Economic news released by SITA on October 11
Headline Inflation Slowed to 4.6 Percent in September
Consumer prices in Slovakia dropped 0.3 percent over September. In August however they remained unchanged from the previous month. Year-on-year headline inflation was 4.6 percent in September: down 0.5 percentage points from August. On average for nine months of this year, consumer prices grew by 4.6 percent, Statistics Office of the Slovak Republic reported on Wednesday.
Crown Hits New Historic High on Wednesday
On Wednesday morning the Slovak crown reached its new historic maximum towards the euro when it was traded at 36.875 SKK/EUR. The local currency strengthened already on Tuesday evening. Its exchange rate firmed to the record-breaking 36.910 SKK/EUR. The crown opened the Wednesday session at the same level, reported UniBanka dealer Patrik Malec. He confirmed that in the recent days players on the market show increasing interest in the Slovak currency and also the favorable mood on neighboring markets encourages this trend.
Domex 2005 Sales Lower, Profit Higher
The construction engineering company Domex, s.r.o., Bratislava, reported lower sales and a considerable jump in profit last year. Sales of its own products and services dropped 8.4 percent y/y to SKK 223.6 million while a year ago the increase was 67.7 percent. Net profit rose more than five times to SKK 7.4 million. Added value was minus SKK 24.4 million, but a year ago it was SKK 23.9 million. Other operating revenues represented SKK 46.3 million.
Business Alliance Values Approval of Electronic Highway Toll Most
The Business Alliance of Slovakia (PAS) has evaluated the first hundred days Prime Minster Robert Fico's government, which began this summer. PAS gave the highest mark to the approval of the draft law on the electronic highway toll. PAS evaluated the government's steps on a scale ranging from -300 to 300 points and the electronic highway toll gained 54 points. In contrast, the worst step by the current government, which earned it -179 points, was measures to reduce energy prices.
Autorenova Paracka Wants to Quit Stock Exchange
Shareholders of the company Autorenova that is involved in maintenance and repair of Avia and Tatra trucks decided to terminate trading in all of the firm's shares on the Bratislava Stock Exchange (BCPB). The regular general shareholder meeting on September 14 decided on quitting the stock exchange. The firm now is obliged to make a mandatory takeover bid for shares by shareholders not upholding the decision and shareholders who failed to attend the general shareholder meeting.
Johns Manville Slovakia Records 2005 Output of SKK 4.437 Bln.
Fiberglass-materials maker John Manville, a.s., Trnava, increased output 14.4 percent to SKK 4.437 billion in 2005. However, the company ended in the red because losses were SKK 69.4 million. In 2004, the company generated a taxed profit of SKK 720.7 million. Sales of its own products and services reached SKK 4.166 billion, up 10.6 percent y/y. Production costs went up SKK 18.8 percent to SKK 2.735 billion. Revenues from goods sold went up 82.3 percent to SKK 11.5 million while costs related to revenues from goods sold increased 53.9 percent to SKK 12.1 million.
Cabinet Approves 2007 Draft State Budget
The Slovak Cabinet approved the 2007 draft state budget at its Wednesday session. Prime Minister Robert Fico informed that Slovakia's 2007 public-finance deficit should be 2.9 percent of GDP, including the influences from the introduction of the capitalization pillar of the retirement pension-scheme. Thus, Slovakia should keep one of the Maastricht criteria for euro adoption, according to which the public-finance deficit cannot exceed 3 percent of GDP. Mr. Fico informed that the government made only minor changes to the draft the Finance Ministry submitted. This put the public-finance deficit at SKK 52.6 billion when calculated according to ESA 95 methodology. The 2007 public-finance deficit was proposed at SKK 38.9 billion. Total budgetary incomes were projected at SKK 308.1 billion, and expenditures were budgeted at nearly SKK 347 billion.
INESS Fears New Government May Thwart Economic Activity
The Institute of Economic and Social Analyses (INESS) gave a negative mark to Slovak Prime Minister Robert Fico's government's performance, given the impact of its activities on Slovakia's economy. Not even the good news that the new government will observe the maximum 3 percent public-finance deficit set for euro adoption could influence INESS final evaluation of the first 100 days of Mr. Fico and his team.
Central Bank Shows SKK 1.7 Bln. Loss Nine Months into 2006
The National Bank of Slovakia (NBS) showed an SKK 1.7 billion loss at the end of September 2006. Central bank informed that this figure does not include differences from the valuation of financial assets or assets and liabilities in foreign currency. In line with new legal norms in the accounting segment valid from January 1, 2006, differences from valuation affect equity of the NBS. Losses from the valuation of financial assets and assets and liabilities in foreign currencies will affect the NBS' economic result as of December 31, 2006. As at the end of September, losses from valuation reduced NBS' equity by SKK 13.1 billion.
Trellis Improves 2005 Revenues 74.6%
The company Trellis, a.s. Trencin, had 2005 operating revenues of SKK 173.9 million, up 74.6 percent y/y. The company develops and launches operating and IT systems. Operating costs went up 54.4 percent y/y to SKK 135.9 million. "The most significant factor that influenced 2005 operations, was the 2004 entry of French concern Vinci into our company," Trellis director Jozef Mertan told SITA News Agency. He added that Trellis subsequently became one of the sub-contractors of the Trnava-based car plant PSA Peugeot Citroen.
Paska Hopes That SMER-SD Will Stay Member of European Socialists
Speaker of Slovak Parliament Pavol Paska is sure that the membership of Prime Minister Robert Fico's SMER-Social Democracy (SMER-SD) in the Party of European Socialists (PES) will not be revoked. He said this to SITA news agency after meeting with the Speaker of the President of the European Parliament Josep Borrel in Brussels on Wednesday. PES demands the suspension of SMER-SD's membership because of its objections towards the presence of the ultra-right SNS in Mr. Fico's government
Ministry Has Not Yet Asked Slovak Telekom for Dividends
The current leadership of the Transport Ministry, which controls 34 percent of Slovak Telekom, a.s., (ST), so far has not initiated a payout of dividends from ST shares. Only an extraordinary general shareholder meeting can discuss dividends, and shareholders themselves have to convene it.
Slovak Radio Backs out of Contract with BSP LP
Public service Slovak Radio director general Miloslava Zemkova informed on Wednesday that she withdrew from a contract with the company BSP Lawyer Partners (LP) that has been collecting the network's claims towards persons who did not pay compulsory listener fees. Ms. Zemkova told the parliamentary committee for culture and media that she has lodged a lawsuit on the violation of law tat took place by signing the contract by former SRo director Jaroslav Reznik . Ms. Zemkova decided for the step though she is aware of the risk that she and the public service institution take. Deputy Tomas Galbavy (SDKU) approved the step though he admitted he does not know details of the contract.
PO Car with 2005 Revenues at SKK 404 .2 Mln.
The company PO Car, s.r.o. Stropkov that is licensed retailer of car brands Skoda, Volkswagen and Audi reported total revenues of SKK 404.2 million last year. Sales of goods made up the biggest portion at SKK 332 million, going down 14.4 percent y/y. Cost of sales decreased 13.6 percent in the monitored period to SKK 329.2 million. Sales of own products and services jumped by 4.1 percent to SKK 72.2 million. Net profit exceeded SKK 7.8 million, representing a considerable jump from SKK 942,000 in 2004.
Union Health Insurer Reports Over 491,000 Applications
As of October 10, the new health insurance company Union Zdravotna Poistovna, a.s., (UZP) has reported to the Healthcare Supervision Office (UDZS) 491,473 applications of clients, who want to become its policyholders. Spokesperson of the insurance company Drahomira Jurikova informed the press. The Healthcare Supervision Office (UDZS) has registered 548,770 applications to change health insurance companies.
Analysts Perceive Positively the Approved Draft State Budget
Analysts evaluate positively the draft state budget for the next year and the draft public administration budget for 2007 to 2009. "Despite pre-election promises of the ruling parties, the public administration deficit will not exceed 3 percent of the gross domestic product (GDP), which will mean that the budgetary criterion for adoption of euro should be fulfilled," said Tatra Banka analyst Juraj Valachy. He pointed out to the fact that the structure of budgetary expenses has changed. More stress is put on the immediate consumption than on investment into future. "It is important for financial markets that the state budget will create room for fulfilling of the Maastricht criteria, which will have a positive influence on the exchange rate of the Slovak crown. On the other hand, focus on consumer expenses can spur inflation, which will make it a little bit more difficult for the National Bank of Slovakia to ensure the required inflation," added Mr. Valachy.
Repo Tender Settlement Leaves Money Market in Liquidity Surplus
Following the settlement of the central bank's two-week repo tenders on Wednesday there was liquidity surplus on the interbank market. Postova Banka dealer Alzbeta Zahumenska said that SKK 148.66 billion left the sector from the Tuesday repo tender on an influx of SKK 183.292 billion from the maturing two-week sterilization deal.
Health Insurers Dovera and Sideria Report 178,000 Applications
As of October 10, health insurance companies Dovera and Sideria have reported to the Healthcare Supervision Office (UDZS) over 178,000 applications of clients, who want to become their policyholders. Public relations manager of Dovera insurer Radoslav Bielka informed that as much as 75 percent of the applications have arrived from clients of the Slovakia's biggest health insurer Vseobecna Zdravotna Poistovna (VsZP). The Healthcare Supervision Office (UDZS) has registered 548,770 applications to change health insurance companies.
EXIM Bank to Support SKK 81 Bln. Export Next Year
Slovak EXIM Bank wants to support SKK 81.2 billion worth of exports through its banking and insurance activities next year. This should be 6.4 percent of the assumed total exports of Slovakia in 2007. Compared with the bank's budget for the current year, exports supported by the bank should increase by SKK 7.2 billion or 9.7 percent. This results from a draft budget of the EXIM Bank for the year 2007. The Slovak Cabinet greenlighted the document at its session on Wednesday.
No Funds for Bratislava Airport in the State Budget
There are no funds allocated for Bratislava airport in the draft state budget for next year, informed Transport Minister Lubomir Vazny after the Cabinet's session on 2007 state budget on Wednesday. "Airport is an independent legal entity, which has to solve its modernization by its own means," said Mr. Vazny. However, in the second half of August Mr. Vazny presented a business plan of airport development according to which about SKK 3 billion to SKK 4 billion should have been invested in the airport by 2010 with a new terminal a priority. The money should have been secured from state coffers and EU co-funding.
Finance Minister Most Satisfied with the State Budget, Says Jahnatek
Economy Minister Lubomir Jahnatek thinks that the state budget author, Finance Minister Jan Pociatek, was the person most satisfied with the state budget. "I think that other ministers expected more, however, a quite reasonable compromise was reached," said the minister during the Cabinet's session on Wednesday. In his opinion the budget is quite restrictive and they managed to patch up well the budgetary holes, which were left from the last year. "If we had not had the debts from the last period, more funds could have been earmarked for development programs," said Mr. Jahnatek.
Buyback of Transpetrol Shares is at Deadlock
The issue of the buyback of a 49-percent stake in crude-oil pipeline company Transpetrol, controlled by the Dutch unit of the insolvent Russian oil major Yukos, Yukos Finance B.V. is not solved yet. "Negotiations are still continuing. The situation between the Russian side and the former Yukos Finance management is not clear. It is not very nice that lawyers entered the whole problem and this is where the logic ends," said Economy Minister Lubomir Jahnatek for SITA news agency. He thinks that a solution has to be found between the old management of the Dutch unit and the official receiver of bankruptcy assets. "It would be very bad, if the operation of Transpetrol continued without any control of shareholders," added Mr. Jahnatek. Minister would be glad if the buyback were solved by the end of the year.
FOREX MARKET: Slovak Crown Beats Spring Record
Already on Tuesday evening the Slovak crown firmed and broke through the record from the spring of this year of 36.920 SKK/EUR. CSOB dealer Richard Brza further informed that also other currencies in the region firmed. "London banks were selling large volumes of foreign exchange and focused in particular on the Hungarian forint and the Slovak crown," said the dealer. Thus the strongest point the Slovak crown reported on Wednesday was 36.860 SKK/EUR. It weakened a bit at the end of the trading session.
STOCK MARKET: Bratislava Stock Exchange Weakens on Wednesday
The Bratislava Stock Exchange (BCPB) weakened on Wednesday. VUB shares pulled down the value of Slovakia's official SAX share index 0.79 percent or 3.21 points to 400.89 points. Turnover on the Bratislava Stock Exchange (BCPB) dropped from SKK 45.068 billion on Tuesday to SKK 148.473 million on Wednesday with only SKK 238,000 in share trading.