Economic news released by SITA on Tuesday, Feburary 13
Slovak Economy Grew 9.5 Percent in Real Prices over Q4 2006
Slovak economy preserved its sharp growth over the last three months of 2006. According to Slovakia's Statistics Office flash estimate, the Q4 GDP growth was 9.5 percent y/y, while in the third quarter of last year Slovakia's economy grew 9.8 percent in real prices. Slovakia's economy grew 11.4 percent in current prices. Slovak economy generated a gross domestic product of SKK 438.4 billion in the period between the beginning of October and the end of December.
Clothing Maker Ozeta Neo will Lay Off 870 Employees
The biggest men's clothing maker in Slovakia Ozeta Neo, a. s., Trencin, which is owned by the private equity group Penta, will lay off 870 employees as of the end of March. One of Penta's partners Jozef Spirko informed that the company's board of directors decided on the redundancies on Friday last week and announced this decision to employees on Monday. Ozeta Neo will shut down its plants in Trencin and Skalica, whereas plants in Topolcany and Tornala will stay open. After the layoffs, Ozeta Neo should have 1,500 people on its payroll.
Employment in Slovakia Up 2.2 Percent y/y in Q4 2006
Total employment in Slovakia reached 2,155,200 persons in the fourth quarter of last year. According to a flash estimate of the Slovak Statistics Office, employment grew 2.2 percent from the same period of the previous year. Total employment after a seasonal adjustment amounted to 2,145,000 persons, which is 2.1 percent more than in the comparable period of the previous year.
Antitrust Office Approves PM Zbrojniky's Takeover by Penta
The Antitrust Office (PMU) approved the concentration of one of the biggest meat-processing companies in Slovakia, PM Zbrojniky, a.s., Banska Bystrica, and Penta Investments Limited registered in Cyprus. According to information published by the PMU, Penta thus acquired direct control over the meat-processing company based on a share purchase contract. With regard to the fact that Penta Investments Limited and PM Zbrojniky are involved in different fields of business which are unrelated, the office came to the conclusion that the examined concentration is a concentration of conglomerate character.
Banks Earned a Preliminary Pretax Profit of SKK 19.4 Bln. Last Year
Preliminary figures show that the banking sector in Slovakia closed last year with an aggregate pretax profit of SKK 19.4 billion. Most of banks ended the year in positive territory when only two banking houses posted a loss. The share of three biggest Slovak banks i.e., Slovenska Sporitelna, VUB Banka, and Tatra Banka on the aggregate pretax profit was 68 percent. Prva Stavebna Sporitelna home savings bank also exceeded a SKK 1 billion level of profit. On the other hand, CSOB Stavebna Sporitelna home savings bank closed last year SKK 16.7 million in red, since it decided to form additional provisions to cover credit risk.
New Savers are Entering the Second Pillar of the Pension Scheme
Spokesperson for social security provider Socialna Poistovna Vladimira Pobisova informed that 20,113 persons have joined mandatorily the capitalization pillar of the old-age pension saving scheme since the end of June of 2006. Out of the total number of that, the company had selected a licensed pension-fund management company (DSS) for almost 7,649 persons. These are savers who did not sign a contract with any of the six licensed pension-fund management companies operating in Slovakia within 30 days since based on the respective law they were obliged to enter the second pillar of the pension scheme as compulsory pension savers.
Slovakia Reports 4,773 New Car Registrations in January
Police statistics report 4,773 new registrations of passenger cars and small commercial vehicles up to 3.5 tons in Slovakia in January, announced the Automotive Industry Association (ZAP). Compared with the same period of last year this translates into a drop of 1.77 percent.
Finance Minister Says Euro Introduction will Benefit Slovak Economy
On Tuesday, Slovakia's Finance Minister Jan Pociatek stated that for Slovakia any delay in adoption of the euro for later than the planned 2009 would not be beneficial. The minister addressed a seminar in Bratislava on the process of Slovakia's preparations for introduction of the euro. He said that the contribution of the euro introduction to Slovakia's economic growth is estimated at 0.7 percentage points during the next fifteen years.
Prime Minister Takes a Clear Positive Stand to Euro Introduction
Prime Minister Robert Fico took the floor at a seminar in Bratislava on the process of introducing the euro in Slovakia. He said that the euro adoption brings about far more advantages to Slovakia than disadvantages and thus it has become the core point of the current government's program. He said that if his team were convinced about the opposite, then they would have enough courage to make another decision. The prime minister underscored that introducing the euro as the national currency would eliminate exchange-rate-related risks, meaning considerable support to further economic development of the country given its considerably open economy.
Regional Utilities in Eastern Slovakia Sign a Cooperation Agreement
Representatives of the regional water utility Vychodoslovenska Vodarenska Spolocnost, a.s., Kosice (VVS) and the regional electricity distributor Vychodoslovenska Energetika, a.s., Kosice (VSE) signed a cooperation agreement on February 13. In this way, the companies want to increase effectiveness, improve quality of services provided to clients, and cut costs. VSE director general Norbert Schurmann and VVS director general Stanislav Hreha informed at a press conference on Tuesday that the agreement specified fields of joint activities.
Economic Growth in Slovakia Last Year was Highest Ever
The growth of Slovakia's economy during the last quarter of 2006 exceeded expectations of analysts. After the year-on-year growth of 9.8 percent in the third quarter of 2006, the country's economy grew 9.5 percent in the last quarter of the year. The Slovak Statistics Office revealed its flash estimate on Tuesday, February 13. It will publish the detailed structure of economic growth in 2006 on March 6. "Investments and net exports might have brought a positive surprise in comparison with our original estimate," thinks Slovenska Sporitelna analyst Maria Valachyova. She added that the figures of the Statistics Office indicate that Slovakia's GDP rose 8.2 percent in real terms in 2006.
SAD Bratislava Transport Firm Changes its Name to Slovak Lines
Regional bus transport operator in the Slovak capital, Slovenska Autobusova Doprava (SAD), Bratislava, a.s., will change its trade name to Slovak Lines, a.s., as of mid-February. "The change of the trade name is to differentiate the company from other bus transporters. "We want to highlight the fact that we are not some anonymous SAD company," said the company's director general Peter Sadovsky.
INVESTING: Pension Funds Managed SKK 30.26 Bln. Last Week
The net value of policyholders' assets in licensed pension fund management companies in Slovakia (DSS) reached SKK 30.26 billion as of last Friday. The value of assets in pension funds went up around SKK 27.2 million w/w. As of February 9, almost SKK 19.92 billion was in growth funds, nearly SKK 9.12 billion was in balanced funds, and almost SKK 1.23 billion was in conservative funds.
MONEY MARKET: Central Bank Accepts All Bank Bids in its Regular Repo
Bank bids in the central bank's regular sterilization repo tender on Tuesday totaled SKK 171.385 billion. Contrary to the previous week, the National Bank of Slovakia (NBS) accepted all of them, UniBanka dealer Jozef Hempfinger informed SITA. The minimum yield was 4.3 percent p.a., the average 4.72 percent p.a. and the ceiling reached 4.75 percent p.a. Therefore, a smaller volume will return to the market after two weeks on Wednesday, particularly SKK 168.585 billion. "Market liquidity will decrease even further after settlement of cash flows from repo tenders and the market will thus remain in a liquidity deficit," stated the dealer.
STOCK MARKET: SAX Index Recovers Losses from Monday
The Bratislava Stock Exchange (BCPB) recovered on Tuesday its losses registered on the previous day. Slovakia's official SAX share index strengthened 0.66 percent or 2.78 points to 422.78 points owing to shares of the power-engineering company SES Tlmace. Turnover on the Bratislava Stock Exchange (BCPB) increased from SKK 178.616 million on Monday to SKK 707.537 million on Tuesday with SKK 1.154 million in share trading.
FOREX MARKET: Slovak Crown Reports Significant Gains
The Slovak crown registered significant gains towards the euro during trading on Tuesday. It opened at 34.67/34.71 SKK/EUR, and it started appreciating in the morning. "The Slovak currency strengthened as a reaction to Slovakia's GDP growth data, and, later, the fact that the National Bank of Slovakia (NBS) accepted all bank bids in its repo tender also helped the crown improve," Tatra Banka dealer Boris Somorovsky commented. These two factors encouraged foreign banks to buy Slovak currency in large volumes, which pushed down the crown to 34.33 SKK/EUR.
Situation in the Clothing Industry in Slovakia is Worsening
The situation in the Slovak clothing industry is bad, and after the closure of the Trencin-based plant Ozeta Neo, other companies may face the same fate. The boss of the local trade unions, Pavol Heles, said this on Tuesday in Trencin. According to him, it is necessary to take steps to save the clothing industry in Slovakia. He did not specify, saying that they are up to those with competence.
Slovakia's GDP Growth Figures Confirm Estimates of the Central Bank
Slovakia's real GDP growth in Q4 2006 of 9.5 percent confirmed the last estimates of the National Bank of Slovakia (NBS). However, the NBS Governor, Ivan Sramko, claims, it is too soon to comment on these figures and it is necessary to wait for a detailed analysis. Nevertheless, he assessed positively the fact that inflation in Slovakia does not significantly go up together with the high GDP growth. "We have already announced during the assessment of the record-breaking Q3 data that growth that would cause overheating of Slovakia's economy and inflation increase would be a problem for us," Mr. Sramko said on Tuesday.
FinMin Updates its Prognoses for the General Government Income
The Slovak Finance Ministry has updated its prognoses of the general government income for the coming years. When calculated in line with the ESA 95 methodology, the state and regional governments should collect from people and companies almost SKK 500 billion in taxes and levies in 2007. The ministry prognosticates tax income at almost SKK 308 billion. The state is expected to collect SKK 132.1 billion from economically active citizens in social insurance premiums. Collected healthcare insurance premiums should make up the rest of SKK 59.4 billion.
Slovakia and Russia Will Discuss New Gas Import Prices
Slovak Prime Minister Robert Fico is convinced that even if the Russian Federation raises natural gas prices, Slovakia will manage such a situation, and it will not endanger meeting the inflation criterion necessary for joining the Eurozone in 2009. "I am not able to foretell the decision of the Russian party, let us wait for it. I believe that we will make it together even if the Russian partners decide to slightly raise the prices," he told the media. Prime Minister Fico said he intends to deal with the issue of future gas prices during his official visit to Russia scheduled for April 3 and April 4, 2007.
INVESTING: Net Sales of Mutual Funds at SKK 661.3 Mln. Last Week
Investors continue depositing finances in open-end mutual funds that members of the Slovak Association of Asset Management Companies (SASS) manage. Last week's net sales of these funds accounted for SKK 661.3 million. Money market funds attracted the biggest interest of investors, reporting net sales of SKK 421.6 million. As much as SKK 273 million flew into SKK equity funds, the group of guaranteed, secured and real estate funds had an influx of SKK 98.7 million, and a total of SKK 60.6 million went to master funds.