Summary of economic news released on Wednesday, February 28
Slovakia`s Harmonized Inflation Slowed Down to 2.2 Percent in January
The year-on-year inflation rate in Slovakia measured by the European Union's harmonized index of consumer prices (HICP) reached 2.2 percent in January, down 1.5 percentage point y/y. Measured by EU methodology consumer prices in Slovakia grew 0.5 percentage points in January compared to the previous month, while they increased 0.1 percentage points in December compared to November, reported the Slovak Statistics Office on Wednesday. Slovak methodology shows inflation rate of 3 percent in January.
Economic Sentiment Indicator Moderately Grew over February
The economic sentiment indicator in Slovakia continued improving also in February. The Statistics Office data show it going up 0.3 percent in the second month of 2006 to 124.7 points due to positive development of the confidence indicator in the construction sector. The economic sentiment indicator was 14.3 percentage points higher in a year-on-year comparison and exceeded the long-term average by 18 percentage points, announced the Slovak Statistics Office on Wednesday.
Telefonica O2 Slovakia Wants at Least 5 Pct. of the Market this Year
The third mobile operator in Slovakia, Telefonica O2 Slovakia, wants to win at an at least five percent share on the Slovak mobile market this year, reads the website of the parent company of the Slovak operator, Telefonica O2 Czech Republic. According to a rough calculation based on the current approximately 100-percent mobile penetration, this represents over 250,000 customers. Over 200,000 active clients were using services of Telefonica O2 Slovakia by the end of February, the company's management informed in Bratislava on Tuesday evening. The others from over 600,000 potential clients who have registered within the O2 Jednotka campaign have a possibility to activate their SIM cards by March 31. From Wednesday, February 28, the company also started to offer prepaid services to other customers, while the offer for post-paid clients should come in the second quarter.
Slovakia's Current Account Deficit Reached SKK 129.6 Bln. Last Year
According to preliminary data of the National Bank of Slovakia (NBS), the deficit on the current account of the balance of payments for the whole of last year was SKK 129.6 billion. The c/a deficit thus widened by SKK 2.7 billion compared with 2005. The trade balance gap slightly deepened over December, much as the deficit in the balance of current transfers and the balance of receipts. On the other hand, improvement in the balance of transport services, as well as higher income from tourism within the balance of services contributed to an SKK 1.6 billion monthly reduction of the current account deficit, the NBS informed SITA on Wednesday.
NBS Reports Slovak Crown Lost 2 Pct. Against the Euro in January
The Slovak currency weakened against its reference currency the euro by 2 percent in January when it moved from 34.573 SKK/EUR to 35.279 SKK/EUR. However, the average exchange rate appreciated by 0.9 percent. The crown diverged from its parity of 38.455 SKK/EUR most significantly on January 4, when the exchange rate was fixed at 34.321 SKK/EUR, meaning a 10.75-percent appreciation from the central parity. This information comes from the January report of the National Bank of Slovakia (NBS). The central bank writes in the report that made no direct intervention on the FOREX market in the first month of the year.
Central Bank's FOREX Reserves Up to USD 640.9 Mln. in January
Aggregate FOREX reserves of the National Bank of Slovakia (NBS) reached USD 14.005 billion by the end of January 2007, which represents a monthly increase of USD 640.9 million. Behind this monthly growth is a positive balance of receipts and expenditures when an USD 829 million surplus partly compensated for negative exchange rate differences of USD 179.1 million as the result of USD/EUR cross rate changes in the monitored period, according to data released by the central bank on Wednesday.
Eurostat Reports Slovakia's Jobless Rate at 11 Percent in January
A survey by Eurostat, the European Union's Statistical Office, shows that the seasonally adjusted unemployment rate in Slovakia reached 11 percent in January, down 0.8 percentage points from December 2006. Slovakia still reports the second highest jobless rate among EU countries. Only Poland had worse results with a 12.6-percent unemployment rate. However, Slovakia belongs to the countries with the most significant y/y drop in jobless rate in the EU, since the jobless rate in Slovakia reached 14.5 percent in January 2006.
Doppelmayr Ropeway Manufacturer to Build a New Plant in Kechnec Park
Austrian ropeway manufacturer Doppelmayr will build in the Kechnec industrial park in eastern Slovakia a new plant and a sale center, focused on provision of services to customers in Central and Eastern Europe. The company wants to invest EUR 6.3 million into the new plant. It should manufacture cableway towers and masts, as well as steel constructions of stations and some cable-car components. Doppelmayr representatives and Kechnec Mayor Jozef Konkoly informed media about the plans at a news conference on Wednesday.
Industrial Producer Prices in Slovakia Down 1.2 Pct. in January
In January industrial producer prices in Slovakia decreased 1.2 percent from the previous month, the Slovak Statistics Office reported on Wednesday. Prices of industrial producers for the local market dropped 0.5 percent from December. Their development was influenced by a 2.2 percent decrease in prices of mineral raw materials, 0.6 percent drop of industrial manufacturing and a 0.3 percent drop in prices of electricity, gas, steam, and heated water. Prices for export compared with December 2006 fell by 1.7 percent.
SLSP Consolidated Profit Rose 8 Percent to SKK 3.86 Bln. Last Year
The largest bank in Slovakia, Slovenska Sporitelna, a.s. Bratislava (SLSP), reported a consolidated taxed profit of SKK 3.86 billion for last year, up 8 percent y/y. Stefan Maj, the deputy chairman of the SLSP board of directors said that the group recorded a considerable increase in net interest income that went up 12 percent y/y to SKK 8.866 billion. On the other hand, net income from fees and commissions went down 3 percent y/y to SKK 3.075 billion. Mr. Maj sees behind the decrease changes to the bank's business policy and lowering of certain fees. However, net income from business operations increased 35 percent y/y to SKK 777 million. Operating profit the SLSP group grew 12 percent y/y to SKK 5.828 billion. Head of the board of directors and SLSP director general Regina Ovesny-Straka said that Slovenska Sporitelna has strengthened its position of the biggest and most profitable bank.
Insurers Believe New Legislation Would Worsen Healthcare Availability
The Association of Health Insurers (ZZP) issued a warning claiming that when parliament approves in the current form of the proposed legislative changes to the health insurance system, it would deteriorate quality of and accessibility of healthcare in Slovakia. ZZP executive director Eduard Kovac said that the proposed changes will not help patients. He rules out that the new legislation could increase payments from health insurers to health services providers, reduce time patients spend waiting for treatment and even he does not expect more financial sources for the health sector as a result of legislative changes. On the other hand, Mr. Kovac is sure that the measure will increase red tape in the sector. He therefore asks why the ministry proposes the changes.
Kia Motors Slovakia will Launch Second Shift in March
Kia Motors Slovakia car assembly plan near Zilina will launch the second shift in March although not enough workers have been recruited yet to fill all vacancies. Kia Motors Slovakia spokesman Dusan Dvorak informed that the company still needs around 150 employees, chiefly operators for assembly lines, the welding shop, and supervisors. "We do not have any serious problems with filling other vacancies so far," said Mr. Dvorak. Over hundred new employees will take up jobs this week. At present the company has 1,850 people on its payroll.
Zdravotna Poistovna Union Recruited Most Clients this Year
The health insurance company Zdravotna Poistovna Union, launched last year, was the most successful when recruiting new health insurance policyholders. Slovakia's biggest health insurer, the state-owned Vseobecna Zdravotna Poistovna (VsZP) reported the biggest outflow of its clients as of January 1, 2007. The chairman of the Healthcare Supervision Office (UDZS) Richard Demovic said this on Wednesday. The UDZS was able to identify changes in the number of health insurance policies valid as of the start of 2007 only after the insurance companies processed January premiums until the deadline of February 25.
January Harmonized Inflation Slightly Above Expectation of the NBS
January's harmonized index of consumer prices in Slovakia exceeded moderately expectations of the central bank. The year-on-year inflation rate in Slovakia measured by the European Union's harmonized index of consumer prices (HICP) reached 2.2 percent in January, down 1.5 percentage point y/y. Core harmonized inflation represented 1.8 percent in comparison with 2.5 percent in December. Consumer prices in Slovakia grew 0.5 percentage points in January compared to the previous month while January's core inflation reported the same monthly growth.
Ministers and Enel will Talk about Gabcikovo Rent Contract
The Cabinet on Wednesday approved authorization for the prime minister and the ministers of environment and economy to hold talks with Slovakia's dominant power producer Slovenske Elektrarne (SE) about a possible contract termination and filing a complaint with regard to the rent of the Gabcikovo waterworks. "A legal analysis proves that there are reasons for withdrawal from this contract as well as filing a complaint demanding it to be declared invalid," Prime Minister Robert Fico said after the Cabinet's session on Wednesday.
Q1 Revenues of SkyEurope Rose 27 Percent
Slovak low-cost airline SkyEurope Airlines reported total revenues of EUR 33.6 million over the first quarter of the current business year that ended on December 31, 2006. This is an increase of 27 percent y/y. The company also recorded an improvement of another financial indicator when it showed loss before interests and tax of EUR 12.2 million compared with EUR 14 million from the first quarter of the previous business year.
MONEY MARKET: Banks Meet February Minimum Reserve Requirement
Commercial banks managed to meet the minimum reserve requirement the central bank prescribed for them for February. VUB's Andrej Ungvarsky said that banks deposited SKK 38.261 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Wednesday, meeting the reserve requirement on a cumulative basis at 100.2 percent. Some bank had to refinance itself in the NBS to meet the limit because the liquidity surplus in the sector was only about SKK 500 million and as much as SKK 1.314 billion ended up in the NBS one-day sterilization. Two-week repo tenders of the NBS were settled on Wednesday when maturing SKK 171.385 billion returned and SKK 169.284 billion from the repo tender on Tuesday left the interbank market.
Healthcare Supervision Office Confirms SKK 3 Mln. Fine for ZPU
The Healthcare Supervision Office (UDZS) has punished the health insurance company Zdravotna Poistovna Union with a fine of SKK 3 million for its deceptive promotional campaign and insufficient cooperation. UDZS chairman Richard Demovic informed about the fine at a press conference on Wednesday. Mr. Demovic specified that SKK 2 million is a fine for improper promotion because the insurer offered to its potential clients benefits it was unable to secure. The office fined the insurer SKK 1 million because it did not cooperate with the office at all and did not provide documents necessary for carrying out its supervision work.
STOCK MARKET: SAX Index Gains 4.69 Points Midweek
The value of Slovakia's official SAX share index changed on Wednesday for the first time this week. Shares of the power-engineering firm SES Tlmace pushed up the SAX index 1.14 percent or 4.69 points to 417.56 points. Turnover on the Bratislava Stock Exchange (BCPB) declined from SKK 497.614 million on Tuesday to SKK 88.848 million on Wednesday with SKK 6.861 million in share trading.
New State Representatives Appointed to Slovenske Elektrarne Board
Slovak dominant power producer Slovenske Elektrarne (SE), a.s., has new members of the board of directors and the supervisory board representing the state as the minority shareholder in the company. The spokesperson for SE, a.s. informed SITA after an extraordinary general meeting of SE that Anton Masar and Slavomir Brudnak became new members of the SE board of directors. They replaced Miroslav Wollner and Pavol Ponc. Eduard Strycek became the new head of the SE supervisory board, replacing Lubos Sevcik in the post. The extraordinary general meeting also elected Milan Skultety as a new member of the supervisory board. He replaced Pavol Konstiak in the post.
FOREX MARKET: Crown Strengthens after Initial Losses
The Slovak currency moderately improved on Wednesday. The crown initially lost a few hallers from the opening 34.55/34.60 SKK/EUR because of low liquidity. When regular trading started, the crown began to strengthen supported by regional influences. Tatra Banka's Jozef Bozek said that the crown's exchange rate against the euro stood at 34.45/34.49 SKK/EUR before the close of trading.