Search results for

The second largest bank in the country, TuranAlem informed that it placed GBP 200mn Eurobonds. The coupon rate was set at 7.125%. This is the first issue nominated in GBP made by a bank from the former Soviet Union . Deutsche Bank acted as organizer of the deal.

Country starts talks with neighbours on Adriatic fishing zone. European integration minister Kolinda Grabar Kitarovic and EU enlargement commissioner Olli Rehn confirmed that the country was holding talks with neighbours on the Ecological and Fisheries Protection Zone (EFPZ) in the Adriatic . The decision to establish the zone has passed through the parliament but its activation was delayed due to the protests of Slovenia and Italy . Rehn said he was confident the talks would bring results and would prevent unilateral decision making on any side. Earlier, the EC warned Croatia against making unilateral moves as regards EFPZ. The government insisted it would activate the zone as it was the country’s right to do it.

Markets expect foreign trade deficit to shrink by 40% y/y in October. The deficit on the foreign trade should drop to SKK 4bn for October, down by roughly 40% y/y, according to a poll among market analysts. The lower trade gap forecast was explained by expectations for accelerating of the export growth with the launch of new export capacity in the transport equipment sector. Data for the industrial output for the month confirmed that the output of the sector increased markedly, which should be related to higher sales abroad as it is mainly export-orientated. At the same time, the growth of the imports was projected to slow down for the month. This should be on account of the drop in the oil prices on the international markets but mainly to the completion of stock accumulation of large companies, which was believed to be behind the strong growth rates of the import, registered in the Q3 months.

Bourse launched trading with ECM warrants. Warrants issue of the property developer ECM Real Estate Investments started trading on the Official Free Market of the Prague Stock Exchange (PSE) on Dec 11, the bourse announced. The specialists for managing the warrant issue trading will be domestic bank HVB Bank CR. ECM has issued 1.72818mn warrants, which are traded in CZK, but are finally settled in EUR. The warrants mature on July 22, 2011 . The open price in the automatic trades has been set at CZK 845 per security, while that on the SPAD trades – CZK 860. In the meantime, as of Dec 11, the ECM share issue has been switched from conditional to regular trading regime on the bourse Main Market as all conditions for this have been fulfilled. As a result, the ECM share issue will be included in the PX-GLOB Index base with 3.735mn securities as of today, Dec 12.

Bahrain’s much anticipated retail and leisure development on Amwaj Island, has experienced overwhelming interest from potential lenders.

Food group Agrokor opens new farm worth EUR 2mn. The food and trade group Agrokor opened a HRK 15mn (EUR 2mn) calf breeding farm near Ivanic Grad, close to Zagreb . The production from the farm is to reach 4,000 calves or 800 tonnes of livestock annually or 440 tonnes of white veal annually. Agrokor said that it had invested more than HRK 300mn in farming and cattle breeding in the last two years and the company’s meat sales should exceed HRK 1bn in the coming years. Agrokor group includes the biggest retail chain Konzum, mineral water bottler Jamnica, ice cream producer Ledo, edible oil producer Zvijezda, and several agricultural plants.

Airlines AeroSvit to raise fares due to fuel prices hike. AeroSvit and state-owned Ukraine International Airlines (UIA), the two biggest airlines in the country in terms of passenger fleet, reported the coming up increase of cost of aviation fuel, which they plan to pass on to their customers by raising the fares. According to the companies’ officials the prices for fuel will go up by 20-25%, despite the recent price decline on the world oil and petroleum products market. AeroSvit ended 2005 with a net profit of USD 200,000 (UAH 1mn), while UIA finished the same period with USD 82,000. On a separate note, the SPF plans to privatize UIA in 2007 and already announced a tender for an appraiser to determine the real market value of 100% stake in the company.

MC left base rate unchanged at Nov 20 sitting with 7-to-5 vote. The Monetary Council (MC) of the National Bank of Hungary (NBH) discussed only two options at its Nov 20 sitting - “on hold” and 25bps hike – and the decision was taken with 7-to-5 majority, the minutes from the meeting revealed. The outcome is fully in line with previous reports and considering that the absent member is largely perceived as a “hawk” the vote shows increasingly divided council. Proponents of unchanged base rate argued that the decline in domestic demand could have stronger disinflationary impact than the one assumed by the central projection of the November Inflation Report. We recall that the latter envisages headline inflation to slow down to 4.1% in 2008 and the core index to 4% (NBH’s price stability target is defined as 3% inflation in the mid-term). The “doves” stressed that estimates in NBH’s forecasting models used sample period over which real wages had not fallen, while exactly that was the case in the mid-term and thus the demand contraction impact might be underestimated. Furthermore, the majority of MC members deem that “wait-and see” approach was necessitated as the full impact of the hitherto tightening has not been revealed, while international environment remains benign. Recent steep rises in wage and CPI inflation are attributed to one-off factors by the “doves” and their stance is that hike would be necessary only of change in that situation occurs. On the other hand the main argument of the supporters of a 25bps hike expectedly was the risks related to rise in inflationary expectations. Furthermore, this camp stressed the marked expectations for further tightening and noted that NBH’s credibility and commitment to disinflation could be hurt if it did not acted accordingly. The next rate-setting meeting of the council is scheduled for Dec 18.

GDP growth decelerates to 5.8% y/y in Q3. GDP growth decelerated to 5.8% y/y in Q3 from the revised 6% y/y increase in the previous quarter, the Czech Statistical Office (CSO) data revealed. Thus, the Q3 slowdown appeared lower than that expected by the markets, according to which the GDP expansion was to decelerate to 5.3%. In the first three quarters of 2006 GDP expanded by 6.1% y/y up from 5.9% y/y increase in Jan-Sep/2005. Exports, growing by 11.4% y/y, contributed most (9.7pps) to overall growth in Q3. However, the external sector lost its role of key source of economic growth which was observed in Q2/2004-Q1/2006 as its overall contribution to GDP expansion was only 0.4pp because imports increased by 10.6% y/y. Thus, fixed investments transformed to the main driving force behind the economic growth as they reported 7.2% y/y expansion in Q3, up by 0.5pp q/q, and their contribution reached 2pps. Their acceleration was mainly supported by the low interest rates and the favourable economic environment in the country. Meanwhile, the inventories increased by some CZK 24.2bn (EUR 855mn), representing 4.2% of GDP as compared to 6.6% in Q2, thus also contributing to the registered 13.6% y/y gross capital formation growth. Furthermore, the households’ consumption added 4% y/y, down by 0.1pp q/q, while government consumption declined for a second consecutive quarter (by 2.6% y/y). The households’ consumption stable growth was mainly supported by the strong real wages increase (up by 3.1% y/y), as well as by the moderate inflation, the low interest rates and the increased disposable income as a result of the reduced tax burden on natural persons. On the supply side , manufacturing (13.9% y/y growth) and wholesale and retail trade (up by 11.5% y/y), as well as transport and storage (up by 4.9% y/y) contributed most to the GDP expansion. The construction reported 5% y/y growth, while mining and quarrying reported the highest y/y expansion (23.1%). At the same time, gross value added in agriculture dropped by 6.4% y/y due to extremely bad weather. Commenting on GDP data, the Czech National Bank representatives said that the Q3 data was in line with the central bank projections in terms of both levels and structure. Still, in regional comparison, the robust Czech economy expansion, equal to that in Poland , was surpassed by that reported by Slovakia (9.8% y/y), but higher than that in Hungary (3.8% y/y).

Chris Garnett interviewed Baudouin Prot, chief executive of BNP Paribas at the recent Euromoney Paris Forum.

CNB Board unanimously decided to leave rates unchanged at October sitting. The Czech National Bank (CNB) Governing Board unanimously decided to keep interest rates flat at 2.5% at its last monetary session at end-October, reports the national bank in Minutes of the Board. The inflation in October (1.3% y/y) was 0.3pps below the projections with the deviation being due to the lower-than-expected food prices increase and lower adjusted inflation excluding fuels; on the other hand, regulated prices, fuel prices and the estimated impacts of indirect taxes changes were broadly in line with forecasts. Still, the adopted law on raising the indirect tax on tobacco is expected to have some 0.3-0.4pps higher contribution to inflation in 2007 than earlier projected. In addition, the agricultural and industrial producer prices growth also appeared lower than the projected one, the minutes read. At the same time, central bankers did not consider there is risk to economic activity forecast, under which GDP growth is to further slow down to 5.4% y/y in Q4. Thus, the Board agreed that the risks to the forecast were on the downward, but, as long as they could result from combination of several transitory anti-inflationary factors, the central bank is not to react impulsively. In the meantime, regarding the exchange rate developments, it was concluded that the observed at present CZK appreciation might also represent another downside risk to inflation.

Middle East countries might look close geographically, but their debt regimes are very diverse. Here are the overriding factors in fixed income for the GCC region.