<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

On Tuesday, leader of the monarchist RPP once again gathered on Kathmandu’s streets to deliver fiery speeches, but this time there was no arson and looting and no need for riot police to fire live rounds or tear gas.
RPP leaders demanded the release of their members including vice-president Rabindra Mishra and MP Dhawal Shamsher Rana were arrested during the violent <a href="https://nepalitimes.com/news/republicans-and-royalists-on-nepal-s-streets">28 March protests at Tinkune </a>which left two dead. 
They denounced the current leadership of the main parties, demanding the <a href="https://nepalitimes.com/editorial/nepal-party-reincarnating-hindu-monarchy">restitution of Nepal as a Hindu kingdom</a>. They also said the government was responsible for the fatalities on 28 March because it provoked its rally with a tear gas attack even before it started.
It has now been revealed that the police fired at least 100 live rounds from high powered assault rifles at the crowd. Twenty-one of the 120 injured received bullet wounds, and most of them were bystanders and people trying to reach home. 
Tuesday protest on the Ring Road in Balkhu was much more subdued, and comparatively fewer RPP supporters showed up. The arson and vandalism in the previous protest appears to have cost some support for <a href="https://nepalitimes.com/news/the-ghost-of-monarchy-returns-to-haunt-nepal">former king Gyanendra </a>especially for the anointment of medical tycoon and bank defaulter <a href="https://nepalitimes.com/news/street-politics">Durga Prasai </a>as ‘commander’ of the Tinkune rally.
Some monarchists acknowledge Gyanendra’s mistakes when was king 2001-2008, but say he has had a lot of time to reflect on his shortcomings and seems more disciplined and committed. His supporters have tried to build on nostalgia among some Nepalis for<a href="https://nepalitimes.com/news/why-invest-in-nepal"> domestic stability </a>and international respect that <a href="https://nepalitimes.com/here-now/if-birendra-was-alive-nepal-could-still-be-a-monarchy">the monarchy</a> commanded. 
“Nepalis were promised better service delivery, opportunities for the underserved, as well as better, more honest use of state resources, but the <a href="https://archive.nepalitimes.com/news.php?id=16992">people in leadership </a>have not been able to deliver on their commitments,” says RPP leader Prakash Chandra Lohani. “The gap between their rhetoric and reality has widened, the people feel betrayed, and the respect Nepali people had previously had for them has changed to revulsion.” 
Indeed, many commentators have warned the three main parties and their <a href="https://nepalitimes.com/editorial/politics-as-usual">serial prime ministers</a> who have ruled Nepal for much of the past 30 years should address rising public anger with them, and see the writing on the wall.
‘<a href="https://nepalitimes.com/news/nepal-government-changes-again">The UML, NC and Maoists</a> must introspect about their conduct,” warns Gunaraj Luitel, editor of Nagarik, in an op-ed this week. ‘These leaders for life may save themselves from simmering public anger, but they will not be able to save the system. The monarchist wave can only be dispelled when citizens are assured of <a href="https://nepalitimes.com/here-now/nepal-s-local-election-gives-power-back-to-people">better governance</a> through <a href="https://nepalitimes.com/latest/real-world-training-for-youth-leaders">younger leaders</a>, and reforms.’ 
Rifts between radical royals who are gunning for a return to <a href="https://nepalitimes.com/here-now/mob-movement-and-mayhem">Panchayat-style absolutism </a>and moderate monarchists who favour a constitutional king have also weakened the movement somewhat. The split between the RPP and RPP-Nepal cost the royalists numbers in Parliament in 2022, and both parties denounced the violence last month, albeit shifting the blame on the government.
The irony is that the same royalists who want to scrap the republican Constitution had formed electoral alliances with the UML during the 2022 elections. RPP-Nepal chair Kamal Thapa contested the 2022 election with the UML. Thapa has not taken part in the last two rallies, saying he will only be a part of a movement under a national flag, and not a RPP party banner.
For his part, the RPP’s Rajendra Lingden is said to be hesitant to censure some of his party’s more radical royalists for fear of fissure within his ranks, despite his aversion to Durga Prasai’s role. 
Analysts have questioned why <a href="https://nepalitimes.com/news/old-is-still-gold-in-nepali-politics">supporters of the monarchy </a>have decided to reestablish an institution that would not ultimately have executive decision-making power. There are doubts about whether authoritarian-minded Gyanendra will be satisfied being a <a href="https://archive.nepalitimes.com/news.php?id=13957">ceremonial king</a>. 
Read also: <a href="https://nepalitimes.com/news/nepal-s-deja-vu-on-black-friday">Nepal’s déjà vu on Black Friday</a>, Sonia Awale
"The Nepali people will not accept <a href="https://nepalitimes.com/here-now/forgotten-woman-who-sheltered-communist-activists">an absolute monarchy </a>at this point of time, and both the public as well as <a href="https://archive.nepalitimes.com/news.php?id=8371">king Gyanendra</a> are fully aware that there is no other possibility beyond a constitutional monarchy," asserts the RPP’s Lohani. “The traditional monarchy’s institutional capacity might have been enough to meet the needs of feudal Nepal, but an absolute monarchy is impossible both in concept and practice in the context of <a href="https://archive.nepalitimes.com/regular-columns/Economic-Class/waiting-for-an-industrial-revolution,784">modern day Nepal</a>.”

New year revolutions

Besides multiple <a href="https://nepalitimes.com/news/republicans-and-royalists-on-nepal-s-streets">street demonstrations </a>that gridlocked Kathmandu’s traffic for the past weeks, public discourse in Nepal has also been dominated by dangerously <a href="https://nepalitimes.com/here-now/air-pollution-is-more-dangerous-than-smoking">high air pollution levels</a>. Caused mostly by hundreds of <a href="https://nepalitimes.com/news/wildfire-season-starts-early-in-nepal">forest fires </a>raging across the country, the smoke contains suspended soot particles that harms <a href="https://nepalitimes.com/opinion/playing-with-poison">human health</a>. Thursday’s rain have cleared the air somewhat, and many people will soon forget how bad the air quality was. But the time to address the roots of next summer’s fire season is now.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250411060440_d1a119716a9031aadfdd611d299348d436842d376a03e664b8d773957a237524.jpg" data-media-id="editor_4" data-image-id="20250411060440_d1a119716a9031aadfdd611d299348d436842d376a03e664b8d773957a237524" data-rendition-name="original" width="502" height="540" loading="lazy" alt="Wildfires"> <figcaption>EXTINGUISHED: Forest fires raging all over Nepal in the week after 3 March (above) reduced air quality, creating a public health hazard in Kathmandu and across the country. Each red dot is a fire detected by infrared sensors on the NASA Fire Information for Resource Management System (FIRMS) satellite. But the rain on Thursday doused most of the fires (below) with more rain forecast over the weekend.</figcaption> </figure>  The reason everyone was talking about air pollution was because the<a href="https://nepalitimes.com/banner/nepal-is-going-up-in-smoke"> smoke from wildfires</a> was visible. But much more toxic are the invisible and odourless <a href="https://nepalitimes.com/news/nepal-doubles-its-carbon-footprint">gases from vehicular and industrial emissions </a>which have always been there. The theme of World Health Day on 7 April this week was ‘Healthy Beginnings, Hopeful Futures’ dedicated to <a href="https://nepalitimes.com/opinion/comment/saving-more-mothers-and-babies">preventing maternal and newborn deaths</a>. It is estimated that in Nepal, 30% of neonatal mortality can be blamed on air pollution. But that is only part of the story. Harmful as fine particulate matter is to human health, carbon monoxide, nitrogen dioxide, ground-level ozone and other gases in vehicular emissions are more hazardous to health. While the concentration of suspended particulate matter tinier than 1.5 microns (PM2.5) is closely monitored, these toxic gases are invisible, not measured much, and the public is not aware about the dangers they pose. Surface ozone is produced by the interaction of various gases found when <a href="https://nepalitimes.com/news/fossil-fuels-poison-air">burning fossil fuels</a>. Besides being poisonous, ground level ozone contributes up to 0.23°C to <a href="https://nepalitimes.com/here-now/nepal-s-mountains-are-melting">global warming</a> because it is also a greenhouse gas. A new policy brief by the Clean Air Fund titled The Case for Action on Tropospheric Ozone blames surface ozone for a half a million premature deaths every year, 54.8% of which are in South Asia. Ozone also stunts plant growth and reduces crop yields by 26% globally, and 11% loss in <a href="https://nepalitimes.com/news/economic-benefits-of-saving-the-ecology">forest productivity</a>, the report adds.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250411060456_aa02a923f8b27544ae54d0220162678f5bbb5eeb8fc3c466173c22c49b3e9a85.jpg" data-media-id="editor_11" data-image-id="20250411060456_aa02a923f8b27544ae54d0220162678f5bbb5eeb8fc3c466173c22c49b3e9a85" data-rendition-name="original" width="998" height="724" loading="lazy" alt="Gas Chambers"> </figure>  Read also: <a href="https://nepalitimes.com/here-now/bad-air-and-polluted-politics">Bad air and polluted politics</a>, Sonia Awale Ground-level ozone is not emitted directly into the air like other gases, but is formed when oxides of nitrogen (NOx), carbon monoxide (CO) and volatile organic compounds (VOCs) released from automobile tailpipes or industry smokestacks react chemically with each other in the presence of sunlight. The main source of carbon monoxide in Kathmandu Valley are its 1.2 million two-wheelers. “Usually the concentration of carbon monoxide is 200-500 parts per billion (ppb), this has increased up to 3,000 in Kathmandu. Meanwhile, ground-level ozone has gone from 70-80 ppb to 150 ppb,” says Ravi Sahu, regional air quality specialist with the Kathmandu-based International Centre for Integrated Mountain Development (ICIMOD).&nbsp; Sahu says <a href="https://nepalitimes.com/news/no-smoke-without-fire-p7vb9dcj">rampant forest fires of the past weeks</a> have also added to carbon monoxide and ozone in the air, not just the fine particles that make up the visible smoke. He adds, “There isn’t much awareness about <a href="https://nepalitimes.com/banner/poisoning-the-air-we-breathe">ground-level ozone and carbon monoxide</a>, we need to urgently look into it.” A distinction must be made between good and bad ozone. Stratospheric ozone protects living beings from harmful ultraviolet (UV) radiation from the sun.&nbsp; Tropospheric ozone can again be separated into two types: ozone in the free atmosphere which is a greenhouse gas much more potent than carbon dioxide, and ground-level ozone which has adverse impacts on health and agriculture. ‘Cutting tropospheric ozone presents a unique challenge as it requires smart and fast action across multiple greenhouse gases and air pollutants, as well as multiple economic sectors,’ notes the Clean Air Fund's policy briefing. ‘It is a growing and neglected problem that needs an integrated approach on both a local and global level to tackle climate change and air pollution together.’ Dying young There was a time when Nepal made it to international news bulletins only if there were fatalities on Mt Everest. Now, Kathmandu’s bad air frequently makes headlines all over the world. This past week, the concentration of PM2.5 that harms human health was up to 40 times the WHO recommended guideline — adding to the poisonous gases already present from vehicle emissions. The Department of Environment says 40% of the pollution in the past weeks was from wildfires sparked by nearly 6 months without substantial rain over central Nepal. Most of the rest is from vehicular and industrial emissions from Kathmandu itself and across the southern border. NASA’s Fire Information and Resource Management System (FIRMS) which issues daily maps of fires, showed hundreds of blazes raging across Nepal on Wednesday, mainly in Chitwan, Parsa and along the East-West Highway.&nbsp; “If we look at the figures for the last few years, it is clear that wildfires have become the biggest source of air pollution, they are seasonal but have overtaken vehicular emissions,” says urban planner and environmentalist Bhushan Tuladhar. “Forest fires, stubble burning, and open burning of garbage are the bigger problems now. Nepal, India, Bangladesh, and Pakistan are at risk every year, we shouldn’t further delay in finding solutions,” warned air quality expert Bhupendra Das during an event on air pollution organised on 7 March by the Nepal Forum of Environmental Journalists (NEFEJ).&nbsp; Indeed, studies have shown that in winter 60% of the air pollution over Kathmandu is transboundary from the south, and in November it is compounded by smoke from crop residue burning by farmers in India and Pakistan blown in by prevailing winds. Forest fires are a regular pre-monsoon occurrence in Nepal, often intentionally set by farmers and herders to stimulate new grass growth for livestock. Winter rains have failed for eight of the past ten years, and this means the fires often spread out of control. The other reason for the increase in wildfires is the doubling of forest fires to 46% of the country’s area in the past 25 years. But this has happened simultaneously with outmigration, with some mountain districts losing 30% of their population between 2011-2021. With less pressure on forests for fodder and firewood, the undergrowth of community forests is loaded with dry fuel just waiting for a spark. The bowl-shaped topography of Kathmandu, Pokhara and other valleys further concentrates pollutants as they are trapped by surrounding mountains. But a year with a high number of wildfires is usually followed by a year or two with fewer incidents. For example: there were 6,537 fires in 2021 but the following year the number was down to 1,528. There were 5,216 fires last year, this year the number has already reached 1,800, and the trend is likely to be broken. Heavy rains forecast for the coming days are expected to douse some of the fires and clean up the air. But the damage has been done: Kathmandu residents of all age groups this week crowded clinics and hospitals with burning eyes, itchy throats, difficulty breathing, headaches, and dizziness. But in the longer term, soot particles that are tiny enough to jump the blood-air divide in lung capillaries do not just cause Chronic Obstructive Pulmonary Disease (COPD), asthma, but also cancers, heart attacks, strokes, birth defects and other chronic diseases. The latest Air Quality Life Index (AQLI) report by the University of Chicago shows that the annual concentration of PM2.5 in Kathmandu’s air rose from 17.87µg/m3 in 1998 to 31.33µg/m3 in 2022. Air pollution has got worse by 75% in Kathmandu in 25 years. During this time, air pollution has reduced the average life expectancy of Kathmandu’s residents by 3.5 years. According to the Health Effects Institute in Boston, dirty air is among the biggest public health concerns in Nepal killing over 42,100 a year. The adverse impact of high levels of air pollution is not limited to public health, it is seriously affecting tourism. Operators in Pokhara this week said that there were many negative online posts by visitors unable to see the famous panorama of Machapuchre and the Annapurnas even from Sarangkot. Aviation is also affected, as planes have to circle sometimes for hours burning a lot of fuel because of runway visibility being below minima at Kathmandu airport. The higher fuel cost is just passed down to customers, making air tickets in and out of Kathmandu some of the highest in the world. Kathmandu, with a population of four million, has not implemented a concrete policy to curb toxic air despite having formulated various action plans and repeated commitments by the government to protect the environment and control air pollution. The Department of Environment’s 2017 Air Quality Management Action Plan for Kathmandu put forward a policy to reduce air pollution caused by vehicles which was approved by the Cabinet, but has yet to be put to practice. The action included the immediate implementation of the Euro 5 emission standard to reduce pollution emitted by vehicles. However, Nepal has not even been able to implement Euro 4 standards so far. India, meanwhile, has already moved forward with the implementation of the Euro 6 standards. Says Ravi Sahu: “Air pollution in Nepal is not just about air pollution, it has ties to tourism, aviation, the economy so we must be prepared for annual conditions like forest fires, and this requires urgent interdisciplinary collaboration.” &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250411050452_821d09e283d8a590f1369bfb71b9b7fc6d950726e0651ea86c6488d04deb1742.jpg" data-media-id="editor_15" data-image-id="20250411050452_821d09e283d8a590f1369bfb71b9b7fc6d950726e0651ea86c6488d04deb1742" data-rendition-name="original" width="839" height="784" loading="lazy" alt="Silent Killers"> </figure>  &nbsp;

What is invisible is more dangerous

82 in २०८२

Here in the mountains of far-western Nepal, the biggest threat to life and limb is gravity. Women collecting fodder fall from trees, boys grazing goats fall off cliffs, heavily loaded tractors plunge from dirt roads carved out of steep slopes. There is nothing to be done about those who die on the spot. But for the severely wounded there is only one hospital: Bayalpata. And it is there that <a href="https://www.youtube.com/watch?v=CJzWlnYd0ZM&amp;t=8s" target="_blank">orthopaedic surgeon Mandeep Pathak</a> is the last hope for many wounded people. Pathak, 42, is too modest to tell us how many lives he has saved over the past 10 years he has worked at Bayalpata. But hospital records show he has performed more than 4,000 operations in the past decade, many of them so patients did not suffer permanent physical disabilities. Pathak also did 800 major life-saving surgeries in that time. “I treat patients with injuries, but I wish I could also treat poverty,” Pathak says, emerging from Bayalpata’s surgical theatre one recent afternoon. <div class="embed-block"><iframe width="700" height="415" src="https://www.youtube.com/embed/CJzWlnYd0ZM?si=s_rkbU4YDaw87gqH" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div> Sudurpaschim Province in Nepal’s far-west is far away from everything: from Kathmandu, from adequate medical care, from food security, and far from the reach of government services. It has suffered state neglect for centuries, its men mainly migrating to India for seasonal work to families who depend on subsistence agriculture. Pathak remembers the searing sadness he felt when a patient once told him, “Doctor, I sold the last of my rice to pay to come here, please give me a medicine that I can take on an empty stomach.” Pathak was born in Kathmandu, and after getting his MBBS from Kathmandu University, he got an MD from The Philippines. At a time when many Nepali doctors and staff nurses were emigrating, Pathak did not just return to Kathmandu but decided to go to one of the remotest districts in Nepal to serve those most in need. The hospital was established in 2009 in the village of Bayalpata, and has been managed by the non-profit <a href="https://www.nyayahealthnepal.org/" target="_blank">Nyaya Health Nepal (NHN)</a> as a public-private partnership treating 100,000 patients a year for no fees at all. NHN is now preparing to hand over the running of the hospital to the Sudurpaschim provincial government so its <a href="https://nepalitimes.com/banner/this-is-how-to-upgrade-nepals-rural-health" target="_blank">model of hospital management</a> can be replicated.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250414130456_b59dabd4604a24426a55fe91c0e5866b5029858bdb4c4028c331557aeb5408ae.jpg" data-media-id="editor_4" data-image-id="20250414130456_b59dabd4604a24426a55fe91c0e5866b5029858bdb4c4028c331557aeb5408ae" data-rendition-name="original" width="1500" height="1000" loading="lazy" alt="Bayalpata hospital"> <figcaption>Bayalpata hospital in Achham.</figcaption> </figure>  People from not just Achham but surrounding districts, and from as far away as Humla, bring patients to Bayalpata, sometimes walking for days. Some with complicated pregnancies are brought in stretchers, young children with broken arms walk into the emergency, and sometimes there are mass casualties when a tractor or bus falls off a road. And Pathak is always there with his team performing triage, and doing orthopaedic surgeries that would be difficult even in Kathmandu. Recently, his team did a hip replacement at <a href="https://nepalitimes.com/banner/state-of-the-art-rural-hospital" target="_blank">Bayalpata Hospital</a>. Mild mannered, modest, soft-spoken, hard-working, professional are the words families of patients who have been treated at <a href="https://nepalitimes.com/here-now/nepal-s-rural-lifeline" target="_blank">Bayalpata Hospital </a>use to describe Mandeep Pathak. But the surgeon is too busy to let all this get to this head.&nbsp; Asked why he does not emigrate like his peers or get a lucrative position at a private hospital in Kathmandu, Pathak answers simply, without a trace of self-importance, “I do not think I could get the satisfaction or sense of fulfilment anywhere else.” When travelling to attend medical congresses overseas or visit family in Kathmandu, Bayalpata has other doctors to take care of patients, but many wait patiently till Pathak returns for their consultation or surgery.&nbsp; When he returns from seminars abroad after learning the latest skills, Pathak’s suitcases are not full of clothes or presents, but titanium bone implants, external fixation rods, or intramedullary nails to be used in <a href="https://nepalitimes.com/news/altruistic-healthcare-models-in-nepal" target="_blank">surgeries at Bayalpata</a>.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025041414040_5356278472c1eb2b9e4af1d593d6234cc8dc5e5161a8c614197c01abefadbd80.jpg" data-media-id="editor_8" data-image-id="2025041414040_5356278472c1eb2b9e4af1d593d6234cc8dc5e5161a8c614197c01abefadbd80" data-rendition-name="original" width="2048" height="1368" loading="lazy" alt="surgery"> </figure>  Before Bayalpata Hospital was established, most people suffering broken bones had to travel down to Dhangadi or Nepalganj for treatment. No more. Although Pathak’s specialisation is orthopaedic oncology, he is mostly treating fractures and rejoining broken bones.&nbsp; Now as Bayalpata’s Hospital Director, Pathak also has administrative and fundraising duties. He has to take the 10-hour ride down to Dhangadi often to meet various Sudurpaschim ministries to release the hospital’s budget — that is sometimes more difficult than the most complicated surgery. Recently, he had to cancel an appointment with the Chief Minister to rush back to Bayalpata because there was a patient who needed emergency surgery. “I told myself, let me save this patient first, then I will try to save the hospital,” he recalls.&nbsp; Once, when he had to be away for a month on emergency surgery training in the US, the family of a 90-year-old woman who had dislocated her hip after falling from a staircase was waiting for him to return. Her son told Pathak: “Doctor, either put her out of her suffering, or cure her.” Pathak told him it was too dangerous to operate at her age, but the son said his mother was in so much pain it was worth the risk. The operation was touch-and-go, but it was successful. The woman who had been brought in on a stretcher, walked out of the hospital three days after the operation.&nbsp; A few months later, a 27-year-old woman was brought into the ER bleeding profusely from an arm mangled by a thresher machine. Even in that state, she was breastfeeding her baby. Pathak welled up seeing this display of selfless motherhood, as he wheeled her into surgery. She needed three operations, but now has full use of her hand. <div class="embed-block"><iframe width="700" height="415" src="https://www.youtube.com/embed/xJdxLD0hBqo?si=mOpM2R_DsYL88Lfg" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div> It is the sense of achievement from such recovery that keeps Mandeep Pathak here in this isolated village in the middle of nowhere. Bayalpata Hospital has not just saved lives, it also saves families from poverty because they do not have to take sick relatives to expensive city hospitals.&nbsp; In January, a woman was brought to Bayalpata with both hands broken. She said she had taken a fall, but Pathak did not believe her. When alone in the surgery, she finally admitted that her husband had beaten her.&nbsp; It was her husband who had brought her to hospital for treatment, but she refused to file a police report. Pathak quietly put both her arms in casts, thinking about the poverty, patriarchy and injustice in society that he is unable to treat.