Economic news released by SITA on Friday, March 16
Antitrust Office Approves Skanska CZ and Stamart Martin Concentration
The Slovak Antitrust Office (PMU) has greenlighted the concentration of construction companies Skanska CZ, a.s., and Stamart Martin, s.r.o. It has reached a conclusion that the concentration does not create or strengthen a dominant position of Skanska CZ resulting in significant obstacles to effective competition on the relevant markets, which are the market of construction of apartment buildings and construction of buildings for industry and services, PMU spokesperson Alexandra Bernathova informed. The decision became effective on March 15. The concentration is based on direct exclusive control of Skanska CZ, a.s., over Stamart Martin, s.r.o.
Confidence Indicator in the Building Industry Improved Last Month
The confidence indicator in the building industry gained 1.5 points in February to minus 1.5 points in February, still exceeding the long-term average by 22.5 points. According to results of an outlook survey of the Statistics Office, its development was primarily influenced by expectations concerning higher employment. However, evaluation of the level of demand for construction works worsened compared with January by three points to minus 18 points. In February, 29 percent of companies did not consider demand for construction works satisfactory, 69 percent of them are satisfied with construction demand, and two percent of respondents view demand to be more than satisfactory.
ZSSK Cargo Reduced Loss by SKK 719 Mln. Last Year
Railway cargo company Cargo Slovakia, a.s. (ZSSK Cargo) closed 2006 with a preliminary loss of SKK 266.2 million. Compared with the previous year it improved its performance by SKK 718.7 million. The head of the board of directors and company director general, Matej Augustin, informed SITA of the results calculated according to Slovak accounting standards. ZSSK Cargo reported an operating loss of SKK 212.5 million and a loss from financial operations of almost SKK 54.6 million for 2006. Total sales of the company amounted to SKK 17.53 billion, of which its own product and service sales made up SKK 16.7 billion. This was 3.2 percent more than in the previous year. Operating costs of ZSSK Cargo swelled moderately by 0.1 percent to SKK 11.9 billion. The cargo company generated added value of SKK 4.86 billion, an increase of 12.7 percent y/y.
ZSSK Seeks a Contractor for Rolling Stock Maintenance
Railway transport operator ZSSK Slovensko plans to announce a public tender to select a contractor, which would be awarded a three-year contract starting from 2008 for periodic maintenance of its rolling stock. Preliminary value of the contract is SKK 3.75 billion without VAT. According to information released by the company, the prepared public tender is divided into four parts. These concern regular repair of passenger cars, electric locomotives, light train units, and regular maintenance and inspections of rolling stock.
Slovakia's FOREX Reserves Swell Following NBS' Interventions
Slovakia's foreign exchange (FOREX) reserves swelled significantly after last week's interventions on the FOREX market by the central bank. They stood at SKK 17.9317 billion as of March 14, which is USD 1.2749 billion more than a week ago. Reserve assets of the National Bank of Slovakia (NBS) rose USD 764.4 million in a week to USD 14.7213 billion, while commercial banks' reserves grew USD 510.5 million to USD 3.2104 billion, the NBS press department informed SITA on Friday.
MONEY MARKET: Mostly Short Deposits Traded at End of Week
The money market registered trading almost exclusively in short deposits at the end of the week. Slovenska Sporitelna's Pavel Janosik commented that commercial banks deposited SKK 27.742 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Friday, meeting the March minimum reserve requirement on a cumulative basis at 122.92 percent. An additional SKK 15.5 billion ended up in the central bank's overnights. The liquidity surplus in the sector keeps the shortest deposit prices at low levels.
Figel: Tourism Needs More Investment in Knowledge-Based Economy
EU Commissioner Jan Figel took part in a seminar organized by the Trade and Tourism Association (ZOCR). As he said at a news conference held within the seminar on Friday, investments in the knowledge-based economy are important also from the viewpoint of trade and tourism in Slovakia. "Investments that enhance employment growth currently dominate in Slovakia," said Mr. Figel. However, this trend cannot continue forever and, therefore, the future is in investments in innovations. "A knowledge-based society is one that is able to innovate its products and services," said Mr. Figel. ZOCR President Pavol Konstiak added that there is a need to increase the level of education in tourism and trade, since this sector needs high-quality employees with university and secondary school educations. He said that about 50 percent of the new jobs in this field should be filled by employees with university degrees in the future. Trade and tourism in Slovakia reported a turnover of SKK 1,242 billion last year. This sector employed 342,000 people by the end of last year, which is an increase of 16,000 people y/y.
Government Wants to Help Eastern Slovakia with Investment Stimuli
Investors are not interested in Presov County, because Slovakia lacks a law on investment stimuli and the county, in particular, has poor road infrastructure. The government wants to change this, and is therefore preparing a new law on investments, which should more significantly support investors in regions with high unemployment rates, said Economy Minister Lubomir Jahnatek at a news conference at the Presov County Office on Friday.
DDP Stabilita with over 140,000 Clients in Late 2006
Supplemental pension insurance company (DDP) Stabilita had 140,395 policies and contracts with employers at the end of last year, which is an increase of 5 percent from 2005, DDP Stabilita representatives informed SITA. Last year the pension insurer made 1,261 new contracts with employers and their total number thus reached 8,180 by the end of last year. The average monthly contribution for supplemental pension insurance amounted to SKK 759 million in late 2006.
Slovakia Might not Be Allowed to Draw EU Funds Sooner than in Autumn
Junior member of the ruling coalition, the Slovak National Party (SNS), is concerned that Slovakia will be allowed to draw finances from EU funds no sooner than the autumn, since the Slovakia's National Reference Framework still has not been approved. SNS chairman Jan Slota further said that such a situation would be absolutely unacceptable for the party. In Mr. Slota's opinion, the problem lies in the chapter of the Health Ministry, which Brussels has clearly questioned. "Brussels disagrees with the creation of the new chapter that Slovakia's forwarded version proposed. I fear that if we further protract the problematic issue of the health ministry's chapter, finances from the European Commission might not arrive sooner than the autumn, which absolutely unacceptable. We will do everything to complete the National Strategy Reference Framework as soon as possible, so that we are able to present a joint opinion on behalf of the coalition in Brussels," Mr. Slota announced on Friday at a press conference after the meeting of the party's presidium in Oscadnica.
STOCK MARKET: SAX Index Closes Week at 414.48 Points
The Bratislava Stock Exchange (BCPB) closed the week with losses caused by VUB shares. Only two of the bank's shares changed owners on the stock exchange floor but they pulled down the official SAX share index 0.74 percent or 3.11 points to 414.48 points. Turnover on the BCPB declined from SKK 205.926 million on Thursday to SKK 171.511 million on Friday with SKK 889,300 in share trading.
Idea of Bond Issue for Population Still Not Out of Question
The idea of floating a bond issue for the population is still not out of the question. According to the strategy of government debt management for the period of 2007 to 2010, the state can acquire the financial resources to finance its needs directly from citizens through such bonds, without commercial sector mediation or margin. "This supplementary way of financing government needs is customary in European Union (EU) countries," states the Finance Ministry, adding that the chief contribution of the bond issue for the population is lower dependence on the financial and stock markets and lower financing costs.
FOREX MARKET: Crown Improves its High against U.S. Dollar on Friday
Trading in Slovak currency was calm on Friday. Tatra Banka's Boris Somorovsky reported that the crown opened at 33.95/33.99 SKK/EUR. "The exchange rate later moved to 33.90/33.94 SKK/EUR," he said. The situation on the FOREX market has calmed down after the latest direct interventions by the National Bank of Slovakia (NBS), and trading was quiet throughout the week.
Drivers of SAD Poprad Bus Transport Company to Go on Strike
Drivers of the SAD Poprad, a.s. public bus transport firm will go on strike. The company employees came to this decision by secret ballot. "Of the 275 employees of SAD Poprad, 213 took part in the vote, which is 77.5 percent. Of this, 182 employees were for the strike, 26 were against it and five votes were invalid," the leader of the company's trade union organization, Michal Cekela, informed SITA. The strike committee will meet on Friday to decide about the beginning of the strike of SAD Poprad drivers from operating units in Poprad, Kezmarok and Levoca.
Kosice Airport Serves Over 43,000 Passengers in Two Months
Letisko Kosice-Airport Kosice, a.s. serviced 43,060 passengers in two months of this year, which is up by 20 percent y/y. In international transport, the airport provided services to 21,902 passengers. The remaining 21,158 passengers traveled on domestic flights. The airport reported 42,068 passengers on regular flights to Bratislava, Prague and Vienna, while 922 passengers used irregular flights. The volume of cargo transported in the January -- February period increased by 15 percent to 30 tons, airport executive director Marta Horvathova told SITA news agency.
INEKO Survey Shows Record Growth is Result of Dzurinda's Government
A record growth of the Slovak economy is, according to a survey conducted by the Institute for Economic and Social Reforms (INEKO) on Friday among 12 economic analysts, chiefly the result of work of the second government led by Mikulas Dzurinda. Results of the survey show that its contribution to the current economic growth is 42 percent. Tax reform and the labor market reform had the biggest importance among measures, adopted by the previous government. Contribution of Robert Fico's government to the current economic growth is, according to the survey, only 2 percent.
Employers will Contest Tripartite Bill at Constitutional Court
Representatives of the National Employers' Association (RUZ) and the Slovak Association of Employers (AZZZ) decided to file a complaint at the Slovak Constitutional Court against the tripartite bill. The revision to the tripartite law signed by President Ivan Gasparovic into law on March 6 also indirectly amended the Act on Collective Bargaining. RUZ secretary Martin Hostak reported that, according to the approved regulation, higher collective agreements now also apply to subjects that had not signed them, which is at odds with the freedom-of-contract principle and, thus, with the Slovak Constitution.