUL: South Korean technology
powerhouse Samsung Electronics Co
posted a fourth straight record quarterly
profit - of $7.4 billion - with
strong sales of its Galaxy range of
phones masking sharply lower sales
of memory chips. The record run,
though, is likely to end in December,
with profit growth slowing even more
next year as TV markets stagnate and
growth in high-end smartphones
eases from the recent breakneck
speed. Profit is expected to grow 16
per cent next year, down from a forecast
73 per cent this year. Samsung
said July-September operating profit
almost doubled to 8.12 trillion won,
in line with its earlier estimate. Net
profit rose to 6.56 trillion won. —AFP
Australia’s new rating
SYDNEY: Australian treasurer Wayne
Swan welcomed a decision by ratings
agency Fitch to affirm the country’s
AAA credit rating, days after his midyear
economic review lowered this
year’s growth forecast. The affirmation
overnight of the AAA rating with
a stable outlook comes after the government
last week cut its growth and
budget surplus forecasts as worsening
global conditions hurt revenues
in the mining-driven economy. “We
manage our economy in the interests
of working people and we’ve had a
big tick from the rating agencies
overnight,” said Swan. —AFP
HUL beats forecasts
MUMBAI: Consumer goods giant
Hindustan Unilever (HUL), Indian
unit of Anglo-Dutch Unilever, on Friday
reported an above-expected rise
in quarterly profit. HUL, which is India’s
largest consumer goods maker,
posted a 17 per cent rise in net profit
at IRs 8.07 billion ($152 million) in the
three months to September, compared
to IRs 6.89 billion a year earlier.
Sales rose 12 per cent to IRs 61.55 billion
rupees. HUL’s earnings beat market
expectations of a 7.7-billion-rupee
profit. Its personal care business
rose in quarter by 12 per cent yearon-year,
while soaps and detergents
jumped 22 per cent. Its food products
segment grew 10 per cent in the quarter
from a year earlier. —AFP
• FOREX RATES
The foreign exchange rates for October 29 as fixed by Nepal Rastra Bank are as follows:
CURRENCY UNIT BUYING (in Rs.) SELLING (in Rs.)
Swiss Franc 1 91.34 91.98
Australian Dollar 1 88.60 89.22
Canadian Dollar 1 85.60 86.20
Singapore Dollar 1 69.89 70.39
Saudi Arab Riyal 1 22.77 22.93
Qatari Riyal 1 23.45 23.62
Thai Bhat 1 2.78 2.80
UAE Dihram 1 23.25 23.41
Malaysian Ringit 1 28.09 28.29
Swedish Krona 1 12.76
Danish Krona 1 14.81
Hongkong Dollar 1 11.02
Note: Under the present system the open market exchange rates quoted by
different /commercial banks may differ.
Himalayan News Service
Kathmandu, October 28
In the first half of 2012, global
FDI fell by eight per cent to
an estimated $668 billion,
down from $729 billion in
first half of 2011, according
to UNCTAD’s FDI Global
Quarterly Index.
South Asia witnessed a fall
by 40 per cent in its FDI inflows
as a result of declines
across nearly all countries in
the subcontinent. Inflows to
India, which accounts for the
lion’s share of inward FDI to
the sub-region, fell from $18
billion to $10 billion, partly
as a result of shrinking market-seeking
FDI to the country.
Strong interest by foreign
investors in manufacturing,
especially in garments,
helped keep FDI inflows to
Bangladesh at a relatively
high level — about $430 million
in the first two quarters.
It was due to increased uncertainty
in the global economy,
marked by fears of an
exacerbation of the sovereign
debt crisis in Europe
and a slow down of growth in
major emerging market
economies, it said, adding
that in the second quarter of
2012 the value of index,
which tracks FDI flows,
dropped from 128 to 123.
The $61 billion fall was
mainly caused by a decline
of $37 billion in inflows to
the US and a $23 billion fall
in inflows to BRIC — Brazil,
Russian Federation, India
and China — countries.
The declines were caused
by steep falls in both greenfield
investment projects
(down by 40 per cent) and
cross-border Merger and Ac-
Value of shares appreciates
Himalayan News Service
Kathmandu, October 28
The value of shares with investors
has appreciated by more than one
third of its value in the last six
months due to a surge in stock market
capitalisation.
Nepal Stock Exchange (Nepse)’s
market capitalisation surged by 36
per cent since mid-April 2012. The
stock market capitalisation, that
stood at Rs 302 billion in mid-April,
has reached Rs 413.5 billion by
October 27.
The surge in market capitalisation
has also been accompanied by the
bullish benchmark index that also
scaled by 36 per cent during the
review period.
On April 12, the Nepse index
stood at 319.94 points, which kept
travelling north on positive political
cue, reaching 425.46 points in the
next two weeks. Though the ascent
did not continue at the same rate in
the following weeks, the benchmark
index though has not disappointed
investors.
“Investors who entered the market
before mid-April 2012 have benefited
a lot as the index was hovering
around 300 points then, and it will
not go back to that level in the near
future,” said general secretary of
Nepal Stock Investors’ Association
Prakash Rajaure.
The waxing size of market capitalisation
has upgraded the asset values
of shareholders. However, in the
last two and a half years, plunging
share prices had caused the market
capitalisation of listed companies to
decline by more than 25 per cent.
Market capitalisation is the total val-
Chocolate
conquers new
worlds
Agence France Presse
Paris, October 28
History is coming full circle: borrowed
from the Aztecs four centuries
ago, perfected for the palate
by the Europeans, chocolate is conquering
new worlds, with sales
booming from Asia to Brazil.
Every second, 95 tonnes of chocolate
are wolfed down around the
world, or three million tonnes a year,
according to figures supplied by the
annual Salon du Chocolat fair,
which kicks off Wednesday in Paris.
The globalisation of chocolate is
most striking in Japan, where annual
sales are soaring by 25 per cent and
French chocolatiers are feted like
stars while their Japanese counterparts
now rank among the world’s
best. For the Salon’s annual fashion
show featuring life-sized chocolate
dresses, this year’s model is a kimono-inspired
number created by
French chocolatier Frederic Cassel
— who has three stores in Japan.
The 15-kilo edible dress — a
month in the making — will be
slipped on just moments before the
show, lest it should melt under the
spotlights. Afterwards, it will be
shipped straight to Japan.
According to Jacques Pessis, president
of the highly serious Chocolate
Crunchers’ Club which each year rewards
the best world chocolates,
France and Japan are the current
masters of the game. Japan aside,
chocolate sales are also growing 30
percent year on year in China, while
in India — even though one in two
Indians have never tasted chocolate
— growth is 20 per cent.
Six multinational firms together
account for 85 per cent of the vast
market: Hershey, Mars, Philip Morris,
Nestle, Cadbury and Ferrero.
quisitions (M&As) transactions
(down by 60 per cent),
which are also visible in
the reduced importance of
the equity component of FDI
inflows.
The fact that the overall
decline remains limited to
downfall by eight per cent reflects
the stable reinvested
earnings component of
FDI, indicating that transnational
companies’ (TNCs)
earnings overseas continued
to be strong.
Developing countries —
without transition
economies — for the first
time absorbed half of global
FDI inflows due to the steep
fall in flows to the US and a
moderate decline in flows to
the EU. Despite a decline in
FDI inflows, China became
the world’s largest recipient
in the first half of 2012.
ue of the shares of the stock market.
Investors were attracted towards
the secondary market mostly due to
the availability of lucrative shares at
historically low prices of companies
such as Nepal Telecom, Chilime Hydropower,
Bank of Kathmandu,
Everest Bank, Nabil Bank, and Standard
Chartered among others.
The performance of class ‘A’ companies
as shown by the sensitive index
has also appreciated by 33 per
cent. In mid-April, the sensitive index
stood at 84.5 points, which is
now at 112 points.
FDI flows showed an uneven
pattern among regions.
In developing economies,
while flows to developing
Asia declined, those to Latin
America and Africa rose.
In developed countries,
the rise in flows to Europe —
in spite of a fall in flows to the
European Union and other
developed countries — was
not enough to compensate
for the decline in flows to
North America. Compared
to the full-year forecast of
FDI inflows published in
July, UNCTAD now projects
| SECONDARY MARKET MOVEMENT |
Earlier, the higher interest rates
being offered by banks used to be
blamed for taking away investors
from the stock market. But now as
banks are offering less than eight
per cent interest on fixed deposits,
investors are returning once again
to stock investing due to relatively
increased returns.
“If the lending rate of banks for
share purchase loans becomes more
reasonable then the market will further
go up,” pointed out Rajaure. At
present, banks are providing share
purchase loans or margin type lend-
that FDI flows will, at best,
level-off in 2012 at slightly
below $1.6 trillion.
The slow and bumpy recovery
of the global economy,
weak global demand
and elevated risks related to
regulatory policy changes
continue to reinforce the
wait-and-see attitude of
many TNCs toward investment
abroad.
In the first half of 2012, developing
and transition
economies continued to absorb
more than half of global
FDI flows. For the first time,
(Figures of Nepse in points and market capitalisation in billion rupees. Source: Nepse)
ing at an interest rate that is higher
than 14 per cent.
In the last six months, the number
of listed companies has gone up to
225 from 215. The number of shares
listed has increased to 1.6 billion
units from 1.2 billion units six
months ago.
The increased number of shares
listing at Nepal Stock Exchange has
also contributed in a surge in market
capitalisation as it is calculated
by multiplying a company’s shares
outstanding by the current market
price of one share.
Mobile market booms in Dashain
Himalayan News Service
Kathmandu, October 28
Sales of mobile sets and accessories
increased by three times
during the Dashain festival, according
to the Mobile Traders Association
of Nepal.
“Normal sales of mobile sets is
around 3,000 to 4,000 per day during
normal times,” president of
association Purushottam Basnet
said, adding that sales increased
to around 10,000 to 12,000 every
day when consumers started their
Dashain shopping.
The sales of smartphones remarkably
went up this year, as
compared to earlier years, he informed.
“The preliminary data
collected by the association has
revealed that Samsung and Color
brands of mobiles are on the top
of the list according to consumers’
choice.”
There are a total of 25 brands of
mobile sets in the Nepali market,
according to Basnet. The annual
turnover of the mobile business is
around Rs 13 billion, he said,
adding that the trade volume is
expected to go up this year due to
the popularity of smartphones.
The mobile handset market has
been growing by 20 per cent to 25
per cent annually, according to
the association. The domestic
market, according to traders, consumes
approximately 1.5 million
handsets annually.
The trade volume of mobile
sets will witness a steep rise for
some more years due to increasing
mobile penetration rate, according
to traders. The telephone
penetration rate in the country
has reached 64.91 per cent until
mid-July, according to telecom
regulator Nepal Telecommunications
Authority (NTA).
Out of total 17.28 million telephone
users, 15.33 million consumers
have access to mobile
phones including Global System
for Mobile Communication, and
Code Division Multiple Access,
according to NTA. Number of
users has been growing every
month, creating a lot of opportunities
for mobile traders and companies,
said the association.
“However, consumers’ selectivity
and choice in buying mobile
sets have also increased in recent
days,” Basnet said, adding sales of
branded sets and smartphones
not only help increase the quality
of the consumers but also boosts
the revenue.
Foreign direct investment flows retreat in first half of 2012: UNCTAD
Global FDI fell by eight per cent to an estimated $668 billion,down from $729 billion in the first half of 2011
Developing countries — without transition
economies — for the first time absorbed half of
global FDI inflows
developing economies alone
accounted for a half of the
global total.
“Investment leads economic
growth but the current
trends of investment
flows to developing countries,
particularly to Asia,
are worrisome and the challenge
for channeling FDI
into key development
sectors such as infrastructure,
agriculture and the
green economy remains
daunting” said secretarygeneral
of UNCTAD Supachai
Panitchpakdi.
Despite a slight decline in
FDI inflows, China became
the largest recipient country
in the first half of 2012, followed
by the US. However,
early indications show that
FDI flows to the US might
be stronger in the second
half of 2012.
The value of cross-border
M&As in the third quarter
of 2012 were double those of
the first half of the year, while
some further acquisitions
are already taking place
or announced in the fourth
quarter.
FDI flows fell to the BRICs
as a whole and to each of individual
country within the
group. In the first half of
2012, FDI inflows declined
by 11 per cent in developing
Asia, despite a strong recovery
after the global financial
crisis. It reflects a protracted
period of weak external demand
with consequent
strongly negative effects on
exports and increasing uncertainty
about high-growth
emerging countries, the
UNCTAD said, adding that
as a result of declines in China
and Hong Kong (China),
PAGE 11
Churi has
huge potential
Himalayan News Service
Kathmandu, October 28
Churi — a fruit berry that is found in the
hilly districts of Nepal — can generate
employment for around 150,000 people
if the government can help boost its development.
“Around 50 districts have
Churi,” according to national programme
manager of Micro Enterprise
Development Programme (MEDEP) Dr
Lakshman Pun.
Aesandra butyracea or popularly
known as Churi in Nepal can help produce
some 17,825 metric tonnes of honey,
he said, adding that at the rate of Rs
200 per kg of honey, Nepal can earn
around Rs 3.5 billion from Churi — that
flowers for three months a year — honey.
Similarly, it can also help produce
37,245 metric tonnes of butter and
herbal soap from Churi could earn the
country around Rs 26.81 billion, Pun
added. “The total employment generation
from the honey and soap production
of Churi could be around 150,000,”
he informed.
Churi is a medium sized tree native to
Nepal and is abundantly found in the
mountain areas between 300 to 2,000
msl. It can reach heights of up to 20 metres
and the seeds from Churi trees produce
fatty acid oils that are mainly used
as vegetable butter in rural areas.
According to a resource assessment of
Churi undertaken by Micro Enterprise
Development Programme, out of the 75
districts of Nepal, almost 50 districts are
known to have Churi plants.
The geographical distribution extends
from Darchula, Baitadi and Dadeldhura
districts in the far-west to Dhankuta and
Ilam districts in the east. The total number
of Churi trees in the country is estimated
at 10.8 million, according to
MEDEP. The highest number of trees (almost
40 per cent) are found in the midwestern
development region, which is
followed by far western development region.
These two regions combined account
for about 70 per cent of the total
number of trees in the country.
There are an estimated 5.6 million
Churi trees at fruit bearing stage in the
country with the potential to produce
37,245 metric tonnes of butter, the study
revealed, adding that there is a huge potential
in terms of resource availability to
produce Churi butter as well as honey.
The common method followed by micro-entrepreneurs
for Churi herbal soap
making is based on what is called the
‘Cold Process Soap Making’. Herbal soap
making is a specialised process with a
wide diversity in type of ingredients used
depending on the target markets consisting
of low end and upscale consumers.
There are various kinds of oils,
essential oils, and fragrances available
that could be combined by individual
entrepreneurs to come up with specific
products with unique characteristics.
The ferry ‘Napoleon-Bonaparte’, which manages Mediterranean sea transport shuttles, tilts to the side against a quay in France, on Sunday.
AFP / RSS
total FDI inflows to East Asia
fell by about 11 per cent.
Half-year inflows to China
amounted to $59 billion, a
three per cent decline from
$61 billion in the first half of
last year. China is experiencing
structural adjustments in
their FDI flows, including the
relocation of labour-intensive
and low-end marketoriented
FDI to neighbouring
countries.
Compared to the full-year
forecast of FDI inflows published
in July, UNCTAD now
projects that FDI flows will,
at best, level-off in 2012, at
slightly below $1.6 trillion.
UNCTAD’s longer term projections
still show a moderate
rise.
However, the risk of further
macroeconomic shocks
in 2013 can impact FDI inflows
negatively.