Business Briefs

Unicredito acquires majority in Polnobanka
ISPAT looks to grab stake in steelmaker VSŽ
NBS predicts inflation between 6 and 8%
Central bank satisfied with interest rates
Industrial output up 8.5% year-on-year in March
Construction output continuing on downward trend
Tender for Štúrovo bridge to be announced in May

Unicredito acquires majority in Polnobanka

The supervisory board of insurance firm Slovenská poisťovňa (SP) approved at its special meeting May 11 the sale of its 51% stake in Poľnobanka to the Italian company UniCredito Italiano S.p.a.
Following a capital increase last month, Slovenská poisťovňa had boosted its stake in the medium-sized bank.
SP said that the Italian company's offer met with the criteria set for the international tender Slovenská poisťovňa announced in late 1999. The Vienna-based Bank fur Arbeit und Wirtschaft AG (BAWAG) had been seen as the likely winner of the tender.
UniCredito Italiano, together with Italian firm Finest, had previously held a 15% stake in the bank.

ISPAT looks to grab stake in steelmaker VSŽ

The Anglo-American firm ISPAT May 15 tabled a bid for a majority stake in steel giant VSŽ, according to Košice entrepreneur Axam Barakat, who claimed to be mediating a contract between the firm and VSŽ shareholders.
Barakat said that former VSŽ President Alexander Rezeš had agreed to sell his stake in VSŽ, and that ISPAT had been in talks with the Hutník trade union organisation that holds 10% of VSŽ shares.
The move comes ahead of a May 25 shareholders meeting where VSŽ management is hoping to gain backing for the entry of US Steel into VSŽ as a strategic investor.

NBS predicts inflation between 6 and 8%

Vice-Governor of the National Bank of Slovakia (NBS) Elena Kohútiková said May 12 that inflation in Slovakia would soon peak and then decrease gradually until the end of this year.
She said that annual inflation should be between 6 and 8% next year, and fall to 4% in 2003. "Regulated prices should grow further next year," Kohútiková said.
The NBS official added that year-end inflation should stand at around around 10%. "In the second half of 2000, core inflation should also start decreasing and these two figures should converge," she said.
The consumer price index increased by 0.4% in March compared with February. Consumer prices grew 16.6% in March 2000 compared with the same period of the previous year.

Central bank satisfied with interest rates

The National Bank of Slovakia (NBS) is satisfied with the current level of interest rates on the inter-bank market, NBS Vice-Governor Elena Kohutíková said May 12. However, she added, developments on the money market do not sufficiently reflect developments in client interest rates.
Although interest rates on short-term time deposits have dwindled, interest rates on loans still follow the microeconomic situation in the banking and corporate sector rather than signals from the money market.
Kohutíková expects banks gradually to begin deriving interest rates on loans for the corporate sector from the money market situation.
"After last year's instability on the money market and the change of the central bank's monetary policy as of February 1, 2000, when it introduced one-day refinancing and sterilization repo rates, interest rates have stabilised," said Kohútiková.

Industrial output up 8.5% year-on-year in March

Preliminary figures indicate that in March, Slovakia's industrial output grew 8.5% from March 1999. This development was chiefly influenced by 9% growth in the manufacturing sector and a 6.9% increase in the production and distribution of electricity, gas and water.
Output of mining raw materials increased 4.7% year-on-year, according to figures released by the Slovak Statistics Office May 12.
In the manufacturing industry, production wood processing and manufacturing of wood products saw the highest growth compared with the same period of the previous year (40.9%), followed by manufacturing of products from plastics and rubber (29.4%), transport facilities (28.8%), production of electrical and optical appliances (22.3%) and the production of coke, refined oil products and nuclear fuels (21.3%).

Construction output continuing on downward trend

The downward trend in construction output in Slovakia continued in March 2000, when output dropped 16.1% year-on-year to 4.5 billion crowns.
The Slovak Statistics Office reported a 9.3% drop in new construction, modernisation and renovation and a 25% fall in repairs and maintenance. Taking into account seasonal influences, construction output in March was 1.3% lower than in the preceding month.

Tender for Štúrovo bridge to be announced in May

The international tender for the construction of a bridge over the Danube River linking the Slovak town of Štúrovo with the Hungarian town of Esztergom might be announced by the end of May, said Peter Barek, head of the Slovak-Hungarian Inter-Governmental Commission for Infrastructure, on May 12.
Barek added that the contract with the winner of the tender could be approved by the end of July, allowing construction itself to start in September.
Since the conclusion of an audit of the project in late April, both Slovakia and Hungary have been waiting for definitive approval from the European Commission to finance part of the construction costs.
Slovak Prime Minister Mikuláš Dzurinda and his Hungarian counterpart, Viktor Orban, in Septemb\er 1999 signed an agreement on the construction of the bridge. The project will cost 850 million crowns (19 million euros), and the bridge should be put into operation at the beginning of 2002.

Compiled by Ed Holt
from SITA

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