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If the reorganization is properly managed, they will be able finally to catch up in areas such as commodities.

It did take a bit of a sledgehammer approach – which I’m not averse to using – to get CLS to open up.

Egypt involved in USD 29mn barter deal with Kazakhstan. Egyptian Trade Ministry informed that agreement related to USD 29mn barter was reached with Kazakhstan . Under the deal, Kazakhstan will provide 120,000 tons of wheat. In exchange Egypt will supply medicines and carpets. The deal would be implemented in Jan and Feb 2007. The Egyptian ministry also informed that it may potentially import wheat worth USD 170mn per annum using barter deals. As we reported, earlier this month Egypt announced that it is interested in purchasing Kazakh wheat. The country imports nearly 6mn tons of grain annually, having consumption of 12-13mn tons. Egypt mainly buys grain from Canada and USA . However, this year the country purchased around 390,000 tons of grain from Russia . In turn, Kazakhstan may export around 6-7mn tons of grain this year, according to president Nursultan Nazarbayev.

MC decides to leave base rate unchanged at 8%. The Monetary Council (MC) of the National Bank of Hungary (NBH) decided to leave the base rate unchanged at 8% at its regular rate-setting meeting on Monday. We note that analysts were divided over “on-hold” decision and 25bps rate hikes, although the latter option was the consensus forecast in the surveys of both Reuters and business portal portfolio.hu . Thus the flat rates should not be deemed as major surprise particularly against some recent statements of governor Zsigmond Jarai, who traditionally uses rather “hawkish” rhetoric. More specifically, last week he said that “raising the base rate was not the only option” to counterbalance inflationary pressures. Despite the “on-hold” decision in our opinion the statement of the MC (as well as the November Inflation Report) signifies that the central bank might have not yet completed its tightening cycle. It appears that one of the main arguments of the “doves” is the downward impact on inflation from the output gap expected for 2007 and 2008. Furthermore the deficit reduction measures are expected to bring down inflation in the longer term by restraining consumption. Fully in line with expectations the other major factor for the not changing the base rate was the improved global investors’ sentiment and the consequent HUF appreciation. All that said, the MC still sees major upwards risks to the future path of inflation streaming mostly from potential “sustained rise in economic agents’ inflationary expectations” and the related increase in the wages in the private sector. In our opinion wage dynamics is going to increase its weight in the decision-taking process of MC in the forthcoming months.

Financial regulator okays EUR 27mn bond issue of construction firm Ingra. The country’s financial regulator (HANFA) approved the issue of HRK 200mn (EUR 27mn) bonds by the domestic construction and tourism company Ingra. The subscription for the five-year papers will be opened for five days. Other details will be released later.

We all remember the “Greenspan put”. Central Bankers are doing something similar with currency markets, and the consequences are similar: to delude investors into discounting risk, and delaying the inevitable.

VTB 24 to place RUR 6bn bonds and USD 500mn Eurobonds by end-2006. Vneshtorgbank’s retail banking arm VTB 24 plans to place RUR 6bn (USD 225.6mn) bonds and to issue USD 500mn Eurobonds by end-2006, VTB 24 head Mikhail Zadornov informed. According to him, the share of borrowings from international financial markets in should make up 20% of VTB 24’s funding base. This, he stressed, will allow a better diversification of the liabilities. It addition, the bank will be able to get long term funds at good price. VTB 24 is a part of Vneshtorgbank group. Vneshtorgbank holds 85.81% in VTB 24 and Federal Property Funds owns a 4% stake. The state’s ownership in Vneshtorgbank amounts to 99.9%.

APV sets maximum price of HUF 25,500 at public offering of Mol’s 1.73% stake. The State Privatisation and Holding Company (APV) set the maximum price at HUF 25,500 per share at the public offering of its 1.73% stake. We note that these shares are the last state-owned holding in the oil and gas company. We recall that in early October the board of APV decided on the general conditions for the sale, with HVB Bank mandated to organise the transaction. The shares will be sold with priority for private domestic investors. The sale is scheduled to take place between Nov 21 and Dec 1. If there are remaining shares after their demand is met, they would be sold via an auction on the stock exchange. Payment for the shares will be accepted both in cash and compensation coupons – total of 260,000 shares would be offered in exchange for compensation coupons. On Monday Mol’s share price closed at HUF 21,200 on the BSE.

Crown continues to strengthen vis-à-vis euro. The appreciating trend in the exchange rate of the crown against the euro persisted again, local dealers informed. The SKK /EUR rate firmed to 35.59 or close to its all-time record level of 35.56, set during last week trading. The outlook for the crown was positive for the near term as the markets expected that the currency might test the next psychological level of 35.5. On the other hand, small corrections to the gains of the crowns during the recent weeks were also projected although the upper limit for the trading was expected at 37.7. The strong crown is likely to play a key role in the NBS decision on the interest rates, which is scheduled for next week as the exchange rate appreciation contributes to an automatic tightening of the monetary conditions and decreases chances that the central bank would hike the interest rates.

Central Bank of Egypt appoints Sun Microsystems for IT solution. The Central Bank of Egypt (CBE) yesterday announced procurement of an Integrated Data Centre Solutions from Sun Microsystems from Sun Microsystems. Sun Microsystems will execute a project for CBE which will include technological solutions and applications for Integrated Data Centres. The project's budget is estimated at EGP 16.3mn (USD 2.8mn).

Italy’s Policentro opens EUR 150mn trade centre in Rijeka. The company Policentro Rijeka, part of Italy ’s Gruppo Policentro, presented the new trade centre Tower Center Rijeka, which will be officially opened today. The cost of the project amounted to EUR 150mn. The eight-storey building is the biggest all-purpose trade centre in the country. It will have 150 small and medium shops, six big shops, and a hypermarket. The investors also plan to build a cinema complex.

Electronic block trading is poised to become an option for the foreign exchange market. But will it have the same impact as it has had in equity markets?