Economic news released by SITA on Wednesday, October 18
Saint-Gobain Weber Terranova Reports H1 Profit of SKK 18.8 Mln.
Dry plaster mixture producer, the company Saint-Gobain Weber Terranova, s.r.o. Bratislava reported H1 revenues of SKK 197.9 million. Sales of own products and services reached SKK 104.6 million while revenues from goods sold were SKK 93.3 million. Production consumption exceeded SKK 54.5 million. Added value achieved SKK 50.5 million. The company grossed SKK 18.8 million in H1. Saint-Gobain Weber Terranova was enrolled in the commercial register in 1999. The only partner of the Bratislava company is the French firm Saint-Gobain Weber SA. At the end of June the company had 68 people on its payroll.
Moody's Upgrades Slovakia's Government Bond Ratings to A1
International rating agency Moody's Investors Service raised Slovakia's foreign and local currency government bond ratings to A1 from A2 in light of the country's solid record of structural reforms and the ongoing dynamism of the economy. Simultaneously, Moody's upgraded the foreign-currency bank deposit ceiling to A1 from A2, while the short term foreign-currency ceilings remained at P-1. The outlook for all the ratings is stable.
Bratislava Airport's Chairman of the Board of Directors Sacked
At their general meeting on October 17, the shareholders of M.R. Stefanik Airport-Airport Bratislava, a.s., dismissed Milan Kajan from the post of chairman of the board of directors. The shareholders also voted on his replacement. The new chairman of the board of directors is Frantisek Stolarik, who had been head of the civil aviation section at the Transport Ministry. The shareholders also recalled Lubos Sevcik and Roman Dibala from the board of directors, and their replacements are Branislav Steffel and Peter Kostyal.
Vychodoslovenske Tlaciarne Posts Q1-Q3 Profit of SKK 13.4 Mln.
Printing company Vychodoslovenske Tlaciarne, a.s., Kosice, earned a profit of SKK 13.4 million in the first three quarters of this year. It closed the same period of last year SKK 2.9 million in the red, vice-chair of the company's board of directors Terezia Pitelova told SITA, labeling the financial situation of the company as satisfactory.
Bearings Producer ZVL Auto Plans Balanced Performance This Year
Automotive bearings producer ZVL Auto, based in Presov, eastern Slovakia, expects operating losses of SKK 41.8 million this year. Company director general Miloslav Vysoky explained that it is because the foreign trade partners of the firm, mainly in Germany, are important world producers of agricultural equipment and their market position makes them strong in price negotiations with suppliers. Mr. Vysoky explained that the firm decided to terminate these trade relations. Having no possibility to increase prices of products it sells to these companies, the company has no reason to continue these relations given an increase in steel prices on world markets. Mr. Vysoky said that the company plans a balanced performance in 2006 because of sales of capital assets and stakes in their subsidiaries.
National Highway Company Plans SKK 1.98 Bln. Sales in 2007
The National Highway Company, a.s., (NDS), plans sales of own products and services of SKK 1.98 billion in 2007 with the better portion of these sales coming from the distribution of highway stickers. It plans to close next year with a profit of almost SKK 47 million when an operating profit of SKK 79.7 million should be reduced by a loss from financial operations estimated at SKK 32.7 million. The information stems from the data published in the business plan of the NDS.
Ministry Presents Changes in Housing Support to Favor Young People
The Construction Ministry proposes amending provisions about types and amounts of housing subsidies provided by the State Housing Development Fund (SFRB). The ministry submitted for interdepartmental review a draft regulation that sets out details on providing loans, as well as the range of housing support in the form of non-returnable grants. The material should help young people with acquiring their own housing, as well as encourage reconstruction and construction activities on the Slovak housing market. The draft regulation should come into effect as of the beginning of next year.
Trade Unions Confederation Elects a New President
The Trade Unions Confederation of (KOZ) elected Miroslav Gazdik its new president on Wednesday. The current mineworkers' trade union chairman will take up his post as of December 1. He received 86 out of 96 votes at the KOZ congress; eight delegates were against the only candidate. Current KOZ president Ivan Saktor officially resigned and will leave his post on November 30.
Mandatory Takeover Bid for Istrokapital Shares is Announced Again
Weylin Investment, LLC, registered in Delaware, United States, and 100-percent Mario-Hoffmann-owned, announced on Wednesday a mandatory bid to buy Istrokapital shares. Information Weylin Investment published says that the mandatory buyout bid expires in 30 calendar days from its announcement, i.e., from October 18 of this year. The buyout price of a share with a face value of SKK 100 has been set at SKK 71, and the buyout price of a share with a face value of SKK 1 million is SKK 710,000. The company will finance the takeover bid from its own resources. Istrokapital was obliged to announce a bid to buy all the company shares from those shareholders who did not vote for the adoption of the decision to withdraw its shares from trading on the Bratislava Stock Exchange (BCPB) and from those who did not attend the meeting about this action.
VUB Banka Floats Five-Year Mortgage-Backed Bond
VUB bank, a.s., announced on Wednesday its plans to float its twenty-third issue of mortgage-backed bonds of EUR 60 million to finance mortgage lending. The bank will float the issue on October 26. The par value of the security, consisting of 60 bonds, is EUR 1 million. The issue price will be 100 percent of par value. The bonds will bear a flexible interest rate equivalent to the three-month BRIBOR plus 0.15 percent p.a. The bank will pay interest quarterly, starting on January 26, 2006.
Slovakia's Honorary Consulate in Vietnam Opens in Ho Chi Minh City
Slovak President Ivan Gasparovic took part in an official ceremony for the opening of the Slovak honorary consulate in Ho Chi Minh City in the south of the Socialist Republic of Vietnam. The president expects that the opening of the honorary consulate will stimulate mutual diplomatic, consular, and trade relations between Slovakia and Vietnam. He stressed that Vietnam and Slovakia should currently put emphasis on the economic dimension of their good bilateral relations. He pointed out the dynamic development of both countries. He said he was glad that Slovakia opens an honorary consulate in the province of Ho Chi Minh City which is the economic power house of Vietnam.
OTP Garancia Poistovna Licensed to Provide Car Liability Insurance
The National Bank of Slovakia (NBS) approved the application of the insurer OTP Garancia Poistovna, a.s., and granted it a license to provide car liability insurance. Thus, the number of entities providing the car liability insurance in Slovakia rose to nine, the insurer OTP Garancia Poistovna informed.
Regulator Names Slovak Telecom a Major Operator on Another Market
Telecommunications regulator the Telecommunications Office stated on October 16 that Slovak Telekom is a company with a significant influence on the retail market for providing a minimal set of hired circuits with a capacity of up to 2 Mb/s. Consequently, the regulator defined for the company duties aimed at the support of effective competition and the development of the internal market. The decision has yet to come into effect. The company has 15 days to appeal it. Slovak Telecom said they are analyzing the decision and will decide whether to appeal the decision within the set deadline.
Cabinet will Nominate a Candidate for NBS Vice Governor Soon
A new candidate for the post of the National Bank of Slovakia (NBS) vice governor should be known within the next two to four weeks, Prime Minister Robert Fico stated after the Cabinet session on Wednesday. The Cabinet should debate the proposal to appoint the central bank's new vice governor during that time. According to Mr. Fico, it is not good when such an important function is vacant for a long time. "We'll look for a person who cannot be questioned as Mr. Tvaroska was," Prime Minister said. He refused to comment on speculation in the media about alleged candidacy of his advisor Stefan Veselovsky.
State will Ensure Development of Bratislava Airport, Says Cabinet
Prime Minister Robert Fico considers the Bratislava airport to be attractive, and that is why he does not see any problem developing it with the help of funds other than those that should have been acquired through its privatization. "The state will make sure that the airport is developing, external resources, loans are available," added Transport Minister Lubomir Vazny. He thinks that the airport is in good financial condition, its annual sales reach around SKK 1 billion, and the expansion of the airport by 10 to 15 percent annually is expected. "Without the help of the state, the airport is able to get a loan from SKK 2 billion to SKK 2.5 billion. It will not be any problem for a bank to provide a loan of this volume to the airport," stressed Mr. Vazny.
MONEY MARKET: Only Short Deposits Traded on Wednesday
The interbank market stayed in a liquidity surplus after the settlement of the National bank of Slovakia's (NBS) sterilization repo tenders on Wednesday. Slovenska Sporitelna dealer Pavel Janosik commented that only short deposits were traded. As much as SKK 128.605 billion from the repo tender on Tuesday left the sector, and SKK 116.236 billion returned from a maturing repo tender. Commercial banks deposited SKK 29.549 billion in their reserve accounts in the National Bank of Slovakia (NBS), meeting the minimum requirement for October on a cumulative basis at 112.45 percent. The central bank announced an auction of the NBS 84-day bills on Thursday, which should replace SKK 222 million maturing on Friday. According to Mr. Janosik, the market does not expect the banks to be significantly interested in the NBS bills, and the sector should stay in a liquidity surplus after the auction.
Slovak Central Bank Perceives Currency Strengthening Positively
The National Bank of Slovakia (NBS) perceived the strengthening of the Slovak crown positively, which improved its high against the euro in several waves last week. The central bank certainly considers the crown's strengthening as a positive step, the NBS Governor Ivan Sramko commented after the Cabinet session on Wednesday. According Mr. Sramko, it is, nevertheless, difficult to tell whether the crown's strengthening is sufficient for fighting inflation. Concerning inflation, mainly the development of regulated prices has a decisive role. "These prices have influenced inflation growth the most. However, a shift in the exchange rate also is important," the governor added. The central bank even expected a further strengthening of the Slovak currency because of the favorable development of Slovakia's economy.
Finance Minister Got Authorization to Attend NBS Bank Board Meetings
Finance Minister Jan Pociatek obtained authorization from the Cabinet on Wednesday to participate in meetings of the Bank Board of the central bank, the National Bank of Slovakia (NBS). Finance Ministry spokesman Miroslav Smal informed that this is only a formal process that is connected to the fact that since elections there is a new finance minister. The meeting of the NBS Bank Board is not open to the public. An appointed member of the Cabinet has the right to participate on the basis of the NBS Act.
STOCK MARKET: VUB Shares Help SAX Index Strengthen Moderately
The Bratislava Stock Exchange (BCPB) registered moderate gains on Wednesday. Slovakia's official SAX share index improved 0.12 percent or 0.48 points to 404.18 points. Out of SAX base issues, only VUB shares improved on Wednesday, pushing up the SAX index. Turnover on the Bratislava Stock Exchange (BCPB) dropped from SKK 2.25 billion on Tuesday to SKK 181.672 million on Wednesday, of which a mere SKK 306,500 fell to share trading.
Bakers Worried about Supplies of Grain on the Slovak Market
Bakers have problems with supplies of flour two months after the end of this year's harvest. Flour prices went up significantly, and, in the case of some types of flour, the price has more than doubled, informed the Business Association of Bakeries, Pasta, and Confectionery Producers (PZPCC). "Prices of inputs growing at such a fast pace complicate the economic and market environment," said PZPCC chairman Milan Rusina. He pointed out that as a result of this bakeries have to struggle with growing costs. However, retail chains do not allow the bakeries to reflect this fact into the prices of products to the full extent. Moreover, Mr. Rusina is worried that the export of wheat and rye could endanger the situation on the domestic market or even cause further price increases because of the need to import these cereals.
FOREX MARKET: Crown Reaches New Historic High on Wednesday
The Slovak crown again reached a new high on Wednesday. During Tuesday night the crown's exchange rate against the euro strengthened to 36.715 SKK/EUR influenced by the information about ratings agency Moody's having upgraded the rating of Slovak bonds. On Wednesday, the crown reached a new high SKK 36.675 SKK/EUR. UniBanka dealer Tomas Kalavsky said that the exchange rate of the crown against the euro was 36.680/36.690 SKK/EUR before the close of trading.