THREE PARTY MADESHBADI FRONT TALKS INCONCLUSIVE

ONE MISSING WOMAN IN SOLOKHUMBU LANDSLIDE RESCUED UPDATE

Kathmandu, 14 Aug.: A 40-year-old woman missing in an overnight landslide at a village in Solokhumbu was rescued alive Sunday, police said.
Five others are still missing.
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THREE-PARTY, MADESHBADI FRONT TALKS INCONCLUSIVE UPDATE
Kathmandu, 14 Aug.: Talks between the Big Three and a front of Madeshbadi parties, calling themselves a fourth force, was inconclusive Sunday.
The Front which has developed an alliance with NC asked Prime Minister Jhalanath Khanal to resign to create an atmosphere to an environment for formation of a national government.
Khanal has now extended his proposed resignation from Saturday to Monday.
The three parties and the front are meeting again later Sunday.
The talks at Baluwatar, the official residence of Prime Minister Khanal, has been the venue of protracted talks between party leaders since Saturday morning to find a solution.
Attention is also centered at developments at UML party headquarters where the central committee of the party leading the government is discussing disciplinary against Khanal.
Khanal has been charged for ignoring directive not to reshuffle his government with a new Maoist government team led by Narayan Kazi Shrestha.
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NEW BODY TO PROMOTE TRANSMISSION LINES
SKathmandu, 14 Aug.: While the country is reeling under acute power crisis in lack of adequate hydropower projects to meet the growing electricity demand, construction of transmission lines is crucial to expedite the hydropower development. Considering this, the government has decided to establish National Electricity Transmission Line Grid Company (NETLGC), The Kathmandu Post reports.
The Cabinet meeting on Friday approved the proposal of the Ministry of Energy to establish NETLGC to ease the existing power shortage in the country.
Energy Minister Gokarna Bista said on Saturday that the establishment of the company was essential to expedite Power Purchase Agreement (PPA) process and encourage private developers to construct hydropower projects that would help address power deficit in the country.
According to Jayakeshar Maike, former director general of the Department of Electricity Development under the Nepal Electricity Authority (NEA), NEA is avoiding PPA on the pretext of inadequate transmission lines to evacuate power generated from the projects.
Energy Secretary Bala Nanda Poudel said the construction of transmission lines was not in the priority list of the government and that has hindered the hydropower development. Over the last decade, only 127-km transmission line was constructed. Currently, the country has 1980-km transmission line, while it is estimated that around 3280-km transmission line is needed to generate around 5,000 MW electricity in the country.
“The government’s reluctance to invest in the construction of transmission lines has worsened power crisis in the country over the years,” he said. The government usually allocates around Rs 400 million for repair and construction of transmission lines and the amount is inadequate.
The establishment of the company will help speed up construction of transmission lines and help NEA generate income from the private developers.
The lack of infrastructure like roads and transmission lines has become one of the major reasons behind the slow progress and low investment of private developers in hydropower projects, according to Poudel.
“We have transmission lines with carrying capacity of 33-KV, 11-KV and 132-KV double circuit line,” he said. “But if we have to develop Nepal’s hydropower and consume this within Nepal, NEA has to start constructing
East-West 400 KV, North-South 132 KV, and North-South 220 KV transmission lines along the corridors of North-South major rivers, where it is feasible.”
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CREDIT RATING AGENCY IN PIPELINE
Kathmandu, 14 Aug.: The capital market will have first credit rating agency soon, as India’s leading credit rating agency Icra has already started the procedure for setting up a rating agency here, Dikshya Singh writes in The Himalayan Times.
“Icra has applied for a ‘No Objection Letter’ after submitting the required documents,” said director of Securities Board of Nepal (Sebon) — the capital market regulator — Niraj Giri.

A foreign credit rating agency has to obtain ‘No Objection Letter’ from the capital market regulator to register the company in Nepal.

“The regulation requires Nepali credit rating agency to have a minimum of 25 per cent stake of foreign credit rating agency so that Nepal Investment Bank Ltd (NIBL) is planning to start the agency in association with Icra Ltd,” he added.

Moody’s Investor Service hold the majority stake in Icra.

“We are informed that they have already completed preparation of basic requirements,” Giri said, adding that the credit rating agency can be expected to come into operation soon.

According to the recently endorsed Credit Rating Agency Regulation, the companies planning to issue ordinary shares, bonds, debentures, preference shares exceeding Rs 30 million in value have to get themselves rated by a rating agency. The rating agencies also have to continue rating once rated companies for next two consecutive years as well.

The rating agency can charge the companies rating fee ranging between Rs 150,000 and 0.10 per cent of the total offering on the first year and follow up fee maximum of Rs 50,000 or 0.01 per cent of the offering.

The regulation also stated that the rating agency has to start the functioning within two years after obtaining the licence.

The credit rating agencies rate the credit worthiness and financial soundness of an entity — individuals, company or country based on their financial indicators. They assign ratings on bonds and other forms of debt instruments so investors can judge how likely an issuer — governments and corporations — could pay the debt back.

They are also supposed to be a simple yet effective indicator aiding the ordinary investors influencing their decision regarding the purchase of the securities.

However, the regulator is also conscious that the investors need to be educated regarding the functioning of the rating agencies along with clarifying the meaning of ratings. “The general public has to be educated that the investor should not take decisions solely based on the ratings issued by the rating agencies which might pose as a challenge,” expressed Giri.

The recent downgrade of United State’s credit rating by Standard & Poor has created ripples throughout the global stock and commodity markets.

The rating agencies were also sharply criticised after the 2008 financial crisis. They were accused of contributing to the crisis because they didn’’t warn about the dangers of sub-prime mortgages as investors lost billions of dollars when the mortgages went bad.

Likewise, the rating agencies had even failed to detect the problems the companies such as Lehmann Brothers Holdings and Enron on time. Enron’s rating even remained at investment grade four days before the company went bankrupt.

Proportionate Share Allotment System

Securities Board of Nepal (Sebon) has officially issued Share Allotment Directives 2068 to implement Proportionate Securities Allotment System. According to the new guidelines, shares will be distributed proportionately to all the applicants of Initial Public Offering (IPO) irrespective of amount applied for. The proportionate allotment will designate the shares to the applicants according to the proportion of the applied amount and there will not be any reason for the applicants to provide multiple applications to obtain larger number of shares. It will help remove the instances of fake application in the public offerings. The directive has segregated 40 per cent of total issue for the retail applicants. The retail applicants are defined as those who apply for unit shares amounting upto Rs 50,000. Sebon and merchant bankers have already started the discussion on developing software that will ensure proportionate allotment.
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