Archive of articles - November 1997

Slovakia debut dollar bond on hold amid volatility

Slovakia, which has been planning a benchmark debut dollar Eurobond since July this year, decided to delay launching the bond until market conditions improved. The country was expected to launch a bond for up to $300 million with a five-year maturity via Nomura. But now, the country will not hit the road with its bond issue until market conditions improve, a syndicate manager at Nomura said."They have the flexibility to postpone the bond until 1998," he said. "It will be the sovereign dollar benchmark, so obviously they will be very keen to execute something at the right levels."Slovakia also plans to issue government bonds denominated in Slovak crowns on foreign markets. The country is rated Baa3 by Moody's Investors Service and BBB- by Standard and Poor's.

Building your career: Lessons from Hollywood

Trying to break into the business side of entertainment for two years was unlike anything I had ever encountered in my normal professional environments, consumer products and consulting. Relationships were king. Style often mattered more than substance. Still, I persevered and eventually landed an assignment writing a business plan for a children's entertainment company.Prior to my good fortune, I had met with over 100 people from the industry, and even enrolled in a university course called "How to Break into Hollywood."At the time, the lessons I learned seemed related solely to entertainment, but looking back now I see how those lessons can help to build a career in marketing, especially in emerging markets.

Budget deficit exceeds 31bn Sk at the end of October

Myth versus reality in Slovak-Hungarian relations

FIĽAKOVO- Smiling pleasantly, an old lady bent down to answer a hail from the window of a car parked in downtown Fiľakovo, a predominantly Hungarian town of 11,000 in southern Slovakia. Asked for directions to city hall, a look of consternation clouded her face. "No, no," she responded. The mayor's office? "No." Who might know? "No, no, Slovak not speak, no, sorry, no."Unable to speak Slovak, this lady lent unwitting credibility to one of the most persistent myths about Slovakia's Hungarian community, namely that its members either can't or don't want to speak the official national language. "Why are our Hungarian compatriots against learning the language of the country in which they live?" demanded Jolana Ambrúžová, Head of the Supervisory Committee of Matica Slovenská, a Slovak cultural organization founded in 1863.

Slovak stock market untouched by turmoil

Dealers at the Bratislava Stock Exchange (BSE), during the late October storm on the world's major stock-exchanges, napped through the turmoil as Slovakia's stock market stayed its course, stuck in the mud. Most market analysts said that Slovakia missed the wrath of the world storm due to the absence of foreign investors and a lack of long-term liquidity.The BSE's 16-share SAX index eased just 2.71 points at the beginning of the tumultuous week, but analysts didn't link that fall to the worldwide downturn."The Slovak capital market has been following its own track for a long time, showing little sensitivity to fluctuations on world markets," said Miron Zelina, an analyst at Invest Brokers. "I see the main reason for this in the significant lack of foreign funds on the BSE," he said, adding that this prevented the global domino-effect of withdrawal of capital from happening on the BSE.

Company Profile: Chemolak

Around Smolenice, a quaint town in the middle of the Small Carpathian mountain range, natural resources have been used to make chemicals since 1883, first for manufacturing products based on dry wood distillation, then for paints and varnishes. Industrial development over the years has caused the product mix to grow wider, with synthetic and latex coating paints replacing the original products based on natural raw materials.Today, making all this possible is Chemolak Smolenice, one of the biggest producers of painting coats in Europe. Chemolak also has one of the most sophisticated production processes in Slovakia, according to Pavol Serina, the company's financial director.Chemolak supplies around 75 percent of domestic demand, producing 700 different kinds of products in about 1,320 assortment groups. Last year, coating paints made up 62.1 percent of the company's production, while diluters accounted for 19.5 percent ,with the rest consisting of varnishes, synthetic resins and glue.

Slovaks press Hungary to build Nagymaros dam

Slovakia told Hungary on November 10 that it must complete a second dam on the Danube in Nagymaros so that Slovakia can fully exploit its own part of the controversial Gabčíkovo-Nagymaros dam project. "Without a second dam it is not possible to fulfill the original 1977 joint treaty to build the project," Slovak Agricultural Minister Peter Baco told reporters after the second round of bilateral talks on a dispute over the dam scheme.The two countries have been at loggerheads over the plan to harness the Danube with a joint hydro-electric project since Hungary ceased working on its own dam at Nagymaros in 1989. Budapest fully abandoned the project in 1992 under pressure from domestic environmental groups. Czechoslovakia, with whom Hungary had signed the original agreement in 1977, completed its part of the work at Gabčíkovo, which was taken over by Slovakia after Czechoslovakia split in 1993. The Nagymaros dam, more than 100 km (60 miles) downstream from Gabčíkovo, had been designed to cope with large fluctuations in water levels that the operation of Gabčíkovo would have caused at peak output.

Mečiar administration and the press: 1995 to present

Vladimír Mečiar's Movement for Democratic Slovakia (HZDS) regained power for the third time after winning the September 1994 general elections which saw his new cabinet inaugurated later that December . Since then, Mečiar's administration has been at odds a number of times with independent media. Here is a short look at the history of the feud.January 1995- Mečiar's administration passes 1995 budget which limits the amount of money state-run corporations and financial organizations can spend on advertising.March 1995- Ján Fekete, a deputy for Mečiar's Movement for a Democratic Slovakia (HZDS), proposes a VAT hike for the first time in the parliamentary committee for Education, Science and Culture. The proposal would have levied a 25 percent VAT on publications with 30 percent foreign ownership and hit up those with 50 percent or more foreign ownership with a 50 percent tax.

Defense of the crown

Slovak crown devaluation rumors just won't go away, no matter how much government officials and national bankers wish they would.This time, word of an impending attack on the crown came from ING Barings Securities Bratislava, which issued a statement on November 3 saying "the long-term over-valuation of the Slovak crown handicaps exporters and does not create pressure for import mitigation."Slovakia's market players, independent analysts, government officials and the National Bank of Slovakia (NBS) are united in their conviction that devaluation of the Slovak currency would not solve any of the country's economic problems. Instead, they insist, devaluation would only worsen the current account balance and make repayment of mounting foreign debt prohibitively expensive."People have been talking about devaluation of the Slovak crown for two years now," said Peter Koprna, Chief Dealer at Slovenská Sporiteľňa. "Every week we hear that it's absolutely necessary, that the situation is really awful, but I really don't see a reason for it.

Government approves budget; deficit cannot exceed 5bn Sk

Vladimír Mečiar's cabinet at a November 14 special session approved a draft version of the 1998 state budget passing it onto Parliament. However, the budget is expected to encounter serious difficulties in the chamber, since two ministers from the Slovak National Party (SNS), the smallest party in the coalition, didn't support the draft.Budget income is expected to be 179.8 billion Sk, a 5.1 percent increase over the last year, while expenditures are expected to reach 184.8 billion Sk, growing only 1.1 percent compared to 1996."The coalition agreement is that a deficit of 5 billion crowns must not be exceeded," Finance Minister Sergej Kozlík told a press conference after the draft was approved, articulating the government's fear of widening the budget deficit too much in an election year. Kozlík added that the government wants to save money by cutting ministries' capital expenditures by 35 percent and reducing operational expenditures such as purchase of goods and services.

Moody's announces that investment prospects worsen

Multifunctional building slated for Ružinov

Slowly but surely, developers are starting to cater to the needs of the huge populations living in Bratislava's communist-era housing complexes. One of the newest projects attempting to add some sorely-needed services and character is planned for the Ružinov district built during the late 60s and early 70s.The investor, Martinák s.r.o. Bratislava, plans to start construction on a multifunctional center on Ružinovská ulica next year. The 270 million Sk ($9 million) complex will combine retail, office, and residential space - all of which the investor intends to sell. Prices are projected at 20,000 Sk/m2 for residential space and higher for office and retail space.The 17,285 square-meter complex, on the site of a current parking lot beside a Benzinol gas station, will also house 114 underground parking places. Authored by architects Milan Kiaček and Pavol Komár, the center comprises three buildings and a glass passageway.

SPP eyes syndicated loan

Christmas bazaar brings spirit of giving, good time for whole family

Bridging the gap: Private universities charting new territory

Many Slovak universities, especially the newer, privately run schools like the British-model City University Bratislava (CUB) and the American-style City University Bellevue (CU), have begun to address the 'personality gap' (see lead story, page 7). Carlos Gutierrez, Associate Dean of European Programs at CU, said that in his experience, Slovak students lacked the very self-confidence and independent thinking that are essential for business success. "Students here have problems with their attitudes," he said, "and our task is to challenge these attitudes."Ján Rebro, CU's Director of Central European Operations, concurred with Gutierrez's diagnosis. "Slovaks from history tend to be shy, closed to new ideas, afraid of making decisions," he said, "but we force them into situations where they have to rely on themselves and defend their decisions."

Protesting sweeping VAT hike, newspapers blank front pages

Faced with a government proposal to jack up value-added tax (VAT) for newspapers from 6 to 23 percent, most major Slovak dailies made their front pages blank on November 11. This however didn't prevent the ruling coalition from passing the bill to a second reading in parliament a day later.The tax hike is aimed at all periodicals which devote more than 10 percent of their content to advertising, erotic or pornographic material. The Finance Ministry originally planned to tax newspapers with at least 50 percent advertising content, saying that this was compatible with European Union (EU) legislation, but the taxable limit was reduced after the proposal was discussed in the cabinet.Cabinet members refused to disclose which minister made the proposal, but some newspapers, citing anonymous sources, reported that it was Ivan Hudec, the Culture Minister. At the beginning of October, Hudec had made public statements showing his dissatisfaction with the media.

Trip up a Trnava church tower

The tower that rises above Trnava's main square could be dismissed as belonging to yet another of the town's many churches. But it is, in fact, the original City tower, built in1574 and today undergoing an expensive restoration.While the spire bearing the Immaculata - the virgin Mary - is already finished, the dome is still wreathed in scaffolding. Unusual scenes of spiritual growth are enacted as workers are elevated in a dirty construction elevator that clings to the side of the tower towards their patron, who smiles own at them in her placid, golden splendor from the spire. The City tower is just one of the many historical Trnava monuments under reconstruction at the moment. Synagogues, churches and old public buildings are all being rescued from oblivion as the city's rich past gets a modern face.

Slovak retail sales up 6 percent in September

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