Economic News SUMMARY, January 29

30.01.2007, 05:56

Economic news released by SITA on Monday, January 29

VUB Provided SKK 10.85 Bln. in Housing Loans Last Year
VUB bank, a.s. provided housing loans totaling SKK 10.85 billion last year. Mortgages made up the biggest portion when consumer loans for housing purposes amounted to a mere SKK 620 million. In 2006, the bank provided more than 11,000 mortgage loans at a total of SKK 10.23 billion. It is approx. the same figure as a year ago. VUB representatives say that many clients were waiting to get mortgages with reduced interest rates. The bank estimates that this year subsidized mortgages could make up 25 percent of a total of mortgage loans approved in 2006.

Confidence Indicator in Industry at Highest Level since 1993
The confidence indicator in industry in Slovakia achieved its highest level since 1993 in January when it reached 17.3 percentage points. It gained 8.3 points from December. Its development was considerably influenced by the expected production growth in the next three months and a moderate decrease in inventory of finished products. These results were published in the economic outlook survey in industry that the Slovak Statistics Office released on Monday.

Health Sector Employees Again Threaten with a Strike
Health sector employees again threaten to go on strike unless the government starts solving the question of their salaries. "Our trade union will hold a conference in March and if the Health Ministry's' attitude to settlement of this problem does not improve, we could be back to where we were a year ago," the chairman of the Slovak Trade Union of Healthcare and Social Services (SOZ), Andrej Kucinsky told a news conference on Monday. The unions demand salaries for doctors to increase to three-times the national average wage and for nurses up to 1.5-times the national average within four years. "Legislative changes must be made to reach this level. However, the ministry seems to do very little to change the legislation that would enable meeting this long-term target. We have found no compromise with the ministry in this issue yet," stated Mr. Kucinsky.

Slovenske Elektrarne Prepares to Modify Turbines at NPP V2
Slovakia's dominant power producer Slovenske Elektrarne, a.s. (SE) is preparing modifications on four 220-megawatt turbines of the V2 nuclear power plant in Jaslovske Bohunice, stems from the data published by the company. The goal of the modification of the turbines is to reduce specific consumption of heat. Following the turbines' modification and gradual implementation of a new fuel cycle in nuclear reactors of the power station, turbine generators will be able to permanently run at 107 percent of heat output of the reactor. Companies interested in wining this contract can apply until February 19.

Slovakia Imported Wine for SKK 782.9 Mln. in Ten Months of 2006
A total of 255,900 hectoliters of wine worth SKK 782.9 million was imported to Slovakia over ten months of last year, while 178,900 hectoliters of wine worth SKK 583.5 million was imported to Slovakia in the same period of 2005. The import of wine to Slovakia increased by 43 percent y/y. In October 2006 import of wine rose by 33.4 percent in comparison with October 2005. Wine was imported chiefly in containers with a volume exceeding two liters. Slovakia recorded a deficit at SKK 548.1 million in foreign trade with wine during January and October 2006. Slovakia imported from EU countries 96.5 percent of all imported wine, i.e. 246,900 hectoliters last year. On the other hand, Slovakia exported 60,200 hectoliters of wine worth SKK 234.8 million by the end of October. Of this, 89.2 percent of the total export went to the Czech Republic.

Labor Office Informs about Results of its Employment Policy Programs
The National Labor, Social Affairs, and Family Office (UPSVR) informed on Monday that around 240,000 job seekers make use of the chance to join their projects within the active labor market policy program every year. UPSVR has been carrying out national projects aimed at increasing employment chances and supporting employment since of February 1, 2004. Vieroslava Rachelova from the National Labor Office informed that over SKK 8.5 billion was allocated for the realization of the national projects within operational programs, and SKK 5.6 billion has already been drawn.

Minister Says Slovakia should Build New Power Generation Capacities
Slovakia's Economy Minister Lubomir Jahnatek said that Slovakia has to count with construction of new power generation sources. If the country wants to preserve power balance it is not enough only to increase capacities of existing production but also to build new ones. Mr. Jahnatek addressed a meeting of the British Chamber of Commerce on Monday.

Volume of Deposits in Slovenska Sporitelna Up 18 Pct. y/y in 2006
Total deposits in the largest bank in the Slovakia, Slovenska Sporitelna (SLSP), a.s., grew 18 percent to SKK 210.2 billion in late December 2006. Of this, personal deposits accounted for SKK 132.2 billion, which is an increase of 11.7 percent compared with the end of 2005. Within personal deposits, time deposits rose SKK 12.7 billion y/y to SKK 85.6 billion, SLSP informed SITA.

Market Does not Expect NBS to Change Interest Rates on Tuesday
The market currently does not expect the Bank Board of the National Bank of Slovakia (NBS) to change key interest rates at its meeting on Tuesday. A member of the NBS Bank Board, Ludovit Odor, indicated the end of the cycle of tightening monetary policy last week when he said that the central bank is currently analyzing the possibility of a moderate decrease of key interest rates. Slovenska Sporitelna analyst Maria Valachyova assumes that the NBS will decide to ease its monetary policy as late as at the end of the year. It will be clearer in that time whether the country meets the Maastricht inflation criterion. "Oil prices are one of the main risks," stated Ms. Valachyova. UniBanka analyst Viliam Patoprsty also believes that key interest rates will remain unchanged, although Tuesday's voting of the NBS Bank Board will probably be close. However, he would not be surprised that much by potential cut in key interest rates with regard to favorable inflation development.

ARDAL Will Open a New Issue of Government Bonds in February
The Finance Ministry's Debt and Liquidity Management Agency (ARDAL) will open a new government bond issue on the local market in early February. These will be three-year zero coupon bonds and the agency plans to issue them in several tranches by the end of next year. The volume of the whole issue is capped at SKK 40 billion. The first auction of this series will take place on February 5, ARDAL informed SITA.

MONEY MARKET: Mainly Overnights Traded on Monday
The interbank market opened another week with liquidity surplus. UniBanka dealer Jozef Hempfinger said that commercial banks deposited SKK 15.753 billion in their reserve accounts in the National Bank of Slovakia (NBS) at the beginning of the week meeting the January minimum requirement on a cumulative basis at 102.05 percent. An additional SKK 18.073 billion ended up in the central bank's one-day sterilization.

Regular Flights on Route Poprad-Sliac-Prague to be Launched in March
The airline company Hron Air, s.r.o., will provide regular flights on the route Poprad--Sliac--Prague and back from March 27. The chairman of the board of directors of the steelworks Zeleziarne Podbrezova, the majority owner of Hron Air, Vladimir Sotak, informed at a press conference on Monday that Hron Air will be a mixed public-private company in which Banska Bystrica county, Presov county, the town of High Tatras, the town of Poprad, and the firm Aqua City Poprad also will have stakes. Hron Air in cooperation with the Ostrava-based company JOB Air will transport passengers in the 33-seat airplane SAAB 340.

Johnson Controls May Expand its Investment in Slovakia
U.S. company Johnson Controls Inc may expand its investment in Slovakia. Representatives of the company talked at a meeting with Economy Ministry State Secretary Peter Ziga on Monday about a pilot project to shift its headquarters for Central and Eastern Europe for the whole corporation of Johnson Controls from Germany to Slovakia. "If the company were to implement its plans, around three hundred new jobs would be created here in management activities of this firm with high added value in areas that the government of Slovakia and the Ministry of Economy prefers" said spokesman for the ministry.

STOCK MARKET: SAX Index Slightly Strengthens on Monday
The Bratislava Stock Exchange (BCPB) registered moderate gains at the beginning of the week. Slovakia's official SAX share index improved 0.4 percent or 1.67 points to 414.36 points owing to shares of VUB and of the power-engineering company SES Tlmace. Turnover on the Bratislava Stock Exchange (BCPB) eased from SKK 558.7 million on Friday to SKK 530.8 million on Monday, of which mere SKK 2.1 million fell to share trading.

FOREX MARKET: Crown Moves in a Narrow Band before NBS Session
The exchange rate of the Slovak currency against the euro fluctuated in a narrower band and the crown developed along with the region because market players are waiting for the meeting of the National Bank of Slovakia's (NBS) Bank Board on Tuesday. The exchange rate opened this week at 35.190/35.210 SKK/EUR and it later strengthened to 35.160/35.170 SKK/EUR. "Nevertheless, the crown's exchange rate together with surrounding markets' currencies later got to weaker levels, i.e., 35.310/35.320 SKK/EUR," OTP Banka dealer Juraj Mitosinka commented. The local currency recovered part of its losses and the exchange rate stood at 35.240/35.260 SKK/EUR before the close of trading.

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05. jún 2023 08:19