Summary of economic news released on Thursday, July 27
Average Petrol Prices up SKK 0.38 by July 20
As of July 20 the average retail price of 91- and 95-octane petrol in Slovakia was SKK 42.83 per liter and thus compared with July 10 it rose by SKK 0.39. The Slovak Statistics Office reported the price for 98-octane petrol increased by SKK 0.37 from July 10 to SKK 45.38. The average retail price of one liter of diesel was SKK 41.67, which is SKK 0.02 more than on July 10, 2006. The average retail price of LPG remained unchanged at SKK 21.75, spokeswoman of the Slovak Statistics Bureau Eva Kelemenova informed.
Privatbanka Reports H1 Profit of SKK 28.6 Mln.
Privatbanka, a.s. earned a pretax profit of SKK 28.6 million for the first half of this year when calculated in line with international accounting standards. Six-month net interest revenues amounted to SKK 67.8 million and net income from fees and commissions reached SKK 9.5 million, according to data published by Privatbanka. Operating revenues were at SKK 75.6 million, but costs exceeded SKK 75 million.
INVESTING: Outflow of Funds Continued in June
The net value of assets in open-end mutual funds denominated in the Slovak crown decreased to SKK 114 billion over June 2006. The outflow of money continued in funds denominated in the Slovak crown as well as the foreign exchange. Compared to May the outflow of funds from mutual funds was moderately higher and reached SKK 0.4 billion, stated the National Bank of Slovakia (NBS).
Stefe SK Reports Higher Sales and Lower Profit Last Year
The company Stefe SK, a.s operating in the heating sector reported sales of own products and services at SKK 32 million last year representing an increase of SKK 28.1 million y/y. Production consumption was SKK 22.7 million, up SKK 16.4 million y/y. The company generated added value of SKK 11 million in the monitored period while in 2004 this indicator reached negative territory. The company grossed SKK 7.5 million in 2005, which accounts for a y/y drop of 23 million. Stefe SK succeeded to reduce its operating profit gap by SKK 1.2 million to SKK 4.3 million. On the other hand, profit from financial operations reached SKK 11.9 million while in 2004 it was SKK 34 million.
Doka Drevo Boosted Sales by 4.7 Percent to SKK 779.2 Mln.
Banska Bystrica-based Doka Drevo, a.s., a company producing ply formwork sheets from glue-bonded layered wood, reported sales of its products and services of SKK 779.2 million last year. Compared to 2004 this means an increase by 4.7 percent. The company closed the year of 2005 with a taxed profit of SKK 103.8 million. Thus its performance improved by almost 16 percent since it reported a taxed profit of SKK 89.6 million one year earlier. Generated added value rose 8 percent to SKK 268.5 million.
DeTelmmobilien Enters Slovak Market Late Summer
Slovak-German joint venture DeTelmmobilien (DTI) Slovakia, s.r.o. that is involved in administration of real estates and facility management starts its operation in Slovakia by taking under its administration more than 800 buildings owned by Slovak Telekom, a.s. The company will thus have under its administration buildings with an area of 560,000 square meters.
New Government Wants to Roll Back Some Healthcare Reform Steps
The new Slovak government plans to cancel the current shape of reconciliation of paid health insurance premiums. This stems from a material, which should be a working version of a draft program of the Slovak government for its four-year term. The health care chapter contains plans, which Health Minister Ivan Valentovic already indicated. The government wants to secure the principle of solidarity in the healthcare system. "Socially oriented state should not get rid of responsibility for securing access to adequate health care for all citizens," the draft program stresses.
Government Plans to Prepare Energy Strategy with Outlook for 2030
The Slovak government plans to prepare a strategy of Slovakia's energy security for the period until the year of 2030. This strategy should secure Slovakia's self-sufficiency in electricity production, optimal price policy, pro-export orientation, and strengthening of Slovakia's position as a transit country with electricity, gas and crude oil as well as a reliable supply of Slovakia with thermal energy and other energetic resources. This information comes from a material, which should be a working version of the government's program statement to be presented in parliament next week.
New Government Wants to Unify Collection of Taxes and Transfers
The new government of Robert Fico plans to further develop and put into practice the idea of a joint collection of taxes and compulsory payments into insurance funds. According to a document, which should serve as a working version of the government's program statement, the government wants to unify collection of taxes with insurance premiums by transferring collection of social insurance premiums under the tax administration.
New Government will Respect Concluded Privatization Contracts
The new Slovak government will respect its commitments stemming from privatization contracts, which were concluded in line with the law under previous governments. This stems from a material, which should serve as a working version of the government's program statement. The government wants to guarantee that terms set in the privatization contracts will not change if the process of privatization was in line with the law. The government does not intend to launch new privatization projects of strategic companies or complete already launched privatization projects of strategic companies. According to the material, the government will determine which companies are strategic.
Government Wants to Set Up a State Real Estate Agency
The new Slovak government will implement central public procurement and set up a state real estate agency in the first year of its term. This information comes from a material, which should serve as a working version of the government's program statement. The government wants to take these steps in order to improve transparency of public procurement and records of state-owned real estate so that the criteria of procurement, utilization, and sale of assets were transparent. The government thus wants to support public control of effectiveness of the state administration, reads the material.
Lease Plan Slovakia Concluded Contracts Worth SKK 405.9 Mln. in H1
Lease Plan Slovakia B.V., which specializes on operative leasing of cars, concluded 658 new contracts worth SKK 405.9 million in acquisition prices without value added tax in the first six months of this year. According to the type of financing, clients signed contracts at SKK 377.1 million on operative leasing. They concluded transactions at SKK 28.8 million on services of financial leasing.
B Four Bids SKK 400 Mln. for Third Mobile License
Company B Four, a.s. Bratislava bid SKK 400 million for the third mobile license in Slovakia. This is four-times the minimum amount demanded by the Slovak Telecommunications Office. In case it wins the tender B Four, a.s. Bratislava, founded by Czech firm Radiokomunikace and Slovak-Czech investment company Penta, wants to offer customers unlimited amount of free minutes for domestic calls within its own network for several hundreds of crowns monthly," Penta investment director Marek Ondrejka told SITA.
MONEY MARKET: Banks Deposit over SKK 74 Bln. in Overnights
Relatively calm atmosphere prevailed on the interbank market on Thursday, while only shorter deposits were traded. Slovenska Sporitelna dealer Pavol Janosik stated that commercial banks deposited SKK 11.59 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Thursday meeting the minimum requirement for July on a cumulative basis at 108.95 percent. Apart from this additional SKK 74.27 billion ended in the overnights in the central bank.
STOCK MARKET: SAX Share Index down 0.43 Pct. on Thursday
Following a remarkable boost by over nine points on the previous day, the value of the official SAX share index moderately shrank on Thursday. Shares of VUB bank dragged down the SAX index by 0.43 percent or 1.65 points to 386.48 points. Turnover on the Bratislava Stock Exchange (BCPB) dropped from SKK 1.808 billion on Wednesday to SKK 176.643 million on Thursday with SKK 1.492 million in share trading.
New Transport Minister Sacks Director General of ZSR Railway Company
Transport Minister Lubomir Vazny on Thursday recalled Roman Veselka from the post of director general of railway network operator Zeleznice Slovenskej Republiky (ZSR). Simultaneously, the minister appointed so-far deputy of ZSR director general Milan Solarik to this post. Mr. Vazny also dismissed three of nine members of the ZSR board of directors, replacing them by new members, ZSR spokesperson Nela Blaskova informed SITA.
Minimum Wage Should Go Up to SKK 7,430 from October
The minimum wage should increase from current SKK 6,900 to SKK 7,430 from October 1, 2006. This figure is based on the draft coefficient for adjustment of the gross monthly minimum wage from October 1 of this year, which should be discussed by the Social Partnership Council on Friday. The lowest wage in Slovakia should thus equal 43 percent of the average wage in the economy last year. The proposal for the minimum wage growth has yet to be approved by the cabinet.
FOREX MARKET: Crown Gains Almost Twenty Hallers Towards Euro
The Slovak crown improved by almost 20 hallers towards its referential currency the euro on Thursday. While the crown opened at 38.110/38.150 SKK/EUR, the exchange rate already stood at 37.920/37.960 SKK/EUR before the close of trading. Tatra Banka dealer Boris Somorovsky stated that mainly a significant demand of London market players was behind crown's gains, strengthening the Slovak currency up to 37.900 SKK/EUR. "The crown could also test this level on Friday and investors may possibly test even stronger levels," said the dealer. The crown could thus be traded in the band from 37.850 SKK/EUR to 38.200 SKK/EUR in trading on Friday.
Market Analysts Don't Consider Fuel Excise Tax Decrease Efficient
If the government decreased the excise tax rate on motor fuels in order to reduce their retail prices, the shortfall in the state budget could be compensated by corporate income tax rise, follows from the material elaborated by the Economy Ministry, which suggest to solve the growing prices of fuels and energies. The cabinet talked over this material on Wednesday, while the talks were suspended. Economy Ministry spokesman Branislav Zvara informed SITA news agency that corporate income tax rise would only concern Slovak crude oil refiner Slovnaft.
Government Wants to Reform General Government Spending
The new Slovak government plans to reform the general government spending during its term. It wants to put an emphasis on strict program budgeting. "The basic framework for asserting government policy and targets will be prudent budgetary and fiscal policy and gradual stabilization of public finances under strict observance of the Maastricht criteria and commitments stemming from the reformed Growth and Stability Pact," reads a material, which should serve as a working version of the government's program statement. The government's aim is to introduce the euro in Slovakia in 2009.