Economic news released by SITA on Monday, October 9
Economy Ministry Says Regulator's Independence Preserved
The Economy Ministry says that its amendment to the law on the regulation of network industries is aimed at creating more room for public control of the regulatory office. Ministry spokesman Branislav Zvara suggested that the amendment does not intend to scrap the independence of the regulator but that quite the opposite is true. He added that if the regulator were under public control, it would do its work more precisely. When it will observe the rules, it has no reason to fear. "This is that public control," said Mr. Zvara.
Duslo Sala With 2006 Sales of SKK 10.3 Bln.
Chemical producer Duslo a.s., Sala, reported 2005 sales of its own products and services of almost SKK 10.3 billion, up 12.6 percent y/y. Production consumption increased 15.4 percent y/y to SKK 8.1 billion. The company generated added value of SKK 2.6 billion, up SKK 563.3 million y/y.
Construction Output Growth Accelerated in August
Output of Slovakia's construction industry grew by 21.6 percent on a year-on-year basis to SKK 14.3 billion in August. In July the y/y growth was 17.5 percent. The development in August results from higher growth in new construction, modernization and reconstruction reporting an increase by 27.6 percent, and construction output in maintenance and repair works by 2.3 percent. Construction output abroad by Slovak companies did not reach last year's level and kept shrinking, by 5.4 percent y/y in August, the Slovak Statistics Office informed SITA on Monday.
Finance Ministry to Cover Costs Related to Pension Second Pillar
The Finance Ministry agreed with representatives of social security provider Socialna Poistovna (SP) to cover the deficit caused by the launching of the second pension pillar through the state financial assets by 2010. This stems from SP's draft budget for 2007, which should be on the Cabinet's agenda on Wednesday. A total of SKK 114.6 billion in state financial assets should be allocated for covering costs related to the introduction of the retirement pension pillar in 2006 to 2010. Over SKK 70 billion coming from the privatization of a 49 percent stake in gas utility Slovensky Plynarensky Priemysel, a.s., is earmarked for covering debts related to the introduction of the second pension pillar. However, these funds should rise next year thanks to a long-term surplus in the management of the government privatization agency the National Property Fund (FNM).
Industrial Output in Slovakia Up 13.7 Percent y/y in August
The growth rate of industrial output in Slovakia accelerated to 13.7 percent y/y in August 2006, compared with 8.3 percent in June. Growth in August resulted from a 17.2-percent increase in industrial manufacturing. Output in mining and mineral extraction, however, decreased 11.7 percent, and electricity and natural gas and water production and distribution was 3.7 percent lower y/y, the Slovak Statistics Office informed SITA on Monday.
SZP With H1 2006 Insurance Premiums of SKK 6.496 Bln.
Health insurer Spolocna Zdravotna Poistovna, a.s. (SZP), collected nearly SKK 6.496 billion in insurance premiums in H1 2006. Total revenues were over SKK 6.603 billion at the end of June. Of this, the insurer transferred SKK 1.905 billion to a special redistribution pool for health insurance companies. Following this, revenues were SKK 4.698 billion, informed SZP spokesperson Marcela Barusova.
Soitron Hired 200 New IT Experts
The outsourcing IT company Soitron, a.s., has created 200 new jobs for IT experts in the last year. These positions were created under the so-called third line of client support for HP. Soitron informed that IT specialists secure the administration of a complicated system. The project of the third line team was started in February 2005.
Wustenrot Insurer Criticizes Income Law Revision
The insurance company Wustenrot Poistovna, a.s., criticizes a draft revision to the income law that narrows the tax relief of employers. The currently valid legislation enables employers to include into tax expenditures contributions to their employees under supplementary pension insurance as well as within savings for some exact purposes and life insurance up to 6 percent of the total wages of their employees. The new law reduces this only to supplementary pension insurance.
Dairy Gemerska Mliekaren Plans 2006 Total Sales at SKK 710 Mln.
The Dairy Gemerska Mliekaren, s.r.o., Rimavska Sobota, plans to close 2006 with total sales of over SKK 710 million, up from SKK 692 million in 2005. Company economist Jozef Jasic told SITA that it expects the volume of raw milk it plans to buy this year at 57 million liters, up roughly 800,000 liters. Profit is projected at SKK 1 million, an improvement over taxed profit of SKK 212,000 from 2005.
Slovakia Reports 56,328 New Car Registrations as of September
Through September of this year, 56,328 new passenger cars and small utility vehicles up to 3.5 tons were registered in Slovakia, up 9.08 percent y/y, police statistics suggest. In September alone, 5,810 vehicles were registered in this category, up 7.67 percent y/y. "If this trend continues, around 72,000 new registered cars annually could be reached. However, this is still not enough for Slovakia to get out of the position of one of the EU countries with the smallest number of cars per 1,000 inhabitants," informed Maria Novakova from the Automotive Industry Association (ZAP).
Caplovic Considers eGovernment Biggest Priority
Deputy Prime for Knowledge-based Economy, European Affairs, Human Rights, and Minorities Dusan Caplovic, who should supervise the operational program Development of the Information Society, considers eGovernment to be a priority of this program. However, he says that it is early to speak about the priorities of individual operational programs. He wants to ensure that eGovernment, which means government's use of information and communication technology to exchange information and services with citizens, businesses, and other arms of government, works well, without being too expensive. The operational program Development of the Information Society will be in hands of the Cabinet Office, according to the approved the National Strategic Reference Framework for 2007 to 2013. Other priorities of the operational program Development of the Information Society should be support of education, science, research, education, and libraries.
STOCK MARKET: SAX Index Weakens Significantly
The Bratislava Stock Exchange (BCPB) registered relatively significant losses on Monday. Decreasing share prices of the power engineering company SES Tlmace and OTP Banka Slovensko pulled down the official SAX share index 1.55 percent or 6.37 points to 404.13 points. Turnover on the Bratislava Stock Exchange (BCPB) rose from SKK 974.4 million on Friday to SKK 1.048 billion on Monday. However, shares barely were traded, and a mere SKK 149,600 fell to their transfers.
PSS Provided SKK 10.961 Bln. in Housing Support in 9 Months
The house construction savings bank Prva Stavebna Sporitelna, a.s. (PSS), provided SKK 10.961 billion for housing purposes in nine months of 2006, a slight y/y rise of about 7 percent. According to further information PSS released, the bank has provided SKK 130.819 billion in housing support since 1993. Clients have used the biggest portion of this (SKK 72.136 billion) for reconstruction, and they used SKK 35.628 billion on apartment purchases. Clients used SKK 20.985 billion for apartment construction. The rest of the sum covered other construction purposes.
Lower Motor Fuel Prices May Help Improve Inflation
Bank analysts assume that September inflation data, which the Statistics Office is scheduled to publish on Wednesday, will reflect a steep drop in crude oil and motor fuels prices. VUB bank analyst Martin Lenko predicts that the consumer-price growth will slow to 4.9 percent y/y in September whereas it probably reached this year a high of 5.1 percent in August. "Lower motor-fuel prices, as well as base effect, which should gradually decrease the y/y inflation to 4 percent in the upcoming months until the end of this year, should slow down the dynamics," said Mr. Lenko for SITA news agency. The dynamics of core inflation also should slow moderately. Bank analysts expect this y/y deceleration to represent one-tenth of a percentage point to 2.7 percent in September.
Civil Engineering Firm Eurovia-Cesty Reports 13% Raise in H1 Sales
Sales of products and services of civil engineering company Eurovia-Cesty rose 13.2 percent y/y to SKK 705.2 million during H1 2006. Construction of the D1 highway stretch Mengusovce-Janovce, with costs projected at SKK 1.052 billion, was the company's most important project. Other significant projects included works on the D1 highway stretch Svinia-Presov with costs projected at SKK 356 million, works on the R2 dual-carriage way close to Ozdany worth SKK 130 million, works on the sewage networks in Martin and Dolny Turiec with expenditures planned at SKK 72 million, and works on the fourth phase of the road I/73 between Svidnik and Vysny Komarnik worth SKK 36 million. This stems from data that the company's financial director, Jan Kravcak, provided to SITA.
Only 27,000 People Used Chance to Avoid Penalties for Overdue Taxes
The interest in using the possibility to avoid penalties for overdue gift, inheritance, and real-estate transfer-taxes that already have been canceled was lower than the Finance Ministry originally expected. Tax offices forgave penalties to those debtors who settled the taxes by the end of September. About 27,000 taxpayers used this possibility. "Thus, almost SKK 270 million from the canceled taxes flew into the state treasury," spokesperson of the tax administration Adriana Pleskova informed.
Mazda Sets up Sales Companies in Slovakia and Czech Republic
Japanese car producer Mazda Motor wants to look after the sale of its production in Europe, which is also part of its strategy. Thus, Mazda Motor Europa has set up sales companies in Slovakia and the Czech Republic, the Internet news service CEE.BusinessNews informed. In Slovakia, Mazda operates as an organizational branch under the name Mazda Motor Logistics Europe NV with its headquarters in Bratislava.
MONEY MARKET Opened Week With Calm Trading
The interbank market opened this week with calm trading. UniBanka dealer Jozef Hempfinger said that mostly the shortest deposits were traded on Monday because of a liquidity deficit in the sector. Commercial banks deposited SKK 10.76 billion in their reserve accounts in the National Bank of Slovakia (NBS) at the beginning of the week, meeting the minimum requirement for October on a cumulative basis at 52.4 percent. The central bank's regular two-week sterilization repo tender will be held on Tuesday. Its results will be decisive for the deposit prices on the short end of the yield curve. According to Mr. Hempfinger, the banks should reduce their bids in the repo tender on Tuesday approximately SKK 15 billion, compared with the maturing volume of SKK 183.292 billion, to replenish the funds in the sector.
FOREX MARKET: Crown Moves in Narrow Band
The Slovak currency opened this week with calm trading. HVB Bank dealer Marian Sulko commented that the exchange rate of the Slovak crown against the euro fluctuated in a narrow band between 37.070 SKK/EUR and 37.120 SKK/EUR over the day. Trading on the surrounding markets also was relatively calm, and no trading was performed in the United States because of a public holiday. Over the next few days, the crown's exchange rate may move somewhere between 37.000 SKK/EUR and 37.150 SKK/EUR, Mr. Sulko assumes.