Economic news released by SITA on Friday, October 27
Economic Sentiment Indicator Slightly Decreased in October
The economic sentiment indicator (ESI) in Slovakia slightly decreased to 120.5 points in October, losing 0.5 points from September. The monthly decrease resulted from worsened values of the confidence indicator in the retail sector and in construction. Compared to October 2005, the indicator was 10.2 points higher and exceeded the long-term average by 15.2 points, announced the Slovak Statistics Office on Friday.
Confidence Indicator in Industry at Second Highest Level this Year
The confidence indicator in industry in Slovakia achieved its second highest level of this year at 13.3 points in October when it gained 7.3 points from September. All its components positively influenced its development. Demand for industrial products is significantly rising, inventory of finished products is decreasing, and production in the next three months is expected to grow. These results were published in the economic outlook survey in industry that the Slovak Statistics Office released on Friday.
Petrol Prices Dropped by More Than SKK 0.30 as of October 20
As of October 20, the average retail price of 95-octane petrol decreased SKK 0.35 to SKK 37.11 per liter compared with October 10, the Slovak Statistics Office reported. The average retail price of 98-octane petrol was SKK 39.64 per liter, down SKK 0.38. The average retail price of one liter of diesel was SKK 38.29, down SKK 0.03. The average retail price of LPG remained stable at SKK 21.75, spokeswoman for the Slovak Statistics Office Eva Kelemenova informed on Friday.
Czech Energy Group CEZ Plans Expansion in Slovakia
Czech energy group CEZ plans investments in Slovakia into electricity generation capacity as well as distribution. "We are planning to invest a part of our free cash-flow into current as well as new projects. We are also preparing projects to generate electricity from renewable sources," director general of CEZ trade representation in Slovakia Karol Balog told SITA news agency. However, he did not want to specify concrete projects. "The prepared projects are in their initial stages and publicity could harm them," he said.
Industrial Producer Prices in Slovakia Down 1.1 Pct. in September
Industrial producer prices in Slovakia decreased by 1.1 percent over September. Prices of products of industrial producers for the local market fell by 0.7 percent from August. Their development was influenced by a 1-percent decrease in prices of mineral raw materials, 0.8-percent drop in prices of electricity, gas, steam, and heated water, 0.7 percent drop of prices of products of industrial manufacturing. Prices for export fell by 1.5 percent, the Slovak Statistics Office informed SITA on Friday.
Neografia Printing House with Q1-Q3 Sales of SKK 1.505 Bln.
The printing house Neografia, a.s., Martin, considered the most modern printing company in Slovakia, reported sales of SKK 1.505 billion in nine months of this year, up SKK 100 million y/y. The firm generated added value of SKK 377 million and profit of SKK 17 million. Director for strategy Vladimir Srobar said that these figures were moderately lower y/y. The reason was customers' pressure on prices and increased energy and material prices.
Omnia Group with SKK 1.852 Bln. Sales Last Year
The Omnia Group, a.s., Bratislava, is engaged in trade with bearings, white household goods, and cars, reported consolidated sales of SKK 1.852 billion last year, up 15.6 percent. Production costs increased 12.1 percent y/y to SKK 1.406 billion. Omnia generated added value at SKK 491.2 million, up SKK 72.1 million. However, sales of goods dropped 33.9 percent over a year to SKK 84.9 million. The cost of sales dropped 9.4 percent y/y to SKK 91.8 million, informed the company in the electronic version of the Commercial Bulletin on www.epi.sk.
KDH Accuses Education Minister Installing Amateurs to Senior Posts
Education Minister Jan Mikolaj (SNS) is organizing purges in the department, stated former Education Minister and Christian-Democrats' (KDH) deputy chairman Martin Fronc. He has replaced section and department directors with amateurs, continued Mr. Fronc. He informed that since he took up his office, Mr. Mikolaj has already replaced seven directors at the ministry. However, Mr. Fronc ignored the question how Mr. Mikolaj could influence job contests to select new directors. He just said it would be inappropriate if he described how the minister installs his people into vacancies through public contests.
Chemical Industry Feels Threatened by Strengthening Currency
The Association of the Chemical and Pharmaceutical Industry of the Slovak Republic perceives negatively the recent strengthening of the Slovak currency. "For chemical producers that mostly export their output, this development means they are losing their competitive potential and their jobs are threatened," said the president of the association Roman Karlubik. He specified that the strengthening of the Slovak crown by about three percent over the past month means that the income of chemical producers dropped SKK 400 million monthly, which is twice the annual profit of all chemical companies in Slovakia except for oil refineries. This dramatically reduces available income needed for modernization, the removal of old environmental burdens, and the implementation of new EU legislation for the chemical industry REACH. All this is happening in a situation of rising interest rates, which increases the cost of borrowing. Higher inflation is pressing on wages and the costs of materials and energy inputs, the association's president complains.
Slovakia's FOREX Reserves up Almost USD 100 Mln. This Week
Slovakia's foreign exchange (FOREX) reserves reported a growth of USD 99.8 million over the past week to USD 15.4827 billion as of October 25. The reserve assets of commercial banks were solely behind the growth, going up USD 140.1 million in a week to USD 2.4615 billion. In contrast, the reserves of the National Bank of Slovakia (NBS) decreased USD 40.3 million in a week to USD 13.0212 billion, the NBS press department informed SITA on Friday.
Socialna Poistovna Used up SKK 11 Bln. From SPP Privatization
Social security provider Socialna Poistovna has spent so far SKK 11 billion from the privatization of a 49-percent stake in gas utility SPP. The SPP privatization proceeds are destined to cover costs of the introduction of the capitalization pension pillar. Socialna Poistovna spokeswoman Vladimira Pobisova specified that the Finance Ministry should send an additional SKK 8.2 billion to the Socialna Poistovna account by the end of this year. Over SKK 70 billion from SPP privatization proceeds was earmarked to cover the deficit of the pay-as-you-go pension system caused by the introduction of the second pension pillar. According to the Cabinet-approved Socialna Poistovna budget, next year the state should provide the insurer with about SKK 20.2 billion and SKK 22.5 billion in 2008. In 2009, the state should pour into the Socialna Poistovna budget an additional SKK 25 billion, and in 2010, the social security provider should receive SKK 27.7 billion from the state.
SAD Bratislava Sales Dropped 10 Percent in 2005
Regional bus transport company in the Slovak capital Slovenska Autobusova Doprava (SAD) Bratislava, a.s., reported a roughly 10-percent drop in sales of its own products and services from SKK 519.2 million in 2004 to SKK 471.7 million last year. SAD Bratislava slipped into the red last year, but it managed to reduce its losses by SKK 5.3 million to SKK 2.6 million.
Olympus Reports Revenues of SKK 580.3 Mln. in Slovakia in 2005
Olympus, a renowned producer of cameras and audio recording and other special tools for the health sector, science, and industry, reported revenues from goods sold of SKK 580.3 million in Slovakia last year through its representation Olympus SK, s.r.o. Revenues increased over SKK 55 million y/y. Sales of its own products and services were SKK 23.3 million, according to the company.
Mota-Engil Did Not Receive PMU Verdict on Alleged Cartel Agreement
The Portuguese construction company Mota-Engil Engenharia e Construcao is the only company that has not taken over the verdict of Slovakia's Antitrust Office (PMU) related to the second-degree proceedings of the alleged cartel agreement between seven companies in a public tender to construct the D1 Mengusovce-Janovce highway. PMU spokesperson Alexandra Bernathova said that the verdict is not valid, and the Antitrust Office will not release it because not all the involved firms have received it. The companies can file an appeal at a court within two months of the delivery of the verdict.
MONEY MARKET: Only Shortest Deposits Traded at End of Week
The money market closed the week in a calm trading atmosphere. Tatra Banka dealer Jozef Bozek said that only the shortest deposits were traded on Friday. Commercial banks deposited SKK 10.206 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Friday, meeting the minimum reserve requirement for October on a cumulative basis at 104.07 percent. Next week, there should be enough funds in the market for the banks to meet the minimum requirement without refinancing themselves in the NBS.
STOCK MARKET: SAX Index Gains 0.14 Points at End of Week
Slovakia's official SAX share index slightly improved on Friday 0.03 percent or 0.14 points. Shares of the only SAX-base-issue traded on Friday, the Slovak crude-oil refiner Slovnaft, pushed up the SAX index. Turnover on the Bratislava Stock Exchange (BCPB) rose from SKK 21.732 million on Thursday to SKK 34.122 million on Friday, of which SKK 2.417 million fell to share trading.
FOREX MARKET: Profit Taking Weakens Slovak Currency on Friday
The Slovak crown moderately reduced its previous gains. Tatra Banka dealer Jozef Bozek said that the crown opened close to its most recent high against the euro (36.260 SKK/EUR). Trading on Friday was relatively busy. "Both foreign and the local banks took profits, and, consequently, the crown's exchange rate moved up to 36.450 SKK/EUR," Mr. Bozek explained. However, the interest of market-players in buying the Slovak currency continues to persist on the market. Thus, the situation turned later, and the exchange rate stood at 36.330/36.370 SKK/EUR before the close of trading.