Summary of economic news released on Wednesday, November 29
Tatra Banka to Float SKK 600 Mln. Mortgage-Backed Bond
Tatra Banka, the third largest bank in Slovakia, is preparing to float a new issue of mortgage-backed bonds amounting to SKK 600 million. The issue of the TB-HZL XVIII mortgage-backed bond will consist of 600 securities with a par value of SKK 1 million. Tatra Banka set the issue price at 100 percent of the face value. Bonds will bear a fixed coupon equaling 4.65 percent p.a. The mortgage-backed bonds will mature on March 6, 2009, informed Tatra Banka. Yields will be paid annually on March 6. The bond will be floated as of December 6.
Bratislavske Tlaciarne Earns 3Q Profit of SKK 4.3 Mln.
Printing house Bratislavske Tlaciarne a.s., a member of the Grafobal Group, closed nine months of this year with a profit of SKK 4.3 million. The company informed that its nine-month sales climbed to SKK 240.5 million. Costs were SKK 236.2 million in the monitored period. This year's investments should achieve SKK 10.8 million. At the end of September the company had 199 people on its payroll.
Stavovyroba Nova Cuts its Share Capital
The company Stavovyroba Nova, a.s. Bratislava has reduced its share capital by over SKK 89.5 million to SKK 1.088 million. The company's board of directors informed that creditors of the company have the right to require the proper settlement of their due claims. The company closed last year SKK 6.3 million in the red. However, the cumulative loss for the previous years achieved SKK 71 billion in late December.
Real Demand for SFRB Housing Support at SKK 4.68 Bln. So Far
Individuals interested in a contribution from the State Housing Development Fund (SFRB) submitted 1,730 applications totaling SKK 5.513 billion as of November 28, 2006. However, real demand only amounts to SKK 4.68 billion. The difference of SKK 828 million is attributed to rejected or withdrawn applications, according to data provided to SITA by SFRB representatives. The fund approved 1,470 applications for almost SKK 4.6 billion as of November 28. Financial support, which interested entities already have in their bank accounts, already exceeded SKK 4.4 billion. This support applied to 4,377 new apartments and the reconstruction of 4,183 housing units. The fund's budget for this year is SKK 4.758 billion.
Slovakia's Current Account Deficit at SKK 101.4 Bln. in September
The central bank's preliminary figures show that Slovakia's deficit on the current account of the balance of payments was SKK 101.4 billion in nine months of this year, up SKK 33.2 billion y/y. In September alone Slovakia showed a deficit on the current account of the balance of payments of SKK 14.4 billion while it was SKK 7.7 million a year ago. The trade balance deficit widened in September from August. The balance of receipts reported a worse result as well due to higher dividend payouts. Also the balance of current transfers posted a higher deficit compared with August. The only item that developed better than in the previous moth was the balance of services, informed the National Bank of Slovakia (NBS) on Wednesday.
Transport Minister Promises No Trains will be Canceled Next Year
Train schedule in passenger railway transport in Slovakia for next year will not change, Transport Minister Lubomir Vazny informed on Wednesday, adding that the volume of funds for state-subsidized transport in public interest will be increased by SKK 400 million to prevent a planned reduction of train services. Originally, SKK 5 billion was to be allocated for this purpose, however, railway transport company Zeleznicna Spolocnost Slovensko, a.s. (ZSSK Slovensko) and railway trade unions protested against this. The minister said that the decision to increase the amount of money for state-subsidized transport was influenced by public opinion, as well as by an intervention of Prime Minister Robert Fico.
Central Bank's FOREX Reserves Down USD 89 Mln. in October
Aggregate FOREX reserves of the National Bank of Slovakia (NBS) reached USD 13.1455 billion at the end of this October, representing a m/m decrease of USD 88.7 million. This monthly drop results from a deficit of the revenue-expenditure balance at USD 76.8 million and negative exchange rate differences at USD 11.9 million as the result of the changed USD/EUR cross rate in the monitored period, the NBS informed SITA.
NBS Reports Slovak Crown Firmed 2.6 Pct. Against the Euro in October
The Slovak currency strengthened against its reference currency the euro by 2.6 percent in October when it moved from 37.384 SKK/EUR to 36.412 SKK/EUR. The average exchange rate appreciated by 1.7 percent. The crown diverged from its parity of 38.455 SKK/EUR most significantly on October 30, 2006, when the exchange rate was 36.375 SKK/EUR, meaning a 5.41-percent appreciation from the central parity. Against the US dollar the Slovak currency firmed 2.6 percent from 29.405 SKK/USD to 28.629 SKK/USD and the average rate appreciated by 0.8 percent, wrote the National Bank of Slovakia (NBS) in its report for October of this year.
Cabinet Nominates New Telecommunications Office Director
The Cabinet approved a proposal, according to which Branislav Macaj should become the new chairman of the telecommunications market regulator the Telecommunications Office (TU). Nomination is subject to approval by parliament. The proposal was submitted by transport Minister Lubomir Vazny. Branislav Macaj would replace the current chairman of the Telecommunications Office Milan Luknar. Mr. Luknar was elected to the post by parliament at the proposal of the cabinet on December 12, 2000.
Prysmian Kablo Closed 2005 with Sales of SKK 2.55 Bln.
Cable maker Prysmian Kablo Bratislava, s.r.o. reported a 1.6 percent drop in total sales to SKK 2.55 billion over 2005. Its sales of products and services were SKK 1.972 billion, down 11.7 percent y/y. Sales of goods more than doubled to SKK 466.2 million over the year. These figures come from the electronic issue of the commercial bulletin on the Internet.
General Electric International (Slovensko) Decreases Share Capital
The company General Electric International (Slovensko), s.r.o. Bratislava, which builds, repairs and sells electric machines and devices, decreases its share capital almost by SKK 11.8 million. Dutch firm General Electric International (Benelux) B.V., the sole owner of the company, decided that the share capital of the Slovak firm will be reduced from originally over SKK 11.9 million to SKK 200,000. General Electric International (Slovensko) representative Zuzana Gregusova addressed company's creditors to forward their claims within ninety days after the second notice of decreasing the share capital.
Agriculture Ministry to Pay 90% of Direct Payments by the Year End
Slovak Agriculture Minister Miroslav Jurena stated at a press conference on Wednesday morning that the payment of direct farming subsidies to Slovak farmers will start sooner than ever before this year. The ministry will pay ninety percent to all direct-payments applicants, which is approximately SKK 9 billion by the end of December. "The first applicants may receive the money as soon as the end of this week, or at the beginning of next week," Mr. Jurena said. Payments will be realized in dependence on the date, when the applicants received decisions on payments.
Sales of AVC Cadca were SKK 546.1 Mln. in Three Quarters of 2006
AVC Cadca, a.s., a producer of components for the automotive industry, generated sales of SKK 546.1 million in the first nine months of this year, which translates into an increase of 23.8 percent y/y. "Sales of products and services amounted to SKK 465.8 million, which is up 9.3 percent y/y," informed the head of the company's human resources department Zuzana Kostelna. Production costs were 1.2 percent lower at SKK 360.6 million. The company generated added value of SKK 111.9 million, which is up SKK 37.3 million in comparison with the same period of last year. The company posted a taxed profit of SKK 2.3 million over nine months of this year. In the same period of last year the company was SKK 79.5 million in the red.
Abo Mill with SKK 397.8 Mln. Sales in 2005
The flour producer Abo Mill, s.r.o., Kosice, reported sales of SKK 397.8 million for last year. Sales of its own products and services represented SKK 348.5 million, down 5 percent from a year ago. Output dropped as well by 12.5 percent to SKK 338.3 million. Production costs dropped 6.1 percent y/y to SKK 333.6 million. Added value was SKK 2.5 million while in 2004 it was SKK 43.4 million. The company posted losses of SKK 22.3 million for 2005. In 2004 it netted SKK 446,000.
Counties will Get SKK 300 Mln. Bus Transport Subsidy for 2005
The Cabinet decided to release an extraordinary SKK 300 million to settle debts in commuter bus transport services provided in the public interest for 2005. The funds should come from the General Treasury Administration chapter and should be provided by the end of this year. "The problem for 2005 has been solved," said Bus Transport Companies Association president George Trabelssie. He is glad with this decision because there is not so much pressure on bus transporters to increase prices. In 2005 debts of transporters were settled by counties, which allocated SKK 1.293 billion for this purpose. However, counties did not cover all debts.
Government Wants to Simplify Investment Incentive Allocation Process
The process for the provision of investment incentives will become simpler until the end of this year. The Slovak Cabinet decided so at its session on Wednesday. Economy Minister Lubomir Jahnatek said after the Cabinet session that the process would enable the government to approve about forty investment projects worth SKK 32 billion by the end of the year. These projects should result in the creation of 12,000 jobs. The simplification was approved because as of the start of 2007 the provision of investment incentives will be governed an EU regulation for national regional assistance for the years 2007 to 2013, approved by the European Commission. "The rules require a time framework for approval of aid of 12 to 18 months, and this is not realistic," Mr. Jahnatek said about simplified rules.
MONEY MARKET: Banks Sterilize Surplus Liquidity in the NBS
The interbank market remains in a liquidity surplus after the settlement of the National Bank of Slovakia's (NBS) regular sterilization repo tenders on Wednesday. Slovenska Sporitelna dealer Pavel Janosik said that along with SKK 543 million from the government-bond auction on Monday, as much as SKK 119.907 billion from the repo tender on Tuesday left the market, and SKK 104.155 billion from the maturing repo contracts returned to the market. This, however, did not drain the whole excess liquidity. Commercial banks deposited SKK 7.928 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Wednesday, meeting the minimum requirement for November on a cumulative basis at 101.59 percent. An additional SKK 5.35 billion ended in the NBS one-day sterilization.
STOCK MARKET: Shares of SES Tlmace and Slovnaft Push SAX Higher
The Bratislava Stock Exchange (BCPB) improved on Wednesday when shares of the power-engineering firm SES Tlmace and the Slovak crude-oil refiner Slovnaft pushed up the official SAX share index 0.5 percent or 2.05 points to 412.81 points. Turnover on the Bratislava Stock Exchange (BCPB) dropped from SKK 731.7 million on Tuesday to SKK 343.951 million on Wednesday, with SKK 8.092 million in share trading.
One in Seven Policyholders to Switch to Another Health Insurer
The Healthcare Supervision Office (UDZS) registered 716,467 applications switching to another health insurance company as of January 1, 2007. Slovakia's biggest insurer, Vseobecna Zdravotna Poistovna (VsZP), will lose the highest number of policyholders with an outflow of 437,028 clients, which corresponds to 12.8 percent of its policyholders. Spolocna Zdravotna Poistovna (SZP) also reported a negative balance in inflow and outflow of policyholders. It will have 82,243 clients less next year, which is 12.07 percent of its policyholders. Sideria reported the highest outflow of its policyholders when 19.9 percent of its policyholders, which is 79,396 people, decided to leave. Apollo ended with a drop of 27,055 policyholders (5.7 percent). Dovera is the sole currently active health insurer to report a growth in policyholders. The number of Its policyholders will increase 89,050 from next January.
FOREX MARKET: Crown Breaks 35.500 SKK/EUR on Wednesday
The Slovak currency reached a new high against the euro on Wednesday when it managed to break the boundary of 35.500 SKK/EUR. Ludova Banka dealer Juraj Minar said that crown's strongest level on Wednesday was 35.475 SKK/EUR. Stabilization on global and regional equity markets, which also mediates positive impulses on the foreign exchange (FOREX) market, helped not only the Slovak crown, but also the whole region.
Constitutional Court Rules Against Network Industries' Regulator
The Constitutional Court issued its verdict on Wednesday stating that the Regulatory Office for Network Industries (URSO) has harmed the rights of SMZ Jelsava by not issuing executive guidelines concerning energy price regulation. URSO however, issued a price decision and thus exceeded its competencies. Apart from SMZ Jelsava, Zeleziarne Podbrezova, Slovenska Paroplynova Spolocnost Ruzomberok and Duslo Sala challenged 18 decisions of URSO, as well, and demanded their cancellation. The Constitutional Court dealt with a similar case in July of this year. At that time Slovmag Lubenik, SHP Harmanec and NCHZ Novaky turned to the Constitutional Court with a complaint against URSO. The Constitutional Court stated URSO's procedure was unlawful.