Search results for

Mittal Steel Ostrava’s merger with its unit VPO approved. The merger of steelmaker Mittal Steel Ostrava (MSO) with its 100% unit the pig iron producer Vysoke Pece Ostrava (VPO) has been approved by the Ostrava regional court, daily Hospodarske Noviny wrote. The merger, to be legally completed by Dec 31 and under which MSO will take over VPO capital, assets and liabilities, was approved at MSO AGM in July. We note that MSO became sole owner of VPO in February, when it acquired the remaining 33% in VPO. The merger is aimed at fulfilling the EU requirements for Czech Republic ’s steel industry restructuring.

S&P confirms country’s long-term credit rating at A. The international credit rating agency Standard&Poor’s affirmed the A long-term and the A-1 short-term credit ratings of Slovakia , the agency informed. Both ratings have a stable outlook. The agency explained that the country sovereign rating was based on the fast implementation of structural reforms as well as the robust economic growth outlook and the chances for adopting the euro from the beginning of 2009. S&P stated that the entry in the eurozone should reduce the financing risks, stemming from the relatively high gross external debt and would thus improve the creditworthiness of the country. On the negative side, the ratings were constrained by some downside risks from the unclear fiscal policy as part of the declared intentions of the new government in this field were regarded to be out of line with the fiscal consolidation process. These were the expansion of the welfare state and the tax and social security contributions reduction. S&P noted that a marked turnaround of the fiscal policy was not considered as likely but the uncertainty from the public finances development remained. The agency underlined that the future upgrade of the ratings was dependent on continued reforms in key sectors like social security and labour market. It pointed out that they should ensure a balanced and sustained economic growth, which, however, should be also accompanied by continued reduction of the general government deficit. S&P emphasized that a significant delay in joining the eurozone would put downward pressure on the credit rating.

Reuters poll: MC to keep rates on hold on Dec 18. The Monetary Council (MC) will keep the base rate on hold at the next rate-setting meeting on Dec 18, according to the unanimous forecast of 17 analysts polled by Reuters . The survey was carried between Dec 11 and Dec 13 and the outturn should not be surprising against the background of 9.5-month high of the HUF against the EUR as well as November’s inflation figure being in line with the expectations. The consensus forecast also suggests that the central bank will not alter rates at the January rate sitting also. Narrow majority of the respondents expect that the MC would embark on monetary easing cycle as of H2/2007, while some analysts deem that the cuts could be launched still in the first months of the next year, given that capital inflows remain strong. The median forecast put annual average inflation at 6.6% in 2007, including a peak at some 8% in the first months, at 3.8% in 2008 and 3.1% in 2009.

As it’s nearly Christmas or, if you want me to be unusually politically correct, the ‘holiday season’, I thought I’d run a little competition.

Central bank to maintain cautious policy next year. The central bank asserted that it will maintain its cautious stance on monetary policy next year. The bank has unveiled its monetary and exchange rate policy framework; the end-year CPI inflation target has been set at 4% for the next three years. The bank’s inflation target for this year was initially set at %5 however as of November, the annual inflation rate stands at 9.86%. The government has not revised the target despite the monetary authority has already said that it expected the end-year inflation to be between 9.2-10.6%. The central bank will continue to monitor public sector expenditures in the period ahead. Floating exchange rate policy will remain in place next year, and the central bank will continue to hold forex purchase auctions. The central bank said that it did not have any target for exchange rate and it would not use exchange rate as monetary policy tool.

Central bank governor Sramko talks down crown. The governor of the National Bank of Slovakia (NBS), Ivan Sramko, verbally intervened against the strong crown and stressed that it was firming too fast. The SKK/EUR rate continued to appreciate yesterday, reaching a new record level of 34.62. Its strengthening has been attributed to the favourable investor sentiments to the region as well as the solid macroeconomic fundamentals. Sramko, however, underlined that with the recent gains the crown was already overvalued. He explained that besides economic factors, the exchange rate was affected by low market liquidity. It caused large swings in the crown exchange rate even with small traded volumes. Sramko did not specify whether the central bank intended to intervene against the strong local currency, which is already close to the upper limit of its 15% range around the ERM II central parity of 38.455. Nevertheless, the crown corrected after the verbal intervention, closing at 34.75. In our opinion, the statement of the governor is actually the first step of the bank in this direction. As an immediate reaction, we expect that the NBS would refrain from raising the key interest rates at its policy meeting at the end of this month and in case the appreciation rate of the crown does not moderate we do not rule out direct market interventions to protect the ERM II participation. In case the crown breaches the 15% range around the central parity, it would definitely be excluded from consideration for joining the eurozone from the beginning of 2009 as planned.

PM Yanukovich visits Kazakhstan. The PM Viktor Yanukovich is on a working visit to Kazakhstan . On Dec the PM will hold a meting with his Kazakh colleague Daniel Akhmetov. It is expected that they will sign a mutual statements after the meeting. After this, Yanukovich will meet with president of Kazakhstan Nursultan Nazarbaev. The Ukrainian PM also is going to visit Industry Settlement in Astana city, where he will participate in ceremony of the laying of the first stone in construction of the Ukrainian national culture centre “Oberig”. During the ceremony Yanukovich will speak with representatives of the Ukrainian community in Kazakhstan . Yanukovich is expected to come back to Kyiv on the same day. The PM is accompanied by the Fuel and Energy Minister Mykola Rudkovsky, PM’s advisor Kostyantyn Gryshchenko and several other officials.

As it’s nearly Christmas or, if you want me to be unusually politically correct, the ‘holiday season’, I thought I’d run a little competition.

Cabinet approves state aid of SKK 1.4bn for six foreign investors. The government confirmed its decision to grant SKK 1.4bn of investment aid for six foreign investors, economy minister Lubomir Jahnatek disclosed. The support was approved under a fast procedure in order to be passed before the end of the year and avoid a cumbersome procedure under new EC rules from the beginning of 2007. Around 50% of the investment incentives would be under the form of tax relief. Car component makers Johnston Controls and Visteon International would receive the larger part of the approved aid of SKK 496mn and SKK 415mn respectively. The cabinet also approved in a confidential document the new investment contract with car maker Kia Motors, which planned to expand its engine production in the country. The document is yet to be approved by the EC but reportedly, it included state aid, amounting to 15% of the total investment cost, which was estimated at SKK 8bn. The government also earmarked SKK 142mn for as state aid for preparatory works on the SKK 15-16bn investment of Korean electronics maker Samsung.

Royal Jordanian to select privatisation consultant by next week. Royal Jordanian’s chefs were in an earlier in dual day, a move made a rare (RJ) President and Chief Executive Officer Samer Majali told The Jordan Times on Wednesday that the privatisation plans for the airlines are progressing well. Majali further informed that the government is presently in the process of finalising a lead financial, technical and legal consultant; for the privatisation process. The appointment of the consultant is expected to be completed by next week. Majali said that the government plans to hold 26% stake, post-investment, in the airlines. The government along with Jordanian citizens will hold 51% stake. Meanwhile RJ has increased its passenger traffic to 1.82mn and its net profit for 2005 increased 25% y/y to reach JOD 21.7mn (USD 30.6mn). RJ’s capital stands at JOD 72.5mn.

As it’s nearly Christmas or, if you want me to be unusually politically correct, the ‘holiday season’, I thought I’d run a little competition.

Oil producer Mangistaumunaigas asks KASE to de-list its shares, but in vain. Oil producer Mangistaumunaigas asked local stock exchange KASE to de-list its shares because of a possible raiding threat. KASE refused to fulfil the request. According to the local stock exchange’s representatives, the company wants to be non-transparent. Presently, less than 3% of the company’s preferred shares are in free circulation. Some analysts believe that the de-listing procedure is needed to amend the share value of Mangistaumunaigas. As of Dec 8, the capitalization of the company was USD 14.992bn at the KASE. As we reported, recently rumours appeared about the possible sale of the company.