Economic News Summary
27. júna 2003

Employees of Bankrupt PPS Detva Blocking Road

At 8 a.m. on Thursday trade unionists of the bankrupt engineering company PPS Detva Holding, a.s. have launched an indefinite blockade of the Zvolen-Lucenec road at Detva. They claim they will block traffic until their demands are met. Trade union boss at the company Stanislav Luptak said that they want just one thing: a recommendation of the company’s four largest creditors to the court to sell PPS to one of the two potential investors. The only way to prevent the company’s collapse is to recommend to the court its sale, insists Mr. Luptak, saying that any other steps would be camouflage.

Coalition Redistributed Funds for Highway Construction

After the ruling coalition meeting late Wednesday, head of the Party of the Hungarian Coalition (SMK) Bela Bugar reported that coalition partners agreed on the redistribution of the funds that the state budget has allocated for highway construction. Sixty percent of the highway allocation would be used for the construction of the so-called northern route of the Bratislava-Kosice highway. Previously 85 percent was allocated for this purpose. The saved funds will be used to complete the highway sections of the southern route.

Slovakia’s Gross Foreign Debt Down to USD 13.811 Bln. in March

According to preliminary data from the National Bank of Slovakia (NBS), the total gross foreign debt of the Slovak Republic was USD 13.811 billion at the end of March 2003, down by USD 487.6 million from January. Long and short-term foreign liabilities reported a drop, the NBS informed SITA on Thursday. Total long-term foreign debt fell by USD 126.3 million in a month to stand at USD 9.053 billion in late March.

Confidence Indicator in Retail Sector Down to 12 Percent in June

According to an economic outlook survey conducted by the Slovak Statistics Office in June, the confidence indicator in the retail sector dipped 5 percentage points from May to 12 percent. Mainly the more pessimistic expectations concerning the business situation in the next three months were behind the decrease. On the other hand, a factor balancing the decrease was lower stocks of products and the balanced evaluation of the current business situation.

Confidence Indicator in Industry in June Has Reached its Highest This Year

Optimistic expectations of industrial producers regarding output brought about an improvement in the confidence indicator in industry by 8 percentage points, which after April’s 11 percentage points has been the second highest value this year. According to an economic outlook survey conducted among industrial producers by the Slovak Statistics Office in June this year, the confidence indicator in industry showed a 4-percent month-on-month increase. According to the survey, industrial output has declined in 21 percent of polled industrial producers over the past three months, while there were no changes in output in 43 percent of the respondents, and 36 percent of the companies reported an increase of output.

Confidence Indicator in Construction Down 2 Points in June

An economic outlook survey conducted by the Slovak Statistics Office indicates that the confidence indicator in the construction industry dipped 2 percentage points on June to 15 percent as a result of negative evaluation of overall demand for construction production. In the past three months the construction activity trend rose by 29 percentage points. Compared with the results of the latest survey the number of companies reporting activity growth increased by 26-percentage points to 64 percent. From the viewpoint of size, construction output grew most in large companies with over 500 employees.

Supreme Court Rejects a Claim for Delay Interest on FNM Bonds

On Wednesday, the Supreme Court decided in favor of the government privatization agency the National Property Fund (FNM) in the first of a series of lawsuits concerning payment of alleged interests from delay of FNM bond redemption. The court thus confirmed the FNM’s stance that bond were matured for the whole year 2001, and the FNM acted in accord with the current legislation, stated FNM spokeswoman Tatjana Lesajova. „Since all the lawsuits concerning payment of alleged delay interests on bonds are identical, we are positive that the next cases will be concluded in the same way,“ said Ms. Lesajova.

Suspended Systemic Fee will Cost SE SKK 400 Mln. in Lost Income

The suspended introduction of the so-called systemic fee that companies producing their own electricity were supposed to be charged for connection to the public grid will deprive power producer Slovenske Elektrarne (SE) of SKK 400 million, head of the SE trade section Pavol Ponca told the press on Thursday. The regulatory board of the Office for Regulation of Network Industries (URSO) made the decision that the systemic fee will not be introduced until the end of this year on Wednesday. Originally the fee of SKK 175 per megawatt of electricity produced should have been charged since January. However, the URSO has suspended its effect for six months, and subsequently the supreme body of the market regulator decided to cancel the fee for this year.

POP Index of SRA Agency Rises to 40.5 Points in June

The index of assumed production volume, POP, that shows expectations of future development in industry and construction sector, grew over 6 points to 40.5 points in June. Compared with June 2002 the index increased 9 points. The structure of the index mirrors significant improvement in expectations in industry. Following the May decrease, expectations of output in industry increased again this month, while output expectations in the building industry remained roughly at the level of the previous month, Katarina Kohutikova, analyst of Slovenska Ratingova Agentura (Slovak Rating Agency — SRA) informed SITA.

Water Utilities to be Assisted with Applications for EU Funding

At its meeting on Thursday, the cabinet approved an Environment Ministry request to use ISPA funds to finance professional assistance provided in project preparation for drawing finances from the EU cohesion fund for the purpose of water management projects. The request aims to secure professional assistance for beneficiaries of cohesion fund financing in developing completed applications and preparing tender documents for water management projects. Total costs of this assistance project are estimated at EUR 6.66 million, while the state budget should contribute EUR 1.665 million to this sum. The requested ISPA grant represents 75 percent of eligible costs for project implementation.

Cabinet Adjourns Discussion on Recovering Old Russian Debt

At its Wednesday’s meeting the cabinet, adjourned discussion of the recovery of old Russian debts toward Slovakia based on a request made by Defense Minister Ivan Simko. The Slovak Republic should recover USD 198.3 million of its claim against the Russian federation this year. The total Russian debt to Slovakia should thus drop from USD 295.7 million to USD 97.4 million.

Cabinet Approves Further Liberalization in CEFTA Farm Trade

The Slovak cabinet approved an amendment on Thursday to the Central European Agreement on Free Trade (CEFTA) that increases the volume of duty free farm trade between Slovakia and Hungary. The liberalization measure was agreed on in April of this year at the third and final round of trilateral negotiations between Slovakia, the Czech Republic and Hungary on further trade liberalization in farm commodities. It will be implemented from July 1 until June 30 2004.

NBS Governor Jusko Attends ECB General Council as Observer

Governor of the National Bank of Slovakia (NBS), Marian Jusko, along with central bank governors of other nine future EU members participated for the first time as observers at a meeting of the General Council of the European Central Bank (ECB). An exchange of views on economic, monetary and financial developments in the eurozone, non-eurozone member countries and accessing countries featured on the meeting’s agenda, NBS informed SITA on Thursday.

ZNSP Board Approves a New Organizational Structure with Job Cuts

The board of directors of aluminum smelter ZSNP Ziar nad Hronom approved a new organizational structure of the company this week. Based on this restructuring plan the company will lay off 578 employees from August 1. Thereof 177 will be white collar staff and 127 will be service staff. By adopting of the new organizational structure and its implementation, the company is continuing an unavoidable process of restructuring that began after privatization in November 2002, management announced on Thursday. The company already announced layoffs of over four hundred workers in January from its workforce of 2,600. It said then that in 2002 payroll costs exceeded SKK 850 million while the average wage was SKK 18,567.

Insurance Companies in Slovakia Close Last Year SKK 853.6 Mln. in Red

Insurance companies operating on the Slovak market closed last year SKK 853.6 million in the red, while they earned a profit of SKK 825 million in 2001. Eleven insurance companies were loss making, and 17 showed a profit. The economic result in the sector was chiefly influenced by an SKK 1.351 billion loss by the largest Slovak insurance company, Slovenska Poistovna, stemming from the negative valuation difference of SKK 1.76 billion in the sale of IRB bank shares, according to a report elaborated by the Financial Market Office.

Cabinet Agrees to Open Temporary Import Quota on Rape Seed

At its session on Thursday the cabinet agreed to open temporary customs quotas for the import of rape seed. The rape seed import quota should be open from August 1, 2003 until late 2003. According to the Ministry of Agriculture, an unlimited rape seed import quota was required due to crop damage caused by frost, while this year’s shortfall is expected at 58.6 percent of the total sown acreage.

Tesco Retail Chain to Open its Largest Store in Slovakia in August

Construction of the largest Slovak hypermarket of retail chain Tesco located in Bratislava, the 13th store owned by the retail chain in Slovakia, is coming to its final stage and the store is planned to open in August of this year. The construction costs of the hypermarket are approaching SKK 750 million, said Jiri Tenk, director of the Tesco Stores construction department for the Czech Republic and Slovakia at a press conference on Thursday. The total size of the largest hypermarket in Slovakia will be 11,500 square meters and its parking lot will have a 740-car capacity. The new hypermarket will employ 490 people.

Agricultural Payment Agency to Begin Functioning on November 1

On Thursday, the Slovak cabinet approved a draft bill on the Agricultural Payment Agency and support to farmers. The agency will be established from November 1 this year, with the task of securing, drawing and redistributing EU funds to Slovak farmers. The law shelters administrative tasks associated with the future single agricultural policy of the European community. Currently the Slovak Agriculture Ministry is building structures, which will form the basis for the agency. The SAPARD agency and the Agricultural Intervention Agency will also merge into this payment agency. About 320 employees from the ministry will be re-deployed to the payment agency.

SE Power Utility Restructuring will Involve Job Cuts

A restructuring plan for power utility SE, a.s. for the 2003 to 2005 period, calculates job cuts at a rate of 4 percent every six months in its core business. „This does not mean that every six months 4 percent of employees will be fired,“ director general of SE Miroslav Rapsik told the media on Thursday. One way to achieve this goal is to halt recruitment of new employees. „A subsequent natural fluctuation [of staff] is a certain instrument that according to my experience will enable us to achieve the set goal,“ he added.

Local Currency Still in High Demand on Slovak FOREX Market

Demand for Slovak crown purchases prevailed on the Slovak FOREX market on Thursday. The crown opened at 41.62/41.67 SKK/EUR on Thursday. Although it first weakened to 41.70/41.73 SKK/EUR under the influence of FOREX purchases, it later got back to 41.61/41.65 SKK/EUR as a result of persisting demand in the local currency. The US dollar firmed to 1.1449 USD/EUR on Thursday. The crown was thus calculated at 36.34/36.39 SKK/USD. The cross rate of the Slovak and Czech crowns was 1.3225/1.3245 SKK/CZK.

MONEY MARKET: One-Day Deposits Down to 4.9/5.1 % Thursday

The Slovak money market reported a calm atmosphere with tom/nexts and spot/nexts prevailing in Thursday’s trading. SKK 3 billion worth of maturing one-year government bonds with an SKK 250 million coupon returned to the market on Thursday. The price of one-day deposits thus went further down to 4.9/5.1 percent p.a.One-week deposits were available at 5.9/6.1 percent p.a., two-week deposits at 6.0/6.2 percent p.a. and one-month deposits at 6.1/6.3 percent p.a. Two and three-month deposits remained unchanged at 6.1/6.3 percent p.a., while the final price of six-month deposits was 5.8/6.0 percent p.a. Nine-month deposits oscillated around 5.6 and 5.8 percent p.a. and twelve-month deposits were at 5.5/5.75 percent p.a.

STOCK MARKET: SAX Index Weakens to 0.92 Percent 153.71 Points

Under the influence of shares of former steel maker VSZ, pharmaceutical maker Slovakofarma and OTP Banka, the official SAX share index weakened 0.92 percent, or 1.43 percentage points to 153.71 points on Thursday. Turnover on the Bratislava Stock Exchange (BCPB) decreased from SKK 2.088 billion on Wednesday to SKK 1.648 billion on Thursday with about SKK 10 million in share trading.

Cabinet Agrees to Sell Public Bus Transporter SAD Zilina to SIRS

Zilina-based Slovenska Investicna a Realitna Spolocnost, a.s. (SIRS) will acquire shares of public bus transport company Slovenska Autobusova Doprava (SAD) Zilina. The firm should pay SKK 140 million for a 49-percent stake in the company. After the buyer meets required conditions, the buyer will be able to acquire additional 17 percent for SKK 48.572 million, the Slovak cabinet agreed at its regular session on Thursday.

Tento projekt je podporený z Európskeho sociálneho fondu


22. 9. 2020

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