<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01229c7e80680e0a3614jpeg.jpg" alt="" width="1050" height="637"/><figcaption></figcaption></figure>Nepal Rashtra Bank’s (NRB) tightness on share collateral, signs of a lack of liquidity and the opening up of other investment avenues post-lockdown are some of the factors behind the share market’s sharp decline of late.On Sunday, <a href="http://www.nepalstock.com/" target="_blank" rel="noopener noreferrer">Nepal Stock Exchange (Nepse)</a> recorded the highest-ever fall in its history after the market dropped by 5.03% in just the first two hours of trading. A 40-minute long circuit break was imposed, as 60 companies saw their share values decline by 10%, and the Nepse index to 2782.52 points.A slight recovery was soon posted, but Nepse still fell by 3.7% from the previous day, losing 108.26 points from 2928.8 points to an end-of-day total of 2811.16 points. By day’s end, 31 companies lost up to 10% value on their shares.Despite the fall in the index, there were as many if not more people trading shares and the volume of transactions were unaffected, with 23 million 79 thousand shares of 223 companies clocking in Rs11.24 billion in turnover.The current dip in the share market is in sharp contrast to the <a href="https://www.nepalitimes.com/latest/despite-politics-nepals-stock-market-is-bullish/" target="_blank" rel="noopener noreferrer">boom during the lockdowns and prohibitory orders</a> when other investment sectors remained shut, allowing big and small investors to trade from home with the online trading system flourishing unabated.Bank interest rates also fell as the investment sector shrunk during the closures. As demand for credit in other sectors began to decline, banks also increased their investments in equity securities. As a result, the stock market traded at a record high with a turnover of Rs19.55 billion and Rs21.64 billion on 14 May and 15 July respectively.However, since then with the reopening of other sectors, the demand for bank loans has increased. There are indications that the lack of investment capital will be repeated. As such, banks are preparing to raise interest rates.The share market’s decline has been particularly concerning over the last week, falling from 3044 points to 2817 in five days. This has resulted in a loss of Rs1.5 trillion, down to Rs39.44 trillion on Sunday from last week’s Rs40.89 trillion.<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141148/636d01249c7e80680e0a3615jpeg.jpg" alt="" width="623" height="351"><figcaption></figcaption></figure>Sunday’s fallout also prompted the Capital Market Reform Struggle Committee, led by investor Ram Krishna Dhakal, to demand the resignation of NRB governor Maha Prasad Adhikari for activities that have negatively influenced the share market.The committee has put forward 15-point demands including the limit of Rs120 million on margin loans brought by the central bank through monitory policy to be scrapped, the cap on dividends distributed by microfinance companies to be removed and the provisioning be modified.As per the NRB’s new stricter monetary policy, banks and financial institutions are allowed to give a maximum loan of Rs40 million to an individual or institution on the security of shares. Similarly, an investor can take a loan of only Rs120 million by pledging shares.Read also: <a href="https://www.nepalitimes.com/latest/instability-to-cost-nepal-dear-in-2021/" target="_blank" rel="noopener noreferrer">Instability to cost Nepal dear in 2021</a>, Ramesh KumarThe NRB didn’t only tighten its monetary policy, but all subordinate banks were also placed under strict restrictions, effectively banning them from share trading.To be clear, the NRB’s austere policies have caused the market correction by dislodging the confidence of large and institutionalised share traders, says share market analyst Mukti Aryal.The <a href="https://www.nepalitimes.com/here-now/insider-trading-taints-nepal-capital-market/" target="_blank" rel="noopener noreferrer">Sarbottam Cement share scandal</a>, in which Nepal Securities Board Chairperson Bhishma Raj Dhungana and Nepse CEO Chandra Singh Saud engaged in insider trading on IPOs, had recently dented confidence in the fledgling stock market.But the only way forward is for the NRB to examine its restrictive policies, adds Aryal: “The tightening of stock pledges is the chief reason for the market’s decline. Pledging one’s own assets as securities for trading should not be restricted.”However, instead of agitating against the regulatory bodies, investors themselves must adopt careful share-trading practices, says a share broker, adding that it is natural for the market to fall after being propped up by companies that very recently had bad portfolios.“If investors had invested in companies with solid portfolios, none of this would be happening,” he says. “Instead of investing smartly in profitable companies, investors hedged their bets on hydropower projects, development banks and finance, following the market rumours rather than prudent investment.”Translated by Kaustubh Dhital from the <a href="https://www.himalkhabar.com/news/125732?fbclid=IwAR1n22ltLRWRA6Yi8Lg23aGzl8ZLzgKvIlBx_UTy1R_3m9GZlgogZ9Y4F80" target="_blank" rel="noopener noreferrer">Nepali language original</a> in Himal Khabar.

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Inside Nepal’s biggest stock market tumble

<img width="1508" height="900" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbb39c7e80680e0a0b49jpeg.jpg" alt=""/>The heads of the Nepal Stock Exchange (Nepse) and Securities Board of Nepal (SEBON) as well brokers and industrialists have been found to have profited from insider training and conflict of interest, eroding the <a href="https://www.nepalitimes.com/latest/despite-politics-nepals-stock-market-is-bullish/" target="_blank" rel="noopener noreferrer">public’s trust in the country’s stock market</a>.   Documents show that they were engaged in ‘front running’ in contravention of existing rules governing the role of regulators and brokers in stock valuation and transactions. An investigation by <a href="https://www.himalkhabar.com/news/125318">Himal Khabar</a> this week found Nepse CEO Chandra Singh Saud and SEBON Chair Bhishma Raj Dhungana bought shares for family members in Sarbottam Cement at far lower prices just before its Initial Public offering (IPO). The board of directors of Sarbottam Cement decided to sell 6 million shares in the company through a book building process. The shares were valued at Rs750 per unit to raise Rs4.65 billion, of which only 12.9% were included in the initial public offering.  However, many of the shares were sold pre-IPO for less than Rs250 per unit even before the public offering, and others are believed to have been given for free as ‘presents’ to important people. Benefiting were close family members of SEBON’s Chair Dhungana, Nepse CEO Saud, as well as Global IME Capital which was handling Sarbottam’s IPO. <img width="2284" height="1512" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbb69c7e80680e0a0b4ajpeg.jpg" alt="">Says share market expert Rabindra Bhattarai: “This is a clear case of an attempt by insiders to unethically influence the market price of a company offering premium shares.”Global IME Capital’s parent company Global IME Bank is headed by Chandra Dhakal, who is vice-chair of FNCCI and is also a member of SEBON. Dhakal’s brother has 30% share in an investment company that bought some of the shares. Chandra Dhakal therefore had a conflict of interest in being in a position to be the regulator in the sale of investment vehicles in a company that his family had invested in. Documents show that Saud and Dhungana also used their positions to leverage cheap purchases of the shares in the cement company, while Sarbottam benefited by getting permission to enter the share market, illegally influencing the regulators’ decision-making. In the eyes of the law, this is equivalent to corruption and considered a crime.  <img width="1028" height="718" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbba9c7e80680e0a0b4bjpeg.jpg" alt="">“For a CEO of the Stock Exchange or its employees to use information about an IPO to personally buy shares is a direct and serious conflict of interest,” explains capital market expert Mukti Aryal. “Buying shares in a company that is going to be traded on its own platform opens up the possibility of share price manipulation. In a case like this the SEBON official has to declare a conflict of interest and step down.”Front running is a form of insider trading where those with knowledge of a company’s share value use it to make a personal profit at the expense of the public. For example, it is ‘front running’ when a stockbroker receives customer orders to purchase a large stock in a company, but instead speculates the value of the shares and buys or sells off shares for themselves accordingly. Such actions are not just unethical, but can even be considered a financial crime. Nepal’s Securities Act 2007 Clause 91 codifies into law measures against front running, prohibiting SEBON staff from divulging and profiting off any inside information received by their position. Regulatory authorities are also not allowed to be in contact with company executives, founders and managers or exchange any benefits with them.  <img width="2288" height="482" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbbd9c7e80680e0a0b4cjpeg.jpg" alt=""><a href="https://www.himalkhabar.com/news/125244">Nepse CEO Saud told Himal Khabar</a> he did nothing wrong, and admitted that he bought shares in Sarbottam at Rs250 per unit in the name of his wife, Sushila Kumari Bohara, but only after the cement company’s book building process had started. “It is only prohibited to buy and sell in the secondary market, there are no restrictions on buying shares in a company’s initial public offering,” Aryal told the magazine.However, Saud has been accused of purchasing the shares at a price lower than the company’s book-building, or share price evaluation.  <figure><img width="2000" height="1026" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbbf9c7e80680e0a0b4djpeg.jpg" alt=""><figcaption>Nepse CEO Chandra Singh Saud.</figcaption></figure>Companies that are going public must disclose all operations to regulators to ensure market transparency, but in no way are regulator officials, investment executives, brokers, company employees and others with an inside track allowed to enrich themselves using the company’s open books. Similarly, the investigation showed that SEBON chair Bhisma Raj Dhungana had also bought 11,992 shares in the name of his US-based daughter, Rebika Dhungana, in Sarbottam Cement before its book building process had started. SEBON’s Code of Ethics bars the board’s members and chair and their families from engaging in any transaction from which they can financially benefit.“Yes, my daughter sent me money from the United States to buy the shares, and yes, they are her shares,” Dhungana admitted. “Just because I am the chair of SEBON does not mean the law bars my married daughter from buying shares from any company she wants.”Dhungana was formerly with Nepal Rastra Bank, and is believed to have been nominated for the four-year term in SEBON at the recommendation of President Bidya Devi Bhandari. <figure><img width="1604" height="860" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110141124/636cfbc39c7e80680e0a0b4ejpeg.jpg" alt=""><figcaption>SEBON Chair Bhishma Raj Dhungana.</figcaption></figure><a href="https://www.himalkhabar.com/news/125258">An expert in share market regulations told Himal Khabar</a>: “This is a straightforward case of insider trading. There is no question about it.”Sarbottam Cement had signed an agreement with Global IME Capital to handle the IPO in March in the presence of SEBON officials, but the process has been delayed till later this month. Nepal’s manufacturing companies, especially in the construction and hydropower sector are currently riding a wave of market confidence. Another compnay, Shivam Cement, recently went public clocking a similarly strong stock market performance. The revelation of insider trading has been greeted by outrage on Nepal’s social media, and is likely to erode people’s growing trust in the stock exchange, with many commentators and financial analysts equating the secondary market with skulduggery, insider trading and outright theft.‘Are board members allowing suspicious companies to release shares under the temptation of illicit rewards?’ asked one social media post. Another went: ‘Is the share distribution process transparent?’ Yet another said: ‘Have finance bosses, chiefs and sales executives rigged the process to earn favourable shares for themselves?’ The share market had been anticipating a surge, riding a wave of investment interest of the Nepali public in the manufacturing and construction sectors. But the reports of insider trading confirm the public’s suspicions of hanky-panky, and are expected to dampen the stock market.  Moreover, moving forward, companies wishing to list their IPOs via book building will be cautious of possible behind-the-scenes dealings.The irregularity in Sarbottam Cement share offering is not the first of its kind, with the Securities Act 2007 violated previously.  In 2014, investors at Citizens Investment and Employees Provident Funds were caught exchanging investment with the Upper Tama Kosi Hydropower with shares for themselves in return. The regulations were subsequently overhauled and loopholes plugged.The Upper Tama Kosi and Sarbottam Cement cases are similar in the sense that they were both examples of graft, wherein two parties are believed to have exchanged confidential information for personal profit. Given the impunity that is rife in Nepal’s political and business spheres, the Sarbottam issue will further damage the reputation, trust and transparency of the share market, hurting an already moribund economy.Stock exchange legal expert Amrit Kharel is clear about the rules: “Three generations of the family members of a person with inside information about an initial public offering are barred from benefiting from any transaction, It is not just unethical, it is considered insider trading. And if any member of staff of SEBON is found to be violating this, they are liable to prosecution.”Links to Himal Khabar series on this subject:<a href="https://www.himalkhabar.com/news/125318">https://www.himalkhabar.com/news/125318</a><a href="https://www.himalkhabar.com/news/125244">https://www.himalkhabar.com/news/125244</a><a href="https://www.himalkhabar.com/news/125258">https://www.himalkhabar.com/news/125258</a>Translated by Kaustubh Dhital

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Insider trading taints Nepal capital market

<figure><img width="620" height="366" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bc9c7e80680e092dfdjpeg.jpg" alt=""/><figcaption></figcaption></figure>Aside from second-guessing what will happen in the restored Parliament on Sunday, the major past-time of urban Nepalis these days is to speculate about the country’s violatile stock market.Dring the past six months, the <a href="http://www.nepalstock.com/" target="_blank" rel="noopener noreferrer">Nepali Stock Market (NEPSE)</a> has soared, which immediately begs the question: is a fall imminent?The NEPSE Index is at a record high market capitalisation, which is the total value of shares listed in the stock market. Daily turnovers have started crossing the Rs10 billion mark, invetors seem to be raking it in.All this has happened at a time when the <a href="https://www.nepalitimes.com/latest/instability-to-cost-nepal-dear-in-2021/" target="_blank" rel="noopener noreferrer">economy is being battered by the impact of the pandemic</a>, which has led to heated debates over whether the market is in a bubble and likely to crash, bringing ordinate ionvestors down with it.  Current highs are the combination of several factors:<ul><li>Low interest rate (see figure 1)</li><li>High liquidity in the banking system</li><li>Dematerialisation (conversion of physical certificates to electronic units) of shares</li><li>Restrictionof ‘kitta-kaat’ in real estate</li><li>Fear of missing out (FOMO)</li></ul>Low share prices between 2017-2019 have been attributed to the appointment of <a href="https://www.nepalitimes.com/banner/calendar-of-economic-change/" target="_blank" rel="noopener noreferrer">Yubraj Khatiwada as finance minister</a>. He famously (or infamously for investors) once remarked that investing in stocks was “not productive”. <figure><img width="953" height="560" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bd9c7e80680e092dfejpeg.jpg" alt=""><figcaption> </figcaption></figure>One factor that has gone relatively unnoticed but has been a game-changer is the advent of ‘online trading’. The possibility to make transactions through the online banking system has ushered in a new breed of investors. Online trading has made the Nepali stock market easily accessible to the public, who can now trade from their living room instead of going to a broker office or bank to make a payment.This trend was starting to be reflected in the data before Covid-19 gripped the country (figure 2). From October 2019 to February 2020, the number of monthly share transactions doubled from an average of 200,000 to 400,000, which pushed the NEPSE Index to the 1,600s, despite relatively higher interest rate hovering above 11%. <figure><img width="961" height="541" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110111148/636cd7bf9c7e80680e092dffjpeg.jpg" alt=""><figcaption> </figcaption></figure>Following Covid-19 restrictions, the number of transactions further increased and reached a whopping 1.1 million per month in recent months. This reflects the unprecedented entry of retail investors who, with a click of a mouse, can invest money that otherwise would be sitting idle, earning savings account interest rates. This increased participation and diversification of the investor base is also reflected by the data on stock market penetration. DEMAT accounts have increased from 800,000 in mid-July 2017 to 1.4 million in mid-July 2019, and is currently estimated at 2.5 million -- about 8% of Nepal’s total population. More than 1.5 million Nepalis applied for the recent IPO of an infrastructure finance company. Compare this number with India, where around 2% of the country’s population invest in the stock market, while in China this number is estimated to be around 7%. But, online trading also brings a host of new challenges. Asymmetric information, poor advisory services and buying shares based on rumours are big concerns. Investors can lose money in the share market if they overpaid for stock or if their investment horizon is not long enough. However, by not investing they can also ‘lose’ potential gains. So, investors need to understand and be aware of cognitive biases that limit investing success. It is as much about human psychology as it is about finance and economics. The importance of diversifying across different companies and sectors, having a long-term investment horizon and personal finance management are even more important these days, but these are severely lacking in Nepal. An investor’s main motto always has to be: buy a diversified set of companies, invest regularly, keep track of the company’s financials and hold for a long period of time. Crucial reforms now await Nepal’s stock market, these can include: <ul><li>Increased participation of companies in manufacturing, agribusiness, etc</li> <li>Strong regulation on insider trading</li> <li>Better trade settlement systems</li> <li>Increasing the limitation of 50 brokers</li> <li>Creation of index funds and exchange traded funds (ETFs)</li> </ul>The NEPSE Index jumped more than 100% in the past year. You could argue that its current level is a bit high, but just because it has gone up by 100% it does not mean that it is overvalued, and vice versa. The cumulative annual growth rate of the NEPSE between 2001 and 2021 is around 12%, which is in line with the 10% return of the S&amp;P 500 (which tracks 500 of the largest US companies) in the same period. During these 20 years, there have also been periods where the NEPSE fell as much as 75% (between August 2008 and June 2011) and soared over 500% (between June 2011 to July 2016). Stock markets are cyclical by nature. Corrections, and subsequent rises, are bound to happen. In this apparently chaotic environment of ups and downs, one thing is here to stay: a fundamental shift and dynamism thanks to a new breed of investors trading online. This will have short-term disruptions, but it is likely to stabilise the Nepali capital market for years to come. Santosh Pokharel, CFA works in development sector. Sudyumna Dahal is Doctoral candidate at CAMA, <a href="https://cama.crawford.anu.edu.au/">Australian National University.</a>

Despite politics, Nepal’s stock market is bullish

The newly-formed Himalayan Art Council is set to launch Nepal’s National Art Protection Platform that seeks to preserve <a href="https://nepalitimes.com/banner/the-history-of-heritage">Nepal’s unique cultural heritage </a>using<a href="https://nepalitimes.com/here-now/artificial-censorship"> AI-powered tools</a>. The Council seeks to safeguard <a href="https://nepalitimes.com/banner/nepali-art-going-places">Nepali art works</a> from neglect, theft and counterfeiting as well as preserve existing artwork and celebrate living masters by giving them a cultural space to continue the <a href="https://nepalitimes.com/banner/sacred-survival">sacred art traditions</a>. "We are introducing a new digital platform designed to preserve, verify and elevate <a href="https://nepalitimes.com/banner/nepals-new-generation-of-alternative-artists">Nepal’s art for generations to come,</a>” says a statement from the Council, adding that the digital platform will use AI told for authentication and blockchain to keep track of works of art. Artists can now be protected by <a href="https://nepalitimes.com/multimedia/ayo-ai?fbclid=IwAR1uwmTVq4gUB70ljfRezjzukD9ArWXPuMnUikopeQ8PoiZMjicToPSwhKE&amp;=1">AI tools</a> that detect forgeries, identify their work even when unsigned, and ensure they receive proper recognition and credit. The archives will be searchable with translated inscription and interactive guides. Says curator Meena Lama: “AI and blockchains are tools that give us the power to detect fakes and identify unsigned paintings and track every piece. With these tools we can restore trust, secure authorship and give artists the dignity they deserve.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250514170544_2ab58f6313c0458f75114a692b0016bd9efb3b59d5f8f07f0da72e1e37b82f53.jpg" data-media-id="editor_6" data-image-id="20250514170544_2ab58f6313c0458f75114a692b0016bd9efb3b59d5f8f07f0da72e1e37b82f53" data-rendition-name="original" width="1300" height="1000" loading="lazy" alt="Artwork at the Traditional Art Exhibition at Patan Museum."> <figcaption>Artwork at the Traditional Art Exhibition at Patan Museum.</figcaption> </figure>  The Council is also holding an exhibition of Nepali cultural masterpieces with 50 historical <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/Buzz-the-art,671">thangka and paubha </a>by past masters and <a href="https://nepalitimes.com/review/between-the-sacred-and-everyday">contemporary works by current artists</a>. This curated collection is a living tribute to <a href="https://nepalitimes.com/here-now/when-yaks-go-so-does-culture">Himalayan culture</a> with economic depictions of deities, mandala and sacred narratives. The exhibition at <a href="https://nepalitimes.com/multimedia/a-portal-into-patan-s-past-and-present">Patan Museum</a> also provides an opportunity to meet painters and custodians of art and culture. Read also: <a href="https://nepalitimes.com/review/golden-deities">Golden deities</a>, Sewa Bhattarai ‘The exhibition is only the first step in a long journey to ensure that Nepali art is no just seen but fully understood, <a href="https://archive.nepalitimes.com/article/nation/Narratives-of-Faith-and-Memory-Remembering-the-Lost-Sculptures-of-Kathmandu-exhibition,987">protected and remembered</a>,’ the Council says. Artist Kailash K Shrestha of Artudio has spent decades promoting thankha and paubha traditions because of their beauty and devotional meaning. But he also says artists are underpaid, exploited and ignored. He adds, “AI and blockchain are not just buzzwords, they are powerful tools that can protect Nepal’s artists from fraud, verify authenticity and build a permanent record of provenance.” Traditional Art Exhibition Till 17 May Patan Museum

Digital protection for Nepal’s art

India and Pakistan are twins separated at birth. Tensions between them have been at a hair trigger ever since independence and has erupted into full scale conflict at least four times in the past 80 years.
The 22 April terrorist attack in Kashmir that killed 25 Indian tourists and a Nepali citizen, threatens to escalate tension between the two nuclear-armed nations. India has squarely blamed Pakistan for the attacks, and Prime Minister Narendra Modi has given his military “operational freedom” to respond. Pakistan has said it has credible intelligence of an Indian military strike and its officials have promised a “full spectrum” response — a code for a <a href="https://nepalitimes.com/editorial/thinking-the-thinkable">nuclear retaliation</a>.
For Nepal, the killing of its national in the Pahalgam attack comes as another stark reminder that in conflicts from Afghanistan to Iraq, from <a href="https://nepalitimes.com/opinion/how-to-agree-an-armistice-in-ukraine">Ukraine</a> to Israel, <a href="https://nepalitimes.com/news/10-nepalis-from-one-town-fighting-in-ukraine">Nepalis are getting caught in the crossfire</a>. The last time full-scale fighting broke out between <a href="https://nepalitimes.com/opinion/peacemongers-at-india-pakistan-border">India and Pakistan</a> on Kargil in 1999, at least 22<a href="https://nepalitimes.com/here-now/india-s-trial-by-fire-for-soldiers-from-nepal?%27%5C%22="> Nepalis fighting for the Indian Army</a> were killed in action.
Three of Nepal’s immediate neighbours (China, India, Pakistan) have nuclear weapons, and they do not have good relations. With China supplying weapons, <a href="https://nepalitimes.com/editorial/war-and-warming">missile technology</a> and other support to Pakistan, this triangular friction could set off a regional conflagration.&nbsp;
<a href="https://www.nature.com/articles/s43016-022-00573-0" target="_blank">Research at Rutgers University</a> has calculated that even a week-long tactical nuclear exchange between India and Pakistan would throw up so much smoke and debris into the atmosphere that it would block out the sun for years, and lead to a collapse of the <a href="https://nepalitimes.com/news/grow-nourish-sustain-together-world-food-day">global food system</a>. This does not take into account the radioactive fallout that prevailing winds would blow up to <a href="https://nepalitimes.com/here-now/lives-on-the-line-in-the-himalaya">the Himalaya</a>, contaminating glaciers that are the sources of <a href="https://nepalitimes.com/here-now/saving-what-is-left-of-himalayan-rivers">Asia’s main rivers</a>.
The impact of <a href="https://nepalitimes.com/news/climate-breakdown-linked-to-thame-flood">climate breakdown </a>on High Asia was already ringing alarm bells about its <a href="https://nepalitimes.com/news/himalayan-icecap-melting-faster-than-thought">shrinking ice cap</a> reducing the dry season flow of water downstream. Water was going to be the next strategic commodity, geopolitical experts warned, and the next wars in Asia would be over water.
That water war is already happening. India retaliated to the Kashmir attack by suspending the <a href="https://www.nytimes.com/2025/04/24/world/asia/india-pakistan-indus-waters-treaty.html" target="_blank">Indus Waters Treaty</a> of 1960 mediated by the World Bank that has withstood at least three wars between India and Pakistan. The treaty gives India control over the three eastern tributaries of the Indus (<a href="https://en.wikipedia.org/wiki/Beas_River" target="_blank">Beas</a>, <a href="https://en.wikipedia.org/wiki/Ravi_River" target="_blank">Ravi</a> and <a href="https://en.wikipedia.org/wiki/Sutlej" target="_blank">Sutlej</a>), while Pakistan got water from the Indus and two of its western tributaries (<a href="https://en.wikipedia.org/wiki/Indus_River" target="_blank">Indus</a>, <a href="https://en.wikipedia.org/wiki/Chenab_River" target="_blank">Chenab</a> and <a href="https://en.wikipedia.org/wiki/Jhelum_River" target="_blank">Jhelum</a>.
Pakistan was assured of 70% of the annual flow, and India could use a reasonable amount of water for<a href="https://archive.nepalitimes.com/news.php?id=15231"> irrigation and hydropower</a>. &nbsp;Within days of its threat, India stopped water flowing down to Pakistan from the Chenab river and is reportedly preparing to do the same on the Jhelum.
The sabre-rattling has reached a crescendo. Besides threats and counter-threats there are also symbolic drills, with the Indian Air Force practicing landing on an expressway in Uttar Pradesh by its Rafale, Su-30 and Jaguar fighter jets to demonstrate ‘operational readiness’. In response Pakistan test-fired its Abdali ballistic missile that can carry a nuclear warhead and has a range of 450km.&nbsp;
The danger is that with ultra-nationalist rhetoric and the beating the war drums by both sides, India’s government and Pakistan’s military may have to ‘do something’ to appease domestic public opinion. But any tactical strike, an artillery exchange, or territorial incursion could quickly escalate out of control.
Expecting an Indian retaliation for the Pahalgam killings, Pakistan is using<a href="https://nepalitimes.com/opinion/interfaith-collaboration-for-nuclear-disarmament"> nuclear deterrence </a>and warning of “catastrophic consequences”. The two neighbours came close to a nuclear exchange in 2019 after an attack on the Indian military in Kashmir, and prompt international intervention led by the United States cooled tensions.&nbsp;
This time, the <a href="https://nepalitimes.com/news/trump-shock-wave-hits-nepal">Trump administration</a> is too distracted and not as engaged. Pakistan has denied it was responsible for the terrorist attack and called on Washington to stop a possible Indian retaliation. India and Pakistan have stopped overflights by each other’s airlines, and some international carriers have even stopped flying over Pakistan fearing an air war.
Washington, Beijing, the UN and the EU have all urged restraint. Iran, which has good relations with both India and Pakistan has sent its foreign minister to urge both countries not to go into a tit-for-tat war. Iran has its own nuclear flashpoint to worry about with tensions in Israel, &nbsp;Yemen and Syria.
India and Pakistan both share similar problems of joblessness, <a href="https://nepalitimes.com/here-now/why-nepal-s-poverty-rate-is-stuck">poverty </a>and <a href="https://nepalitimes.com/here-now/climate-change-new-threat-to-nepal-s-rhinos">environmental threats</a>. Neither side needs the threat of a senseless war, and we in the neighbourhood do not need it either.&nbsp;
Kunda Dixit
This Editorial is brought to you by <a href="https://nepalitimes.com/" target="_blank">Nepali Times</a>, in collaboration with <a href="https://inpsjapan.com/en/" target="_blank">INPS Japan</a> and <a href="https://sgi-peace.org/" target="_blank">Soka Gakkai International</a>, in consultative status with UN ECOSOC.

Nukes in the neighbourhood

Most Nepalis thought they had seen the last of it after <a href="https://nepalitimes.com/news/11-56-25-april-2015-wkc9q2an">the 25 April 7.8 magnitude </a>earthquake ten years ago. But the Himalaya had more surprises in store. On 12 May, another 7.3 magnitude tremor that some said was an aftershock, but was strong enough to itself be a major earthquake, struck Dolakha.&nbsp; Not many people had heard of Singati till then — a cluster of houses by the Tama Kosi River along a narrow gorge that is the roadhead to Rolwaling Valley.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_57b6e316656851f71eca56ca6f98d9bbcc820c1a00d62af3c990725b4361244d.jpg" data-media-id="editor_1" data-image-id="20250508110520_57b6e316656851f71eca56ca6f98d9bbcc820c1a00d62af3c990725b4361244d" data-rendition-name="original" width="1000" height="1500" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_016534fb2b6a79957402281cda768efb83a146786377e39e11df3e251d37159e.jpg" data-media-id="editor_2" data-image-id="20250508110520_016534fb2b6a79957402281cda768efb83a146786377e39e11df3e251d37159e" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> </figure>  It was here that dozens were killed on 25 April in the first earthquake. Hundreds of <a href="https://archive.nepalitimes.com/article/nation/Singati-rising-from-rubble-rebuilding,3703">Singati survivors</a> had lined up for food and relief supplies in the morning of 12 May when the second earthquake triggered a rock slide that buried a nearby camp. At least 50 people were killed. &nbsp; Three hours later, a US Marine Corps UH-1Y Venom helicopter landed in a nearby cornfield to pick up the wounded, and flew off. The aircraft lost contact with air traffic control in Kathmandu and its wreckage was located high on Kalinchok four days later. Six American servicemen, two Nepal Army soldiers, and five wounded civilians from Singati were killed. Today, Singati bears little physical scar of the multiple tragedies that struck the town ten years ago. Most <a href="https://nepalitimes.com/multimedia/bungamati-builds-back">houses have been rebuilt</a> as urban-style concrete structures, and Singati has become an economic hub on the road leading up to several hydropower plants and a<a href="https://nepalitimes.com/banner/off-the-beaten-trek-in-nepal"> popular trekking destination</a>.&nbsp; The town looks less like a village and more like a suburb of the Dolakha district headquarter of Charikot, 47km away.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_196f341d1df1403ba133e5dfeb837eec20d7cbcb4c8c56b17cc5598810de5df2.jpg" data-media-id="editor_6" data-image-id="20250508110520_196f341d1df1403ba133e5dfeb837eec20d7cbcb4c8c56b17cc5598810de5df2" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110524_ae66c4a92430f67db51b5e11e017059eedfbac4cb18c8e073f2a50cca1fe904e.jpg" data-media-id="editor_7" data-image-id="20250508110524_ae66c4a92430f67db51b5e11e017059eedfbac4cb18c8e073f2a50cca1fe904e" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> </figure>  “The demand for construction material, cement, iron rods and bricks peaked after the earthquakes,” says Suresh Khadka, who owns a hardware business here and now supplies material to the 456MW Upper Tama Kosi hydropower project that is undergoing repairs after it was damaged by a landslide last year. The demand for cement boomed since most residents believe, not necessarily correctly, that <a href="https://nepalitimes.com/banner/in-a-disastrous-state">cement houses are safer</a>. Although Khadka did well selling construction material after the earthquake, he worries that most new structures do not follow seismic-resistant building codes.&nbsp; The construction boom financed by bank loans has in turn forced many from Singati to <a href="https://nepalitimes.com/banner/making-overseas-migration-better">migrate overseas for work</a> so they can service their debt.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110524_50caa4530bd5ff9120cf7ab70a62173846d337ef448ff8bac339f3faa375a9e2.jpg" data-media-id="editor_10" data-image-id="20250508110524_50caa4530bd5ff9120cf7ab70a62173846d337ef448ff8bac339f3faa375a9e2" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> <figcaption>Suresh Khadka</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_ef8b7d3993fc3b5df852bbf952feb3fbabc96d6883b0d5eb74ee5c60f4123b83.jpg" data-media-id="editor_11" data-image-id="20250508110520_ef8b7d3993fc3b5df852bbf952feb3fbabc96d6883b0d5eb74ee5c60f4123b83" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> <figcaption>Phu Doma Sherpa (right)</figcaption> </figure>  “My family had no choice but to borrow money to rebuild our home since the government compensation was not enough, and ten years later we are still paying off the loan,” says Phu Doma Sherpa, 60. Because of the shortage of qualified masons and proper seismic engineering, <a href="https://nepalitimes.com/here-now/structural-problems">many of the buildings are of questionable building standards </a>and the traditional architecture has been abandoned, admits Kul Bahadur Budathoki, deputy chair of the municipality. “But these buildings were more expensive than what the government grants could cover, many people here are heavily in debt and the men have <a href="https://nepalitimes.com/here-now/every-day-is-closer-to-pay-day">migrated to the Gulf to pay their loans</a>,” Budathoki says.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250508110520_32f89e97b7e757fc9286c0bbb671f48ea8d4468e9634fa646d7247c650ad8480.jpg" data-media-id="editor_14" data-image-id="20250508110520_32f89e97b7e757fc9286c0bbb671f48ea8d4468e9634fa646d7247c650ad8480" data-rendition-name="original" width="1501" height="1079" loading="lazy" alt="Climate magnifies earthquake risk in Nepal village NT"> <figcaption>Kul Bahadur Budathoki</figcaption> </figure>  Singati is in a multi-hazard zone. The <a href="https://archive.nepalitimes.com/article/nation/Singati,3091">12 May 2015 earthquake </a>could have led to the collapse of Nepal’s largest glacial lake, <a href="https://nepalitimes.com/here-now/stairway-to-heaven">Tso Rolpa</a>, upstream. Due to global warming, the glacier has turned into an expanding lake 3.5km long, and its collapse would have unleashed a catastrophic Himalayan tsunami down the Tama Kosi Valley, with Singati directly in its path. Singati has literally risen from the ashes of 2015, with its residents beginning to recover from the trauma and financial toll. But it is not out of danger as <a href="https://nepalitimes.com/news/climate-breakdown-linked-to-thame-flood">climate breakdown </a>magnifies the risk from future earthquakes.

Climate magnifies earthquake risk in Nepal village

The streets of Patan are alive this month with lavender jacaranda trees under rain-washed skies as <a href="https://nepalitimes.com/banner/the-red-god-rises-again-in-patan">the chariot of Rato Matsyendranath</a> is pulled across town. This is the festival of the rain god, and inevitably the heavens opened up and pre-monsoon showers pelted the chariot as it started being pulled in Pulchok last week. Thousands of devotees, onlookers and the chariot procession organisers thronged the streets on the first day last week. The rhythmic cymbals and drums exuded a vibrant energy as the enormous four wheels turned and the chariot lurched.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025051007050_81df97744db16f732a419dc1f1579d235ce3df37642b078f50b83bd4bd026688.jpg" data-media-id="editor_1" data-image-id="2025051007050_81df97744db16f732a419dc1f1579d235ce3df37642b078f50b83bd4bd026688" data-rendition-name="original" width="1000" height="1503" loading="lazy" alt="Divine chariot"> </figure>  The<a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/Red-rain-god,3141"> red rain god</a> has Hindu and Buddhist antecedents, alternatively called Bungadya and<a href="https://nepalitimes.com/here-now/kathmandu-s-gravity-defying-chariot-festival"> Karunamaya</a> — reflecting Kathmandu Valley’s syncretic mixture of the two religions.&nbsp; “Bungadya is a profoundly <a href="https://nepalitimes.com/opinion/12-full-opinion/marketing-the-intangible">intangible form of heritage</a>,” explains heritage expert Monalisa Maharjan. “It embodies traditional knowledge,<a href="https://nepalitimes.com/multimedia/reviving-nepal-s-craft"> artisanal skills passed down through generations</a>. Local communities and specific families have specified roles in being custodians of the heritage, ensuring their survival over the centuries.” There are many legends and stories about this annual tradition. Lichhavi king Narendra Dev is supposed to have brought Rato Matsyendranath from Assam to Kathmandu Valley to convince Guru Gorakhnath to lift a spell that created a two-year drought in Kathmandu.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250510050520_347a9a398f8a9abc4a7fb4e2774fde8264cccbdce8bdab23851ab3f0e73c3e8a.jpg" data-media-id="editor_6" data-image-id="20250510050520_347a9a398f8a9abc4a7fb4e2774fde8264cccbdce8bdab23851ab3f0e73c3e8a" data-rendition-name="original" width="1503" height="1000" loading="lazy" alt="Divine chariot"> </figure>  Matsyendranath was Gorakhnath’s mentor, and upon seeing him, the serpents were released, unleashing the rains. The chariot festival honours the return of this life-giving rain. The deity is seen as an icon for thriving agriculture, t<a href="https://nepalitimes.com/here-now/before-the-next-monsoon">he arrival of monsoon</a> showers, and the welfare of the community. Read also: <a href="https://nepalitimes.com/opinion/the-reign-of-the-god-of-rain">The reign of the god of rain</a>, Vidhu Prakash Kayastha Till this day, the Rato Matsyendranath festival is no ordinary celebration. Patan does not sleep for a month as the chariot is pulled through various neighbourhoods. It unfolds at a state level with the president (formerly the king) attending the climax of the Bhoto Jatra in Jawalakhel later this month.&nbsp; The intergenerational transmission of tradition is unique in the world, and the reason the festival is one of the most vibrant cultural expressions that thrives despite inroads of modernity. The other unique aspect is that it is a transnational festival, binding Patan with Guwahati in the Indian state of Assam.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025051005058_8bc685ada13045d863b28e3eed91c931da2b510714586af6fd7eb5d1e298a24a.jpg" data-media-id="editor_9" data-image-id="2025051005058_8bc685ada13045d863b28e3eed91c931da2b510714586af6fd7eb5d1e298a24a" data-rendition-name="original" width="1000" height="1503" loading="lazy" alt="Divine chariot"> </figure>  “Unlike Nepal, where the deity commands grandeur and devotion, many in Assam are unaware of Rato Matsyendranath,” says Khagen Sharma of Gauhati University, which convened <a href="https://nepalitimes.com/news/nepal-assam-connection-revived">a symposium in February in Guwahati on the rain god</a>. Attending was a delegation led by Lalitpur Mayor Chiribabu Maharjan, organisers of the festival, and builders of the chariot. After the symposium, a committee was formed to explore and revive the tradition in Assam as well. Although the team had planned to visit Nepal this month, logistical challenges delayed the trip. Still, there are plans to build a Guru Matsyendranath statue in Assam to reestablish regular worship practices in the Guwahati shrine.&nbsp; The vines used to build the chariot in Patan are sourced from the jungles of Assam. But Sharma notes that in recent years unclear regulations have blocked the official import of the vines, although they are still brought to Nepal informally. The <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/makers-of-machhindranath,2204">chariot making</a> has also had a taste of modernisation in recent times. In the past, even a single nail or piece of steel was avoided. But over time, the wooden structure, particularly the shaft between the wheels, has been replaced with bronze. When that too proved unstable, metal clamps were introduced, which have become a pragmatic compromise.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250510050524_b2a819a5791612f14c81d30fc393dbd3f99f0c64b90a9110e8b0855d944bfa93.jpg" data-media-id="editor_12" data-image-id="20250510050524_b2a819a5791612f14c81d30fc393dbd3f99f0c64b90a9110e8b0855d944bfa93" data-rendition-name="original" width="1500" height="998" loading="lazy" alt="Divine chariot"> </figure>  Another welcome change is the focus on safety. Builders climbing the chariot’s tower now wear harnesses and there are efforts in crowd control. The most visible change in recent years has been the involvement of Patan’s enthusiastic youth in the festival — the tradition is now passing to a new generation. Says Matsyendranath expert Vidhu Kayastha: “There is more energy, the young people in red t-shirts this year were very organised, these modern touches aren’t diluting our culture, they’re keeping it alive in new forms.” He adds, “We are <a href="https://nepalitimes.com/here-now/searching-for-a-homeland-away-from-home">reconnecting with our roots</a>, we have more resources, more awareness than ever before. We must not be swept away by western values that may not serve us, and in some ways, cause more harm than good. We must revive our own culture.”&nbsp;