Market and Nepali press

Rajesh Sharma

I am sorry for making this my view public about journalists and media but I thought it to share with friends.

The journalists in Nepal are three types - principled, mobile and pressurized.

The first type are not many in number and are mostly not in good book of media barons. They are a bit comfortable financially and could stand on their principles.

The second type are always looking around for a few bucks to get as gift from heaven.

The third type are, perhaps, honest and dedicated but are in financial difficulties. They know but could not resist the pressure of the lords of the media - the owner.

The BIG media houses are really not part of the fourth state, they are out right businesses. They do not run TV or newspapers or journals or portals for a noble or greater mission but run the enterprises as profit ventures. Many smaller ones have also the same nature.

Hence, these types may keep eye always open to grab financial benefits out of news, views or other press products.

Like others, journalists or media from financial or economic aspects are also in business of manufacturing news and events. Therefore, credibility of media and the journalists in Nepal has eroded to a large extent.

So, when we think to share some information, let's quote the source. Quoting source primarily is not to prove but to provide other readers the credibility range of the news by aligning with the credibility graph of the source.

In share market, news has major influence and market like ours are full of rumors spread as news. Believing is highly costly than non-believing most of the time. Personally, I do not believe till I know the primary source of any vital information.

Story

Rajesh Sharma

A Fiction

(Below, please read a piece of fiction, an outcome of creative imagination.)

An Indian Daroga (Junior Police Officer) in Raxual had snatched some money from a driver for some minor fault. It was enough for him for buying a bottle of local Sarab (alcoholic drink) for the evening that could provide enjoyment for him and his friend. But, he was in need of money to arrange titbits (snacks). He was looking a prey for this. He saw suddenly a tanker coming carrying fuel of Nepal Oil Corporation. He stopped that tanker and started to offer threats to the driver. The driver was also an Indian and had thick skin. There were arguments and counter arguments and the tanker was standing. By the time the settlement was made for a bribe of small amount, a Twite from Birgunj saw that scene passing by it.

Without wasting a second, when he reached Birgunj, he twitted that a tanker has been stopped in Raxual by Indian police. A twite in Kathmandu improved the text a bit and twitted that several trucks and tankers are blocked in Raxual by Indian authority.

Another Twite improved the information further and twitted that India has blocked all goods coming to Nepal. Beelines of trucks are blocked in Raxual and in other boarder areas.

Two national leaders knew this information from the tweet and appeared in national television to inform public at large what would be their stand. They said separately that they are ready to go to any lengths including strongest form of protest (meaning war) against India to protect the national interest. Another said it would be counterproductive and India would suffer. They were ready to ride on the bicycle if embargo would be imposed. 

Knowing the strong reactions from the big leaders the youth intellectuals started bombarding with several twits and collectively a hastag was making round world over. Pakistani intelligentsia got good friends among Nepalese Twites. The hastag was trending as leading one.

The Nepali custom department unaware of such big movement going on said in the evening that the movements of goods were as usual normal. 

Note (Non-fiction) - India is a hegemonic power in the region and does many bad things. But, we should oppose its moves, which are real. Otherwise, we will fail to protect our national interests.

Merger: Three Major Obstacles

Rajesh Sharma

Merger: Three Major Obstacles
1. Human resource harmonization - This is crucial. From CEO to Junior Assistants or even below need harmonization. A few days ago, people were spreading rumors about X company merging with Y or Z company. This is too difficult to get human resources of two or more different brand value companies at par. Hence, that harmonization could be possible with same or closer brand value companies. For example, EBL, SCB and Nabil may be closer candidates for harmonizing human resources. But, their identity factor is too strong to submerge. If they agree to merge, there would an excellent new bank, perhaps. However, for banks like Janata, Mega and Civil, it could be possible to harmonize barring the CEOs/Chairpersons/board members etc. The persons in these dominating and high profile positions are another major obstacles.
Therefore, talking merger is simple and attaining merger is too difficult. That also has already been seen in several merger cancellations.
2. Harmonizing capital through mutually agreed upon swap ratio - This is another road block. The share holders want a larger pie and show different parameters, not only sticking to net worth. The picture captured during signing "Letter of Intent" for merger becomes unrecognizable when the actual merger decision need to operationalize. In the past also a few mergers have been cancelled due to this factor.
3. The national disease, the power politics - We have banks influenced by different political parties, their leading cadres/membership card holders and their stooges. Rather than taking decisions on merit of merger, they start tricks, tactic and strategies to controlling the new entity. By extension of dominance of power politics, we have also certain communities such as Newars dominating one bank, Marwadis the other and another in other one. This is another hindering factor that blocks merger. Here, one option is that the birds of same feather fly together. The AMALE banks be one AMALE bank, The Marwadi promoted banks be one Mawadi promoted bank ,etc. This picture sounds bizarre and some friend may blame me for projection of illusory division, but in practice, we have been seeing such divisions. Hence, we have banks of different feathers. One good thing is that we have majority of BFIs, which are politically independent. They could go for merger provided that the other obstacles have been removed.
Note: This is just my opinion not substantiated with data - qualitative or qualitative. Also, I invite friends to contribute their opinions.

This time politics

Rajesh Sharma

India Factor and Keeping OUR House in Order
I read the statement issued by India immediately after the promulgation of the constitution. It clearly states the relation between Nepal and India in bad shape.
1. In the past, we fought war against British-India during 1814 -1815. This resulted to loss of large parts of Nepali territories and end of probable expansion of Nepali state.

2. In 1950, the Rana dynasty did not succumb to Indian pressure initially and they had to relinquish power.

3. In 1989, King Birendra and his Panchayati orderly Marich Man dared to take Indian bull by its horn and the end result was disappearance of Panchayat and absolute power of the king.

4. During 2005 -2006, Gyanendra defied Indian whip and lost his monarchy.

Barring the first, India blended its role by being together with Nepali popular movements for democratic aspirations.

Now in 2015, once again India sounds anti-Nepali establishment and this time too its role is being blended with Nepali mass movement launched for equity and justice.

The strange phenomenon this time is that the known pro-India elements within the establishment are playing the roles of 'nationalist'. Are they covert agents and acting wearing nationalist skin or they are really changed souls? To be frank, DNAs of the roles of Oli and Sitaula in the past and during these days are not matching. Leaving this question open for answer, I will try to see what India wants in Nepal happening?

Indian attitude towards Nepal is that of a big brother. Even, sometimes, it considers the Himalayas in the north as its boarder. It has regrets, perhaps, that the Ballavbhai Patel line of annexing Nepal with India was not approved by Nehru in 1950. Hence, India, particularly its Rastriya Swayam Sevak Sangh Parivar (Family) including the Bharatiya Janata Party believes at its core that Nepal is part of their Akhanda Bharat. That Parivar controls India now. These are some given governing attitudinal aspects we have to live with and should find out our strategies to ensure our sovereignty, territorial integrity and coexistence. Hence, nether we should behave as slaves nor we should throw stones that could do nothing other than releasing our own precious energy unnecessarily.

By the above analysis we could easily understand that India has been eyeing Nepal as a prey. Is it possible India can swallow Nepal? Impossible. Is it that India intends to capture Nepal? I believe, not at all. Then what India wants? Control covertly by adopting a strategy of controlled instability in Nepal. Now, India's primary interests include harnessing Nepali water resources for its benefit, settling boarder disputes particularly at Lipulek and Susta on its favor, getting contracts of large infrastructure projects in Nepal for Indian companies, sustaining its dominant position for its goods and services in Nepal and ultimately keeping Nepal's political, bureaucratic and military leadership dancing at its music. We know what India wants. What should we be doing then?

I am not a monarchist, nor I subscribe Mahedra's dictatorial regime. However, I salute him for his endeavors for infrastructure development including the idea of East-West Highway, expansion of educational opportunities and some initiatives of social reform. Similarly, I appreciate his foreign policy particularly Nepal's relations with India and China. He did not spoke loud words; neither had he succumbed to any pressure exerted on him. His diplomacy was silent but meaningful, slow but that protected Nepal's interests. We should learn from Mahendra and we should make us stronger through silent, thoughtful and fruitful diplomacy.
Another factor is that to attain its goal in Nepal, India needs blending with our own people. This is the best way for India to interfere. To stop this happening, we should unify our people by removing injustices, inequalities and partiality. Now, we promulgated a constitution. This constitution is my constitution as a person of Khas origin, hill-resident, male, Bahun having Nepali as mother tongue, from a cow worshiping traditional family but an atheist. It did not address the issues raised by Tharus, Madhesis, Janajatis, Dalits and even that of women. From the perspective of SRI THREE BAHUNS (Koirala, Oli and Dahal) and their cronies, they may feel that they have addressed everybody's, but they lack perspectives and they lack empathy. They have become the slaves of the past and they have become the victims of conditioning. They produced a Barhmu constitution.

Now, if we like to keep India out from our business effectively, not throwing stones against India, but keeping our house in order is the need of the day.
Hence, I will not go with the constitution celebrating crowd. 'My constitution' is not what I was expecting, I was expecting for an "OUR CONSTITUTION". Many people have died and the course is continuing. In a situation of mourning, I could not celebrate.

Note: I feel uncomfortable being friends, who's expressions are anti-Madhesis, anti-Tharus, anti-Janajatis, anti-Dalits and even irrationally anti-India. So, I will unfriend them by this evening or by tomorrow. If some friends feel uncomfortable being friend with me because of my stand, please unfried me.

Blood bath in share market today

Rajesh Sharma

Milking negatives or positives, converting them into missiles or poisonous lollipops and killing many birds, tigers or even lions so as to fatten oneself are some wonderful features of Nepali capital market. On the other side, there is always a panicking or overly hurried crowd ready to participate in the process. These are not only small investors but many are medium or even big investors. Hence, now this is not limited to Big vs Small; rather this is cleaver strategist vs holly cows.

Ultimately when it became news, a few hundred trucks and some gas bullets entered Bhairahawa. At the most, it could be supply disruptions for the time being. There may not be any embargo even for a distant time. 1989 could be repeated but with difference to match with issues, intensity and time. Let's not be influenced by exaggerations by leaders, particularly like Prachanda, who could not stop without exaggerations.

Let's stay calm and do business keeping eyes open on fast changing situation. This time is though risky but equally highly rewarding too. The Mantra I believe is let's not panic, neither be in hurry. Let's stay composed look around, have glasses of water, use our common sense, use available resources, not rely on so-called planted information and decide using best of our knowledge, skills and capacities.

I have full sympathy to them who sold today and probably may sell tomorrow too.

FPO

Rajesh Sharma

y comment on Sanj Maharjan ji post regarding FPO.

The law says minimum 30% shares should be offered to general public. Also it says for joint ventures, NRB will prescribe such percentage (on case by case basis?). Hence, Joint ventures could not be forced to have 70 - 30 and other banks and BFIs are also not restricted to just 30% to public offering. Therefore, if BFIs get NRB approval, they may go for FPO (This is my opinion. I have no background in law). In this situation, when the BFIs are forced to increase their paid up capital and FPO is one such instrument, we should get better educated in this regard. I request friends with background in corporate law to enlighten us. (Please also read section 7 of the act. http://www.lawcommission.gov.np/.../banks-and-financial...).

Look before you leap

Rajesh Sharma

(Posted on FB Small Investor's Creative Ideas on 31 August 2015)

This is time to hold on emotions, stay safe from an epidemic called market rumor, look into fundamentals of companies, overcome greed of quantity of shares that could be increased heavily and to stay back and go counting on basics - basics of companies, basics of sectors, basics of the state of national economy and equally or a bit more on the basics of political upheavals.

This is a bull market and that may continue provided politics will not create havoc. But, the speed the index has moved up may loose its speed. The momentum in the market has been created not by objective factors such as political stability, enhanced and accelerated economic growth, long term favorable policy interventions and emergence of new factors that impact highly positively over the market. The major reason of the increase in index is the possibility of increase in quantity/number of shares through bonus/rights/FPO etc as the regulators - NRB and Insurance Board have asked to increase paid up capital by a few folds. This is, as such, is subjective factor and may get nullified by any type of change in policy or modification in some form.

I think, when we will start using the analytical as well as critical part of our center of reasoning located some where inside the brain, we could find out good or bad almost any time of the day or night. Right now also the same is applicable. Hence, finally, it is now absolutely necessary to do our home work properly to insure that we must not let the speeding bus go without boarding us but at the same time, we should be cautious not to have a major accident due to our hurry. Let's be rational, continue buying and selling and remain active in the market being informed, being analytical, being as objective as possible and taking calculated risk as much as possible. Rest, we should leave to market.

Merger and some speculation about EBL

Rajesh Sharma

Merger is a Jarsi milking cow for speculators. Now it is EBL and Kumari, the next could be EBL and Janata, the third could be EBL and Nabil and so many. Many finance companies and development banks will be paired with EBL, Nabil or SCB. Speculation is another form of wild ima

I have also some speculative assessment about EBL. This may be just wishful thinking or may be some salt withinn, I am not sure. In this phase of wild imagination, it is too painful to stay away. Hence, I have put a speculative scenario about EBL.

Why the Great B. K. Shrestha of EBL sold about 10% of his holding in EBL? As some have said he needs money to arrange his daughter's marriage. Strange imagination! B. K. Shrestha needs to sell shares for his daughter's wedding? Was he eating grass till now? Discovery of stupid reason.

It is clear that B. K. Shrestha needs money now. Why? One of the major reasons could be reinvestment. EBL is his milking cow and he needs money to keep his milking cow healthy and better milking. If EBL issues 1:1 rights shares, B. K. Shrestha needs 15 Corer for his 15 Lakh Kitta Shares. Now , he could have much more than 30 Lakh shares with much less than the amount he has. Is it again a stupid reasoning? I am not sure.

Punjab National Bank was interested in increasing its investment in the past. This time it has that opportunity. Why it will not put a small drop of its investment in such a hugely popular and profitable entity? This is just an unanswered question.

Why PNP and B.K Shrestha will share their hard earned brand value, goodwill, image and standing without any solid reason behind?

Hence, I believe, the merger is just the rumor spread with the intention of getting a few more pennies from heaven and they are surprisingly successful too!

Note: The above conclusion is just the outcome of some imaginative assumptions. Friends, you park your money at your own risk.

Laghubitta bikas banks

Rajesh Sharma

1. According to new NRB directive, cross holding of micro-finance companies will end with immediate effect and they have to sell their cross holding, if any, within two years.

http://bfr.nrb.org.np/…/2072_73_(For_D_Class)--Circular_3-%…

2. Number of micro-finance companies has increased fast. New "ONe Zille" development banks have this options to convert to micro-finance. The NGOs with approval to run saving-credit schemes are being converted to micro-finance companies.

3. The last blow could be spread rate on interest. If that will come into effect, micro-finance companies may loose their attraction of investors as their profitability will be decreased greatly.

Hence, we should keep our eyes open to read the possibilities and should start some precautionary acts. There is no immediate danger, but on the long run, the danger could be very real.

Note:

There were 14 one-district development banks popularly called as "one Zille bank". This is the figure of Poush 2071. They are not new banks but when the development bankers association asked NRB to allow them to be micro finance bank or laghu bitta bikash bank, the NRB has said it is positive to do so. For the details of such banks including name, location, etc, please visit:http://www.nrb.org.np/.../Profile_1_District_Level.pdf