Bhattarai wants package deal to step down

PAGE 12 www.thehimalayantimes.com
Business
• BIZ BRIEFS
Toyota’s net profit up
AFP / RSS
A file photo shows boxes of
Heineken beer at a store in
Singapore. Heineken said on Friday
it has reached a deal to buy Asia
Pacific Breweries for $ 4.1 billion.
TOKYO: Toyota said on Friday that its
quarterly net profit skyrocketed to
$3.71 billion and it upped sales targets,
as the Japanese auto giant recovered
from last year’s quake-tsunami
disaster. The company said it earned
290.3 billion yen in the fiscal first
quarter to June, up from just 1.16 billion
yen a year ago — the first full
quarter after Japan was devastated by
the March 11 natural disasters that
dented production and demand.
Sales in the period shot up by nearly
60 per cent to 5.50 trillion yen, the automaker
said. Its operating profit
reached 353.14 billion yen, swinging
back into the black after an operating
loss of 107.96 billion yen a year ago.
The company also lifted its global
sales forecast, saying it now expected
to sell 9.76 million vehicles — up
from 9.58 million vehicles — this calendar
year, while producing a total of
10.05 million vehicles. — AFP
SilkAir places order
SINGAPORE: SilkAir, the regional
wing of Singapore Airlines (SIA), said
on Friday it would buy 54 new Boeing
planes in a deal worth $4.9 billion,
with an option to buy a further 14 aircraft.
The airline said the order is the
largest in its history and “remains
subject to the negotiation of a final
purchase agreement”. SilkAir said the
firm orders will cover 23 Boeing 737-
800s and 31 Boeing 737 MAX 8s. The
deal for the 54 aircraft is worth $4.9
billion based on Boeing’s current list
prices. The B737-800 is the best selling
variant of Boeing’s popular next
generation family of single-aisle aircraft,
and the 737 MAX is currently in
development. “Deliveries are due to
begin in 2014 and continue to 2021,
by which time the airline’s fleet will
have more than doubled in size,”
the carrier said. SilkAir currently operates
21 Airbus A319s and A320s,
with three more A320s due for delivery
by the end of 2013. It said the new
orders will cater for both growth and
fleet renewal. — AFP
RBS losses drop in Q2
EDINBURGH: Royal Bank of Scotland’s
net losses narrowed in the second
quarter, the state-rescued lender
said on Friday as it awaited the financial
consequences of its role in the Libor
rate-rigging scandal. RBS, 82-per
cent owned by the British government
after a massive bailout amid the
global the financial crisis, said losses
after tax stood at £466 million in the
April-June quarter. The Edinburghbased
bank had posted a loss after tax
of £897 million in the first quarter of
2011, the lender said in a statement.
RBS was hit in the quarter by charges
totalling £310 million partly linked to
an IT meltdown in June that left millions
of clients without access to their
accounts. It also took a hit on funds
set aside to compensate clients who
were mis-sold various products. — AFP
FOREX RATES
The foreign exchange rates for August 4 as fixed by Nepal Rastra Bank are as follows:
CURRENCY UNIT BUYING (in Rs.) SELLING (in Rs.)
Swiss Franc 1 89.93 90.54
Australian Dollar 1 92.99 93.62
Canadian Dollar 1 88.13 88.73
Singapore Dollar 1 71.01 71.49
Saudi Arab Riyal 1 23.62 23.78
Qatari Riyal 1 24.33 24.49
Thai Bhat 1 2.80 2.82
UAE Dihram 1 24.11 24.28
Malaysian Ringit 1 28.26 28.45
Swedish Krona 1 13.05
Danish Krona 1 14.52
Hong Kong Dollar 1 11.42
Note: Under the present system the open market exchange rates quoted by
different /commercial banks may differ.
Country’s first credit rating agency soon
Himalayan News Service
Kathmandu, August 3
Nepal’s first credit rating
agency — Icra Nepal — will be
able to start operations before
the month is over as the regulator
is in the final stage of
granting it a licence.
“We have finished examining
the infrastructure and set
up of Icra Nepal and will be
submitting the report by next
week,” said director of Securities
Board of Nepal (Sebon) —
the capital market regulator of
Nepal — Niraj Giri.
The regulator gives a final
Irregular
monsoon
hits paddy
plantation
Himalayan News Service
Kathmandu, August 3
The late and irregular
monsoon has affected
paddy plantation across
the country. Farmers
have not planted paddy
in more than 30 per cent
paddy fields due to insufficient
rain as of mid-
Shrawan (August 1).
Paddy plantation has
been completed in about
65 per cent fields, said
spokesperson of Ministry
of Agriculture Development
Dr Hari Dahal.
“Paddy plantation has
been affected across the
country,” he said, adding
that there is less chance
of good crops this year
due to late plantation.
Eastern terai districts,
east of Bagmati river,
have been severely affected
due to low rain.
Paddy plantation in Siraha,
Sarlahi and Dhanusha
has been completed
in only 20 per cent,
25 per cent and 58 per
cent of land, respectively.
The high rice yielding
district of Jhapa has completed
plantation on 75
per cent of land.
“It is a serious issue. It
may cause significant decrease
in the production
of the major cereal crop,”
he said. “Not a single district
has cent per cent
plantation till date.” Last
year, the country had
witnessed cultivation in
more than 85 per cent
land at this time.
The ministry has not
yet calculated the loss
arising due to the late
and irregular monsoon.
However, it said that production
will definitely
decrease due to the late
and irregular monsoon,
as well as scarcity of fertilisers.
Farmers have
been facing acute shortage
of chemical fertilisers
for the last three months.
Low plantation may
cause food insecurity in
the country and there
may be a repeat of the situation
faced three years
back. At that time, the
country had witnessed
about 17 per cent price
hike in cereal foods when
the shortfall was 332,000
metric tonnes. Similarly,
mid-western and far
western hill districts were
in the acute shortage list.
Thanks to good monsoon,
the country had a
bumper harvest last year
with more than 400,000
metric tonnes of rice in
stock. Rice production
will come down this year
as only 58 per cent land
has been planted till date
in the food basket of the
country — terai.
Productivity of rice is
also estimated to decrease
due to fertiliser
shortage. Last year, rice
productivity was 3.3 metric
tonnes per hectare,
up by 0.4 metric tonnes
from the previous year.
approval after inspecting the
infrastructure and only then
can the rating agency start operations.
“If everything is
found to be satisfactory then
the licence can be granted in
the next few weeks,” he added.
The agency had applied for
the final licence about three
months back after completing
its set up. Icra Nepal was granted
Letter of Intent to undertake
the process to start a credit
rating agency here in Nepal
by Sebon in August 2011.
India’s Icra will have 55 per
cent stake in the rating agency
while the remaining stake is
Himalayan News Service
Kathmandu, August 3
Exporters here have urged the
central bank to allow at least
one-year payback period for
refinancing facility. According
to exporters, sufficient payback
period along with proper
monitoring of commercial
banks will undoubtedly improve
the export sector within
a couple of years.
“The monetary policy this
year has certainly provided relief
to exporters with a number
of adjustments in refinancing
facility,” said president of Garment
Association — Nepal
Uday Raj Pandey. However,
the central bank should have
mentioned at least one-year
payback period for the loan allowed
to exporters under refi-
held by Credit Information Bureau,
Himalayan Infrastructure
Fund, and a few Nepali
banks. The Credit Rating
Agency Regulation 2068 states
that a Nepali credit rating
agency needs to have a minimum
of 25 per cent stake of a
foreign credit rating agency.
“We will start operations
within a fortnight of getting
the licence,” said managing director
and CEO of Icra Nepal
Dipal Kafle.
Credit rating agencies rate
the credit worthiness and financial
soundness of an entity
— individual, company or
nancing facility, he said.
According to the current
regulation, the payback period
of loans under refinancing facility
is only six months, which
is insufficient for exporters.
“The export cycle needs at
least one year to complete and
with only six months time, we
will not be able to pay back the
loans,” said Pandey.
“The monetary policy has
relaxed refinancing facility but
unless Nepal Rastra Bank provides
enough time to pay back
the loans, exporters will not be
able to take advantage of the
facility,” he said.
According to the central
bank, the refinancing facility
regulation has mentioned a
time of only six months to pay
back the loans. Therefore, it is
not in a position to allow a
country — based on their financial
indicators. The credit
ratings are supposed to be a
simple yet effective indicator
aiding the ordinary investors
to understand the risks involved
in investment process.
The agency analyses a company
based on the comparison
of a certain financial ratios
with chosen benchmarks, and
an analysis of corporate governance
along with focusing on
the legal, political and economic
environment.
In the initial phase, Icra
Nepal plans to focus on rating
firms issuing shares, bonds
one-year period for exporters.
However, exporters have
urged the central bank to allow
renewal of the loan payback
time after six months.
“The main setback in the refinancing
facility is its payback
time,” said Pandey. He also focused
on the need to review
the regulation and develop a
new one with additional payback
time for the loan payment.
Besides payback time,
the monetary policy for the
current fiscal year has taken
care of most of the issues
raised by the various exporter
associations.
The monetary policy has
also allowed exporters to receive
refinancing facility on
the basis of contract paper
and working capital. “If the
central bank allows a period of
and preference shares, as per
the regulator’s directives but
we will also rate mutual funds
and other such investment instruments
once they come
into existence, said Kafle.
According to Credit Rating
Agency Regulation 2068, companies
planning to issue ordinary
shares, bonds, debentures,
and preference shares
exceeding Rs 30 million in value
have to be rated by a rating
agency. The rating agencies
also have to continue rating a
company for the next two consecutive
years once it has rated
the concerned company.
Employees of ATEbank at a demonstration in Athens on Friday. Bank of Greece Governor George Provopoulos deflected
criticism for the breakup of state lender ATEBank, noting that the bank was 4.9 billion euros in the red and beyond salvation.
Exporters seek time to clear refinancing loans
Samsung to unveil new mobile device
Plans just weeks before the likely debut of iPhone 5
Agence France Presse
Seoul, August 3
South Korea’s Samsung
Electronics said on Friday
it would unveil a new mobile
device this month,
just weeks before the likely
debut of the iPhone 5 from
arch-rival Apple.
A spokesman for Samsung,
the world’s largest
smartphone maker, declined
to give details of the
device to be shown in
Berlin, Germany on August
29, two days before
the opening of Europe’s
largest consumer electronics
show IFA.
Analysts said it was likely
to be an upgraded version
of the Galaxy Note.
The announcement
comes as the two tech giants
are embroiled in a
major courtroom battle
in California over patents
for smartphones and
tablet computers.
Apple is seeking more
than $2.5 billion after accusing
the Korean firm of
infringing designs and
other patents. Samsung
denies this and countercharges
that Apple infringed
its patents for
wireless communication.
The rivals have
launched dozens of legal
actions against each other
in 10 countries worldwide.
The Note, which has a
5.3-inch (13.5 centimetre)
screen larger than a
smartphone but smaller
than a tablet, is positioned
one year under the refinancing
facility, the export sector
will pick up within two years,”
said Pandey.
Though the central bank
had brought the refinancing
facility about four years back,
the facility remained unused
due to ineffective policy and
lack of enthusiasm among the
commercial banks to allow refinancing
facility to exporters
at the interest rate fixed by the
central bank.
The loan floated to export
industries, sick industries, and
cottage and small industries
will be refinanced by Nepal
Rastra Bank at 1.5 per cent interest
rate, states the monetary
policy. The financial institutions
can charge up to 4.5
per cent interest for these
loans at maximum.
between the firm’s flagship
Android-equipped
Galaxy smartphone and
Galaxy Tab. “It’s highly
likely to be Galaxy Note 2,”
said Greg Roh, senior analyst
from HMC Securities
Investment, commenting
on the device to be unveiled
in Berlin.
But he said he did not
see a particular correlation
between the launch
and the release date of the
iPhone 5, widely expected
in September or October.
“I think Samsung is trying
to maintain its reputation
as number one
smartphone company
with a public image that
they always have something
to show to consumers,
and that they carry
out what they’ve
promised to show.”
Market researcher Strategy
Analytics said last
week Samsung increased
its share of the global
smartphone market in the
second quarter to 34.6 per
cent, compared with 17.8
per cent for Apple.
THE HIMALAYAN TIMES, SATURDAY, AUGUST 4, 2012
AFP / RSS
Agence France Presse
New Delhi, August 3
Australian
opposition
eyes FDI
scrutiny
Agence France Presse
Sydney, August 3
Australia’s conservative opposition
today earmarked
tighter scrutiny of foreign investment
in agriculture as a
priority if the party is elected
to government next year, as
recent polls suggest.
Rural conservative politicians
have warned against
selling valuable agricultural
land to foreign investors,
particularly China which is
its top trading partner due to
bullish exports of resources.
Opposition leader Tony
Abbott said while he welcomed
foreign investment,
Australia needed to improve
oversight when it came to
farmland and agribusiness.
“I want to make it absolutely
crystal clear that the
(opposition) coalition unambiguously
supports foreign
investment in Australia,”
Abbott said as the
party released a policy paper
on the subject. “We need it,
we want it, it is essential for
our continued national prosperity.
“What’s very important
though is that the public
have confidence that the foreign
investment we need
and want is in Australia’s national
interest.
“All we are saying with this
paper is there needs to be a
sufficient level of scrutiny.”
The paper called for the
Foreign Investment Review
Board to consider any proposed
foreign acquisition of
agricultural land valued at
more than Aus$15 million
($15.7 million). It also demands
any proposed foreign
purchase of an agribusiness
of more than Aus$53 million
be scrutinised and argues for
a national registrar of ownership
of farmland.
It notes “growing community
and industry concern
that some types of acquisitions
may be contrary to the
national interest and that a
strengthening of the regime
may be advantageous to the
long-term prosperity and
food security of Australia”.
A government study into
ownership of Australian agriculture
in January found that
foreign firms controlled
about half of the nation’s key
food industries but offshore
investors owned just 11 per
cent of its farmland.
The opposition paper follows
a speech by Abbott in
China last month in which
he said it would rarely be in
the national interest to allow
a foreign government to control
an Australian business.
India’s car makers
post mixed sales
India’s largest passenger carmaker Maruti
Suzuki, struggling to recover from a deadly
labour unrest problem at one of its plants,
posted a nine per cent rise in monthly sales.
Its rivals showed mostly weak sales, amid
hefty taxes, elevated fuel prices and stubborn
inflation that has kept interest rates high,
pushing up the cost of vehicle loans.
Maruti Suzuki India, majority-owned by
Japan’s Suzuki Motor Corp, said passenger
car sales in July rose by 9.2 per cent to 82,234
vehicles thanks to a low base effect from
last year when sales were down due to protracted
labour troubles.
Meanwhile, the local unit of Hyundai Motor,
which mostly sells petrol vehicles, reported
a 1.5 per cent decline in local sales to
49,667 vehicles in July. Ford India domestic
sales slid by 16.8 per cent to 6,236 vehicles in
July, while General Motors in India fell by 23.3
per cent to 7,285 units.
Tata Motors, which owns British luxury
brands Jaguar and Land Rover, bucked
the trend, as its July car sales surged by 53
per cent to 26,240 units, with growth seen
across all segments.
The Society of Automobile Manufacturers
(SIAM) forecasts car sales will grow by nine to
11 per cent in the current financial year,
which ends next March, on hopes that possible
interest rate cuts will make auto loans
cheaper and spur demand.