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In line with the European treaty establishing the principle of free movement of capital (the Single European Act), the National Bank of Romania (the NBR) recently repealed the last of its provisions impeding this free movement. The enactment (NBR Regulation 4/2006) sets out the new status of the foreign exchange market.

Mark Johnson interviewed to Daniel Bouton, chairman and chief executive of Societe General at the recent Euromoney Paris Forum.

JPMorgan is poised to unveil further changes to its foreign exchange (FX) business.

Mark Johnson interviewed to Daniel Bouton, chairman and chief executive of Societe General at the recent Euromoney Paris Forum.

Uncertainty and opportunity as Kazakhstan prepares currency float

Uncertainty and opportunity as Kazakhstan prepares currency float

Damac to develop USD 16.3bn complex in Egypt. According to the Khaleej Times, Damac Holding Group Chairman Hussain Sajwani announced that the Damac will develop a 320mn square feet residential and tourism complex north of Hurghada town on Egypt ’s Red Sea coast. Work on the 60bn dirham (USD 16.3bn) project is to commence next year. Plans include the construction of 5,000 villas, meant mainly for Arabs and Europeans, along with hotels, an 18-hole golf course and a marina.

Vodafone Egypt plans to acquire 3G license. Vodafone Egypt ’s Chief Executive Ian Gray, while speaking at a meeting of, investors and analysts, informed that the company is evaluating acquiring a 3G license in Egypt . Gray said that there are over 600,000 3G compatible mobile handsets being used in Egypt which offers a large and growing market. Egypt ’s National Telecommunications Regulatory Authority (NTRA) has earlier announced that it would charge any other operator, wishing to upgrade their 2G license, to 3G license, an amount equivalent to 20% of the bid price paid by Egypt ’s recent and third mobile licensee. In Jul 2006 Egypt licensed Etisalat of the UAE a license to offer 2G and 3G services at a price of EGP 16.7bn.

Egypt's Orascom Telecom subscriber base increases to 50mn. Egypt's Orascom Telecom on Thursday announced that its customer base has reached 50mn subscribers. Orascom Telecom subscribers have increased by 67% to 50mn, from 30mn from around a year ago. At end of Sep 2006 Orascom Telecom had a subscriber base of 46.5mn. Orascom’s Chairman Naguib Sawiris said that the company had set a target of 50mn subscribers by year end and has managed to reach the target ahead of time. Sawiris further said that Orascom now targets to reach 100mn subscriber mark by 2009.

FBiH collects KM 4.1bn revenues in Jan-Oct. The FBiH government collected KM 4.1bn (EUR 2.1bn) worth of revenues in the first ten months of the year, representing 13.1% y/y growth, ONASA reported. Municipal, cantonal and federal budgets revenues grew by 12.9% y/y to KM 2.578bn, of which federal budget revenues totalled KM 836mn. Revenues from taxes, fees, fines and non-tax income amounted to KM 1.775bn in Jan-Oct, up by 21.7% y/y; tax revenue accounted for 37.1%-share (KM 658.8mn, of which indirect tax receipts totalled KM 617.3mn, while corporate income tax receipts reached KM 39.3mn, soaring by 43% y/y. Some 35% of overall revenues were directed to non-budgetary funds, pension disability funds and health insurance and employment bureaus in particular; the cantonal budgets received about 34% of overall revenues, the federal budget - 20%, while municipal budgets and others were given 11% of overall funds.

Inventory accumulation drives economic growth in Q3. The GDP growth in Q3 accelerated to 9.8% y/y in comparison to 6.7% y/y for the previous quarter, the Statistical Office confirmed. In line with preliminary data, the piling up of inventories proved to be the main driving force behind the record performance of the economy. Gross fixed capital formation, which includes inventories, increased by 19.3% y/y in the period, picking up from just 1.4% y/y in Q2. At the same time, the investment in fixed capital, net of inventories, was up only by 6.7% y/y. In contrast, the contribution of the consumption was down as its growth slowed down to 5% y/y. This, however, reflected mixed developments with the private and public consumption. Whereas the growth of public consumption dropped considerably to 1.2% y/y for the period, the growth of the private consumption actually accelerated to 6.5% y/y. The buoyant household demand might be a lagged effect from the strong growth of the real wages since the beginning of the year as well as optimistic expectations for the future. In our opinion, however, this would not be interpreted by the NBS as a higher risk of demand pressures on the price level since the growth of the real wages actually moderated to 2.7% y/y in Q3 against 4% y/y in Q2. On the other hand, the expected positive contribution from the net exports did not materialize as the imports growth caught up with the exports at 22.9% y/y and 23.8% y/y respectively. The detailed breakdown of the GDP, in our opinion, shows rather that it would be too optimistic to expect the high growth rate to be maintained in 2007 as well, given that the inventories rather than the net exports account for the rapid economic expansion for the period.In contrast, the Statistical Office projected a 7.7% y/y growth for 2006 as a whole and forecast that it would remain high at 7.2% y/y in Q1 of next year.

Chinese Changhong opens TV sets assembly plant, to employ 100 people by end-year. Chinese company Changhong Europe Electric opened the first assembly hall in a plant in Nymburk, central Bohemia , where it will produce TV sets, CTK reported quoting Changhong’s foreign division head Yorkson Wang. By end-2006 the plant is expected to employ 100 people, while by end-2007 its workforce is to reach 300 people. The plant’s five assembly lines, which is the first Chinese greenfield investment in the Czech Republic , will produce LCD, plasma and CRT sets. Cooperation for the plant construction was provided by Torpera Limited, a unit of Czech financial group PPF, and China ’s Sichuan Changhong Electric. In Nymburk Changhong, which global turnover amounted to USD 2.2bn in 2005 and which employs over 30,000 people, also plans to build other production halls to produce other types of consumer electronics.