7days, 2005. április 18

7/28/2019 7Days, 2005. április 18.

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1051 Budapest, Hercegprímás utca 19 Tel: 354 3290 Fax: 354 0130 Mail: [email protected]

12 April 2005Business Mol and INA make bid for Energopetrol

Mol shares’ face value may dropBM Rt supplies Suzuki in JapanK and H Bank after-tax profit Ft 25.1 blnOTP Real Estate Fund builds in Óbuda

Balda to expand facilities in HungaryColoplast expands capacity at local unitFinMin mulls EU funding for M6SalgoGlass in liquidationDate set for Antenna tender Malév and Lufthansa largest airlines in HungarySzentkiralyi market share swells to 10%Tiszavas exports near and far Austro-Hungarian integrationGraphisoft plans to move to HungarySynergon to offer services for municipalities

Reggel editor resignsEconomics Apeh still to process Ft 108 billion of VAT refunds

Proposal for phony entrepreneurs to bide timeForeign guest nights up in Jan/FebFund capital rises

Politics Draskovics sack rumor deniedDomestic Former financial advisor to Fidesz arrested for fraudStockwatch BUX Close: 17,169.59 Change: -288.57 (-1.65%)Exchange Fixed Middle RateWeather Tomorrow: showers

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7/28/2019 7Days, 2005. április 18.



13 April 2005Business Citibank posts net profit of Ft 13 billion

BorsodChem to pay Ft 45/share dividendNABI bus sales fall 20%OTP to pay 40% of profits as dividendTesco sales in Hungary up 17% in 2004

Schneider Paper projects 10% sales riseSPSS starts exclusive distributorshipDélhús makes changes at Pick SzegedBalaton to get new harborsHenkell acquires WaltonFreeSoft AGMMÁV blocks private co from sidetracksTVK ploughs back profit Agrimill-Agrimpex shares purchaseBourse AGM postponedInternet subscriptions up 17% in 2004

Ananász distributed for free2/3s of requests to build wind turbines turned down

Economics March consumer prices rise 0.7% in monthKopint lowers 2005 GDP growth projection to 3.6%

Politics Justice Minister makes post-Széchény proposalsDomestic Shorter sentences for schoolchildren

Web Jewish database is legal worry - ombudsmanMatthias Church gets Ft 3.7 bln revamp

Stockwatch BUX Close: 17,420.47 Change: +250.88 (+1.46%)Exchange Fixed Middle RateWeather Tomorrow: showers

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14 April 2005Business Arago sells stake in Pick

MOL says ready to boost stake in INAHerz bought by Jámbor Rába to pay no dividendMFB merges programs/expands loans

TVK board proposes profit retentionChemimontazh inks contract with ParsonsFreeSoft to pay no dividendBA to launch four flights to BudapestErste -unconsolidated profit, Ft 5 blnOTP's ambitious road to '09Eurotours assets for saleHVB Bank to open 20 new branches this year Successful '04 for Ringier Online market to widenE.ON Édász to pay Ft 6.638 bln dividend

GVH may turn to constitutional court re taxisNew private railway ready to rollFHB to propose stock split

Economics Gov't allocate funds for local councils Platinum credit card arriving in MayIMF still sees 3.7% growth'05/'06 crime prevention policy approved

Politics SzDSz approves two MSzP candidates for president MSzP catch up on Fidesz in opinion poll

Domestic Guards dispatched to exam paper siteStockwatch BUX Close: 17480.48 Change: +60.01 (+0.34%)Exchange Fixed Middle RateWeather Tomorrow: cloudy

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15 April 2005Business CBA tops supermarket revenue list in 04

NFA makes proposal to banksMÁV to reexamine rolling stock tendersBombardier-MÁV open Ft 92 mln facilityHagebau eyes Hungarian market

UPC Direct targets 170,000 subscribersLinamar to pay no dividendDebrecen to start up Munich flightEagle expanding in SzolnokPM in price talks with electricity suppliersBorsod County steel war Corvinus to present new ultralightGrECo targets 40% revenue rise in 05Merkantil to pay Ft 1.4 bln dividendGazette details Young and Rubicam bid

Economics Offshore co’s threaten to leave due to tax

Q1 new vehicle sales down 7.4% yr/yr Real Estate prices rise below inflationBanks pay Ft 36 bln to car dealersEEA and Norway to provide Euro 135 mln

Politics Slovak PM refused to meet GyurcsányPM ready to go before committee

Domestic Culture Min seeks international cooperationStockwatch BUX Close: 17372.57 Change: -107.91 ( -0.62%)Exchange Fixed Middle RateWeather Tomorrow: cloudy

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18 April 2005Business CBA opens Ft 4.5 billion logistics base

Csiki-Bege car plaza opens in Bp Dist 3Masped to bid for Bulgarian companyPannonplast restructures only in Q2Synergon signs agreement with Huawei

INA-MOL bids for Engergopetrol stakeMÁV, Deutsche Bahn, may bid for Slovakian rail unitTwo Bp hotels found bypassing water metersHungo-Russian nanotech. base to start in autumnNabi proposes capital reduction; shares declineState-owned co invests in SMEsGovt. talks with haulage companies over diesel priceCentral bank worried in spite of high profitabilityLocal bureaucracy delays EU fundingGLB Invest to build residential parks in HerendF-L has new product for co-ops

Economics 10,000 illegal workers discovered in Q1 Industrial output up 1.3% yr/yr in FebruaryMalév to get six serious bidsMNB reports 40% drop in forint forgery in Q1 of 2005

Politics Fidesz chair argues Mádl should be re-electedDomestic Judiciary's code of ethics ready

FinMin investigates Gambling SupervisionStockwatch BUX Close: 17,128.47 Change: -244.10 (-1.41%)Exchange Fixed Middle RateWeather Tomorrow: rain

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12 April 2005BusinessMOL and INA make bid for EnergopetrolMOL Rt, jointly with Croatian state oil firm INA, submitted a binding bid to buy a controlling stake in Bosnia’slargest fuel retailer Energopetrol on April 11, MOL said yesterday. MOL owns 25% of INA, and the two companieshold an equal share in the bidding consortium. Energopetrol is 67% owned by the Bosnian government, whichsaid it would decide later how much it would sell to a strategic investor. Energopetrol runs a network of 65 servicestations and holds 15% of the Bosnian market. Energopetrol sold 124,000 tons of fuel and had sales revenue of Euro 84m in 2003. MOL said that an eventual acquisition of Energopetrol fits in well in both MOL’s and INA’sstrategic plans to expand further on the south-eastern European markets. (Econews)

Mol shares’ face value may dropHungarian oil flagship MOL Rt will propose at its upcoming AGM on Apr. 27 to split its shares bearing a face valueof Ft 1,000 into four, with nominal values of Ft 250, the company said in a statement yesterday. Since their issueat the Budapest Stock Exchange in 1995, MOL shares have gone up in value from their original Ft 1,100 to over Ft 15,000, and their current trading price is significantly higher compared to their EU peers, which warrants thesplit, the company said. MOL also said it would propose to shareholders to pay out Ft 16.998 billion or 8% of its2004 earnings in dividends, equaling Ft 160 a share. This is three times higher than the Ft 55 paid in recent years.MOL shares closed at Ft 16,195 on Monday, down 2.2%. (NG 1) S.F.

BM Rt supplies Suzuki in Japan

In addition to Magyar Suzuki Rt, Veszprém-based car parts maker Bakony Works (BM) Rt is now also makingcomponents to the automaker’s Japanese parent, the company said. Thanks to its Suzuki and Electolux contractsas well as a Ft 3.5 billion investment project launched last year, BM is looking to boost its revenues this from Ft6.9 billion in 2004 to nearly Ft 10 billion. The company, which employs a total workforce of 860, has recentlycompleted two new plants in Veszprém, one to supply car body components to automotive companies includingBMW, Mercedes and Volkswagen, while another manufactures parts for the Swedish Electrolux. (NG 1) S.F.

K and H Bank after-tax profit Ft 25.1 blnK and H Bank Rt announced yesterday it had consolidated after-tax profit of Ft 25.1 billion in 2004, nearly tentimes as much as in 2003, and Ft 5.84 billion more than its IFRS consolidated after-tax profit of Ft 19.3 billion in2004. The figures were published in the bank’s AGM invitation, which however did not contain a dividendproposal. K and H Bank had unconsolidated after-tax profit of Ft 22.2 billion in 2004, nearly eight times as muchas in 2003. (Econews)

OTP Real Estate Fund builds in ÓbudaReal estate developer OTP Real Estate Investment Fund will build offices and warehouse space on the AquincumLogistics Park site, which it recently acquired, Adorján Salamon, chairman-CEO of ESTON International, the realestate agency that handled the purchase, said yesterday. The development project in Óbuda will cost Euro 5million, Salamon said. A total 5,000 sqm of warehouse space and 2,000 sqm of office space will be built on the13,000 sqm site. Obuda, on the capital’s north side, is a favorite location for companies in Budapest, and becausedemand is stable and there are few sites left to be developed, there will be healthy demand for the offices andwarehouse space, scheduled to be completed by August 2005, Salamon said. (Econews)

Balda to expand facilities in HungaryGerman mobile phone components maker Balda AG announced yesterday that it will expand its production facilityin Hungary as well as build a new U.S.D 6.5 million factory in China. Balda said it would move part of its capacityto Hungary this year because of the potential for bigger profits and of lower taxes. Balda opened its Euro 2 million

factory in Veszprém (north-western Hungary) last year. Balda will employ 800 people at the factory when itreaches full capacity. (Econews; Nb 13)

Coloplast expands capacity at local unitDanish medical supplies maker Coloplast is planning to step up production at its Chinese and Hungarian units,business daily Világgazdaság reported yesterday. Coloplast, which makes bandages, continence care productsand ostomy care products, is introducing a new product range, which will require a capacity expansion. In theinitial phase, the new products will be made in Denmark, but production will be relocated to Coloplast’s factory inTatabánya (north-western Hungary) and its Chinese facilities later on, Világgazdaság reported, quoting Coloplastinvestor relations manager Jens Steen Larsen. By 2011, a third of Coloplast’s production will be from China.Coloplast moved to Tatabánya in 2000, leasing a factory until 2002, when it completed its own 10,000 sqm facility.(Econews; Vg Mon. 11)

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FinMin mulls EU funding for M6The new concession tender to further develop highway M6 is to be published in July. The 197-km long stretchranging from Dunaújváros to the country border is estimated to cost Euro 1.5 to 2 billion. The Finance Ministry isexamining whether EU funding is feasible. If the inclusion of the EU cohesion funds is possible, the constructor would not have to take out such a large loan from commercial banks and thus the government’s commitmentcommission fee would decrease, wrote daily Világgazdaság. The first stretch of M6 - the Érd-Dunaújváros stretch- is to be handed over to traffic on March 31, 2006. (Vg Mon 4) E.C.

SalgoGlass in liquidationWhile still under operation, the liquidation of the Salgotarján Glass Rt has commenced, explained liquidatingcompany Reorg Rt spokesman György Szondi. It has started transferring payments to workers using the wageguarantee fund, but it needs to create own resources to ensure payments to workers in the future, warned Szondi. As the liquidation proceeds, they are trying to assess whether is possible to carry on with the operation. Thecompany has had continued liquidity problems ever since last April. To curb this, owners increased the company’scapital by Ft 600 million in May. Also in May 2004, SalgoGlass received a government subsidy of Ft 76.1 millionfor job conservation - apparently with little success. (NG 5) E.C.

Date set for Antenna tender The State Privatization and Holding Company (ÁPV) Rt has announced that preliminary bids for a 75%-plus-one-vote stake in terrestrial broadcaster Antenna Hungária Rt must be in on May 11, and final bids must be made byJuly 15. ÁPV said it would sell shares worth a total nominal Ft 8.75 billion or 73.7130% of all shares, and will acton behalf of minority owner Forrás Rt, selling its 1.2871% stake in Antenna Hungaria, worth a nominal Ft 152.84million. The two stakes together amount to 75.0001% of Antenna. Any buyer will have to retain staff numbers atthe company. ÁPV said it was aiming to maximize revenue from the deal. (Econews; NG 11, Vg Mon. 13)

Malév and Lufthansa largest airlines in HungaryLatest statistics, issued yesterday, show that Malév Rt transported the highest number of passengers in Hungarylast year, followed by Lufthansa. Malév transported 2,816,345 passengers on 46,795 scheduled flights in Hungarylast year and second-place Lufthansa handled 571,406 passengers on 9,331 flights, the Central Statistics Office(KSH) reported. Third place went to no-frills airline Sky Europe with 253,165 passengers on 4,292 flights, followedby British Airways with 229,582 passengers on 1,894 flights. Three discount airlines followed: EasyJet Ltd.,Wizzair and GermanWings. Air France was only at eighth place. In related news, Malév denied a report that thecompany may end flights to North America. (MTI)

Szentkiralyi market share swells to 10% According to an ACNielsen survey made in February 2005. the family-owned Szentkirályi Mineral Water Rt hasthe best selling still mineral water in Hungarian market, said the company in a statement. The company has16.5% market share of still mineral water sales. To meet all the demands the company will install a new bottlingline on May 15, which doubles its capacity to 800,000 liters a day. Szentkirályi sold more water in March 2005than in August 2004, the most important month in water consumption, said Levente Balogh, company CEO.Szentkirályi had 0.3% market share in volume terms in 2003, 8.6% in 2004, rising to over 10% in Q1 2005. (BBJOnline; NG 3, MH 23)

Tiszavas exports near and far Miskolc-based Tiszavas Vehicle Repair Kft, a subsidiary of state railroad operator MÁV Rt, has won a contractfrom the Austrian national railways for 100 flat bed container freight cars and an option for another 100, daily NapiGazdaság said quoting company sources. Apart from the Austrian deal, Tiszavas will be supplying freight cars toIran this year, while it is also hoping to land a contract in Cuba. Tiszavas, which splits its revenues between freightcar manufacturing and repair, last year registered net profit of Ft 72.8 million on revenues on Ft 4.75 billion. The

company is expected to make a net profit of Ft 30 million in 2005. (NG 5) S.F.Austro-Hungarian integrationMore than 30 cross-border projects can be launched this year in the Hungarian-Austrian border region. Accordingto daily Népszava information the contracts were signed yesterday by the Phare committee and the projectleaders. The investments will be funded in the framework of programs aiming to improve cross-border transportand tourism. Euro 8 million was distributed for the transport, while Euro 4 million for tourism. Both programs areexpected to enhance competitiveness and integration in the region. (Nv 5; Nv 5, MH 23) K.H.

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Graphisoft plans to move to Hungary According to a press release Graphisoft NV holds an annual general meeting on May 10, in Amsterdam. Theboard will suggest to change type of the company to European Rt. The centre and control of Graphisoft NV wasalways in Hungary. With the company type change Amsterdam-based Graphisoft would move to Hungary, itspresence in The Netherlands is no more necessary where the company never made business activity. Due totranslocation the company estimates to save EUR 150,000-200,000 in administration and legal processes. (BBJOnline; NG 11, Vg Mon. 14)

Synergon to offer services for municipalitiesSynergon IT Rt and GKI Economic Research Institute have signed a memorandum of cooperation to provideconsultancy services to local authorities, Synergon said yesterday. Synergon will offer professional support to GKIin the preparation of studies and IT-related analyses for local authorities and regions. The contract extends to ITresearch areas: GKI will prepare a quarterly survey of a minimum of 1,000 businesses employing at least 5people, covering the entire business sector. GKI will also prepare an annual survey on the technology used bylocal authorities. According to the statement, the surveys will offer Synergon an up-to-date image of the marketand the IT infrastructure of local authorities. The results will allow Synergon to offer cost-efficient solutions to localauthorities. (Econews)

Reggel editor resignsZsolt Pauska, chief editor of Reggel newspaper has resigned due to the low circulation of the publication: Of thetotal 50 000 issues, 30 000 are promotional copies. The aim of the newspaper was to create a middle coursebetween the tabloids and the political papers. The new director will be Mihály Soltész, development director of Axel Springer Hungary Kft. According to Népszabadság information the publisher has decided to move moretowards the yellow press. (Nb 9)

EconomicsApeh still to process Ft 108 billion of VAT refundsTax office Apeh has refunded Ft 222 billion in VAT collected for Q4 2004, APEH deputy-chairman István Juhászsaid. Apeh is still evaluating Ft 80 billion in VAT refund claims paid in Q4, but will complete the tax proceedings for 2004 within weeks, he added. In recent days Apeh accelerated Q4 2004 VAT refunds, Juhász said, adding thattaxpayers made claims for a total Ft 300 billion VAT paid on their Q4 2004 transactions. There is still Ft 24 billionin VAT to be refunded for Q3 2004, which comes from having had to wait for data provision from EU partners for amounts in excess of Ft 40 billion, Juhász said. Apeh did not impose fines on companies making errors throughfailing to understand EU regulation, but did fine those companies making fraudulent VAT claims, Juhász said.(Econews; NG 3, Nv 5)

Proposal for phony entrepreneurs to bide timeSocial Democrat MP Iván Petö put forward a proposal on prolonging the amnesty period during which companiescan go on employing forced entrepreneurs. If his proposal is rejected, tax authority APEH will be authorized toenforce the law from July 31 on, following the June 30 deadline for employers to sign real contracts with their employees. If it is accepted, they will have to do so only a year later. An immediate law enforcement would playhavoc with the companies concerned and result in workers losing their jobs, Petö told daily Népszava. (Nv 4, MH23) K.H.

Foreign guest nights up in Jan/Feb A total of 606,000 guests spent 1.531 million nights in Hungary in January-February this year, the CentralStatistics Office (KSH) reported yesterday. The number of guests rose 12% and while guest nights rose 8.4%from a year earlier. Some 275,000 foreign tourists spent 786,000 guest nights in Hungary in January-February, up21.6% and 16.7%, respectively, from a year earlier. The number of guest nights at hotels rose 8.8% yr/yr in

February to 637,000, and 11.1% in January-February to 1.267 million. (Econews; NG 4, Nb 1, 19)Fund capital risesThe total assets of funds reached Ft 1362 billion by the end of Q1 - an 8.1% increase compared to last year.Some 92% of the Ft 102 billion increase is as a result of new investments, and the rest is the yield realized,according to the newsletter of the Hungarian Association of Investment Funds and Asset Managers (Bamosz).Bond funds have increased by 7.7%, real-estate funds are up by 11.5% (Ft 14 billion), and even the lowest riskfunds increased above average, by 10.6%. Mixed funds showed the highest increase, at 27%. The capital of stockfunds is down by 8%, which is attributed to the 7% decrease of the BUX. (NG 1) E.C.

PoliticsDraskovics sack rumor deniedIn an interview given to daily Magyar Hírlap former CIB Bank CEO Ádám Farkas denied being asked by PMFerenc Gyurcsány to replace Finance Minister Tibor Draskovics, and neither does he expect any offer of this kind.The weekend rumor had already been denied by government spokesman András Batiz as well. Rumors wereencouraged by his good relation with former National Bank President György Surányi. According to Magyar Hirlap, Tibor Draskovics is one of the few people satisfied with the tax reform plan. (MH 21) K.H.

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DomesticFormer financial advisor to Fidesz arrested for fraudTamás Varga, a prime suspect in defrauding the government of millions of euros was detained in Amsterdam, theNational Investigation Bureau confirmed yesterday. The official statement follows yesterday’s press reports thatthe former financial advisor to the opposition Fidesz party, who has been a fugitive for the past six years, wasapprehended by police. With international warrants out for his arrest, Varga was detained by Dutch police on April5, in a flat he rented in Amsterdam, the statement said. Varga had established a network of companies which

billed one another for phony real estate projects, and then submitted the invoices to claim the VAT, claiming aboutFt 2 billion, Világgazdaság wrote in October 2000. (MTI; Nv 1, 11, MH 4)

StocksBUX Close: 17,169.59 Change: -288.57 (-1.65%)Stock Closing price Daily change (%) Average price VolumeMOL 16,195 -2.2 16,215 393,139Matáv 859 -0.3 859 952,295OTP 6,430 -2.9 6,477 694,212Richter 26,400 0.2 26,314 33,101Egis 16,995 -2.0 16,984 3,847 Antenna 4,545 0.1 4,502 5,431TVK 5,195 0.4 5,166 3,736

Rába 735 0.0 728 5,109Budapest Stock Exchange

Exchange RatesFIXED MIDDLE RATE In forints Apr 11, 2005 National Bank of HungaryEUR 1 246.00USD 1 189.73GBP 1 358.76CHF 1 158.88JPY 100 175.86CZK 1 8.22

PLN 1 60.04Weather Tomorrow: showersHigh 18°C (64°F)Low 8°C (46°F)

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13 April 2005BusinessCitibank posts net profit of Ft 13 billionCitibank Rt had after-tax profit of Ft 12.8 billion in 2004, 13% more than in 2003, the bank announced yesterday.The bank’s board has still not decided whether or not to pay a dividend. No dividend was paid on 2003’s profit.Citibank’s pre-tax profit came to Ft 15.29 billion in 2004, up from Ft 13.79 billion in 2003. Total assets increased12% to Ft 406.45 billion by the end of last year. Citibank’s stock of deposits increased 6% to Ft 258.77 billion, andits stock of loans decreased 8% to Ft 152 billion. Citibank’s stock of retail deposits grew a quarter to Ft 132.39billion. Corporate deposits decreased to Ft 126.38 billion. Citibank’s stock of corporate loans fell a quarter to Ft 82billion. Citibank’s return on equity was 26.01% in 2004 compared to 30.47% a year before. The bank’s return onassets remained the same, at 3.33%. (Econews; MH 11; NG 5)

BorsodChem to pay Ft 45/share dividendThe management of BorsodChem Rt will propose an effective Ft 45-per-share dividend at its April 29 AGM,according to the AGM invitation published on the website of the Budapest Stock Exchange yesterday. Theproposal is actually for a Ft 44.3/share dividend, but BorsodChem distributes to other shareholders, in equal part,dividends paid on its treasury shares. BorsodChem had unconsolidated net profit of Ft 13.477 billion in 2004, upfrom Ft 3.43 billion in 2003, according to Hungarian Accounting Standards. BorsodChem’s net assets rose to Ft113.294 billion by the end of 2004. (Econews; NG 11)

NABI bus sales fall 20%

Bus industry company NABI Rt sold 227 buses in Q1, 20% down from the same period last year. Sales are fallingoff in the US because the American purchasers are having continued financial difficulties. At the same time theBritish bus market can be considered buoyant and shows a growing tendency, with NABI selling some 40 busesmore in Q1 2005 than in Q1 last year. (NG 12) K.H.

OTP to pay 40% of profits as dividendThe board of OTP Bank Rt will propose payment of a Ft 41.206 billion dividend from 2004’s after-tax profit of Ft104.818 billion, the bank announced yesterday. The dividend is equivalent to 146% of the nominal value of thebank’s shares. Last year OTP Bank paid out a dividend of Ft 16.8 billion from 2003’s after-tax profit of Ft 71.562billion. The dividend was equivalent to 60% of the nominal value of shares. OTP Bank’s unconsolidated after-taxprofit rose 46.5% in 2004, according to Hungarian Accounting Standards. Total assets rose 10.4% to 3,044.772billion by the end of 2004. (Econews; NG 11)

Tesco sales in Hungary up 17% in 2004

UK hypermarket chain Tesco recorded gross sales revenue of Ft 415 billion in Hungary last year, 17% more thanin 2003, Paul Kennedy, the CEO of Tesco-Global Rt, announced yesterday. Sales at Tesco rose well over thecompany’s total foreign sales, which were up 13.1% on 2003. Tesco opened ten new stores in Hungary last year,including four smaller units, and also operates filling stations next to 12 of its stores. Tesco raised the number of its house brands it offers at its stores in Hungary by 500 to 1,700 last year. (Econews; Nv 5, NG 5)

Schneider Paper projects 10% sales riseSchneider Paper Hungary, the Hungarian unit of Germany’s Schneidersohne, a paper maker, expects sales torise 10% in 2005 to Ft 4 billion, managing director Marcell Matus announced yesterday. Last year the company’ssales also rose 10% to Ft 3.6 billion. Schneider Papir is the fifth-biggest paper company in Hungary, with a 12%market share. By the end of 2006, the company aims to become the third-biggest paper company in Hungary.Schneider Papir, which was set up in 1998, employs 44 people. The company produces copy machine paper,design paper and cardboard. (Econews)

SPSS starts exclusive distributorshipSPSS, a leading U.S. maker of analytical software for businesses and schools, has opened an exclusivedistributorship in Hungary, the company announced yesterday. Four private investors set up the company, calledSPSS Hungary, in August 2004 to bid for right to be the only seller of SPSS products in Hungary. The companybeat three other companies - all former SPSS vendors - in the running. SPSS products have been available inHungary for 14 years. SPSS Hungary expects revenue of Ft 94.5 million in the next year-and-a-half. SPSS’sclients in Hungary include OTP Bank Rt, wireless services company T-Mobil Rt and several schools. (Econews)

Délhús makes changes at Pick Szeged A Monday AGM of Pick Szeged Rt, Hungary’s most famous salami maker, approved appointments to the boardwhich reflect Pick’s takeover by peer Délhús Rt, press reports said yesterday. In March, Délhús, which is ownedby Sándor Csányi, the head of Hungary’s biggest commercial bank, OTP Bank Rt, acquired 32.16% of the votingrights in Pick from Arago Rt, a holding company owned by Hungarian investors. Pick Szeged had consolidated

net losses of Ft 5.08 billion in 2004, according to Hungarian Accounting Standards. In 2003, the company had netlosses of Ft 364 million. Consolidated sales increased 8% in 2004 to Ft 50.04 billion. (Econews; Vg Tues 11, Nb12)

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Balaton to get new harborsBalaton Shipping (BH) Rt is to spend over Ft 500 million for harbor development in Balatonszemes, harbor department head Márta Cziráki told daily Világgazdaság. The first stage of the 2-year-long project will becompleted by the end of May, and the final one in 2006, creating the 2nd biggest harbor along the shore of LakeBalaton. BH Rt also plans further harbor developments, in Balatonboglár, Alsóors and Siófok, with investmentsbetween Ft 250 million and Ft 1.5 billion. Developments are encouraged by the growing demands for sailing sportfacilities in the eastern basin of Lake Balaton. The company will cover the costs by selling some of its propertiesand taking out loans. (Tuesday Vg 11) K.H.

Henkell acquires WaltonFollowing a buyout of the Törley and BB brands, Henkell and Söhnlein, the German wine and sparkling winemanufacturer, has added Walton, the only remaining Hungarian sparking wine make, to its portfolio, along withfour other smaller brands, daily Magyar Hírlap reported. Ferenc Szabó, Walton Rt’s chief operating officer said thetakeover deal was already signed in February, but declined to comment on the price. The sale, still pending acompetition office approval, is expected to boost Henkell and Schönlein Hungária Rt’s market share from 60% to66%. The Hungarian subsidiary rang up sales of Ft 14 billion and employed 380 last year. (MH 1) S.F.

FreeSoft AGMIT company FreeSoft Rt, publicly traded since last summer, had its AGM yesterday. The annual report of thecompany was adopted, and the Board of Directors introduced the company’s strategy and this year’s plans.Freesoft will continue acquisitions, although with a slower pace, CEO János Keresztesi said. In the past four months three firms have been bought. Future acquisitions are planned to be financed not by cash but by share

exchange. The company’s turnover is expected to be around Ft 2.1 billion. (NG 11) G.R.MÁV blocks private co from sidetracksHungarian State Railways Rt (MÁV) is in conflict with private railway company Floyd Kft, which has a container train traveling from the state border to the BILK transfer station in Soroksár (south-east of Budapest), but isprevented by MÁV from reaching its target. Floyd has a contract with MÁV on using the public railroads, generalmanager András Bogdán said. However, the sidetracks, which are owned by the state railway company, do notbelong to public railroads according to the regulations and this way MÁV is free to specify a price for using them. According to EU directives this problem should have been handled in the railway law, but Floyd has turned to theCompetition Office. (NG 1) G.R.

TVK ploughs back profitThe Board of Directors of TVK Rt suggested to the company’s AGM that no dividend should be paid. TVK hadafter-tax profit of Ft 10.634 billion according to Hungarian standards and Ft 9 billion according to IFRS last year.

The reason for the decision is that the company’s strategic project requires extra funds, said Gábor Pálffy, head of communications. The plants built within the strategic project are still in their test period. (NG 11) G.R.

Agrimill-Agrimpex shares purchaseThe State Financial Institutions Supervision (PSzÁF) has approved the public purchase offer of Agrimill-Agrimpexshares. The majority owner, Investor Holding Rt, is offering Ft 2,649 for each share, equivalent to the company’sequity per share value. Small investors can offer their shares up to May 13. Investor Holding has a 65.1% sharebut has an option to purchase a further 26.17%, which will be available one month after the end of the public bid.This way Investor Rt will have over 90% share, but it wants to keep the company at the BÉT, Investor HoldingCEO Ferenc Polgár said. (NG 11) G.R.

Bourse AGM postponedBudapest Stock Exchange has postponed its AGM from originally planned Apr 26 to the beginning of May,chairman Attila Szalay-Berzeviczy said. The new owners of the bourse could not agree on all the topics for the

AGM. The schedule would include the adoption of the balance sheet, dividend proposal and the decision onbecoming a public company. (NG 11) G.R.

Internet subscriptions up 17% in 2004Internet subscriptions were up by 17% in 2004 compared to the previous year, research published yesterdayshowed. This year, the take-up rate is expected to slow down slightly. There were a total of 740,000 internetsubscriptions in 2004, market research firm TNS Hungary found. This is likely to rise by 10 to 15% this year.Broadband connections soared 76% to 136,000 last year. Broadband is expected to be used by 350,000 to400,000 subscribers by the end of this year. Broadband internet, whose connections are faster than dial-up andoffer a permanent connection while allowing users to make phone calls at the same time, is spreading faster throughout the country than internet connections in general. (MTI; NG 4, Nv 5, MH 13)

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Ananász distributed for freePublisher of free newspaper Metró is kicking off its first glossy magazine on 25 April, announced Péter Hivatal,CEO for owner company MTG Metro Gratis Kft. Gábor Izbéki, who is the editor-in-chief of both Metró and Ananász added that the magazine will have a layout totally different from Metró but a character similar. It will bedistributed free of charge at major above-ground transportation hubs in Budapest. The print run of the first issue is200,000, but the publisher wants to keep the number of copies over 100,000. The target audience is city dwellersbetween 25-45, both women and men. (NG 9) K.H.

2/3s of requests to build wind turbines turned downHungary environmental authorities have approved just a third of the 600 requests by investors who want to buildwind-powered electricity-generating turbines in Hungary. András Gombos, state secretary at the Environment andWater Ministry, said yesterday that the ministry had approved 200 sites for the possible construction of windturbines, taking into account ecological factors, such as bird migration patterns and noise pollution, as well asaesthetical factors. Gombos noted that if the ministry granted all of the requests, the wind turbines would generate700 MW of electricity. However, Hungary’s electricity network can only allow 100-300MW of its capacity to beused for wind-generated power. (Econews; NG 4)

EconomicsMarch consumer prices rise 0.7% in monthConsumer prices rose 0.7 % in March, more than expected by economists, as fuel and electricity costs surged.The annual inflation rate was 3.5 %, up from 3.2 % in April, which was the lowest since June 1981, the Central

Statistics Office said today. Both the monthly and the annual rates were higher than the median forecasts of 12economists for a 0.5 % monthly rise and a 3.3% annual increase. (Bloomberg; NG 1, MH 3, Nv 5)

Kopint lowers 2005 GDP growth projection to 3.6%Kopint-Datorg Rt, an economic research company, has lowered its GDP growth forecast for 2005 from 3.9%,published in a report in December, to 3.6%, deputy CEO Éva Palócz announced yesterday. Palócz said theforecast was lowered because of global economic trends and a slowdown in investments in Hungary. She addedthat exports would probably not increase faster than imports this year, as they did last year. Kopint-Datorgprojects exports and imports will both increase 8.7% in 2005. Kopint-Datorg also lowered its forecast for annualaverage inflation from 4.4% to 3.5%. (Econews; MH 3, NG 4, Nv 5, Nb 12)

PoliticsJustice Minister makes post-Széchény proposals At a record speed did Justice Minister József Petrétei announced his proposals on amending the penal procedure

law and the Penal Code at record speed after being asked to do so by PM Ferenc Gyurcsány on Mondayfollowing the tragedy in Széchény. This makes it possibly the most immediate response ever made by thegovernment to a crime. In Hungary only ‘proportional and constitutional’ measures can be introduced, unlike in theUS where the public outrage caused by such cases has given rise to a register of dangerous sexual criminals.The three main points of the proposal are the obligatory trial procedure before conviction, obligatory patrons andpsychiatric examination when criminals having committed violent sexual crimes are on probation. (MH 4,5) K.H.

DomesticShorter sentences for schoolchildrenSchool textbooks could become more student-friendly in future as a result of a planned regulatory amendment putforward by the Education Ministry, which seeks to make the wording of newly-published textbooks more easy-flowing and comprehensible through setting word frequency, sentence length and graphic-image size parameters. According to a recent study by the Commitment Education Institute, standard elementary school textbooks

contain as many as 30 to 40 technical terms on a single page, while sentences are often longer than 100characters, which taxes students’ reading comprehension. The Ministry is also proposing to introduce a new meritsystem for textbooks based on a variety of technical requirements. (MH 1) S.F.

Web Jewish database is legal worry - ombudsmanThe data protection ombudsman has voiced concern about an online magazine that operates a search engineclaiming to determine whether a public figure is Jewish or not. Attila Péterfalvi, interviewed by public TV yesterdaymorning, said the search engine ‘Jewish Database’ powered by matula.hu, could be in violation of Hungarianlaws. When contacted by MTI, the young people who manage the website said their information was based purelyon subjective selection criteria, citing that a Jewish person was ‘someone who we believe to be Jewish’. Heads of the Federation of Jewish Communities of Hungary (MAZSIHISz) said the site was ‘distasteful’ and run byimmature youngsters. (MTI)

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Matthias Church gets Ft 3.7 bln revampRefurbishment of Matthias Church, one of Budapest’s most popular sights, located in the Buda Castle district, isscheduled to start in the second half of the year. Funded by the Cultural Heritage Ministry with Ft 3.7 billion, theproject will see the complete external as well as internal renovation of the more than 700-year-old Catholic churchin the next two years. The Ministry will pick from among three contending investors that had submitted bids beforethe deadline last Wednesday to manage the investment. (MH 15) S.F.

Stocks

BUX Close: 17,420.47 Change: +250.88 (+1.46%)Stock Closing price Daily change (%) Average price VolumeMOL 16,345 0.9 16,361 303,918Matáv 876 2.0 871 1,810,417OTP 6,580 2.3 6,539 343,655Richter 26,475 0.3 26,330 14,349Egis 17,000 0.0 17,117 4,145 Antenna 4,500 -1.0 4,501 13,706TVK 5,200 0.1 5,176 8,473Rába 720 -2.0 722 5,987Budapest Stock Exchange

Exchange RatesFIXED MIDDLE RATE In forints Apr 12, 2005 National Bank of HungaryEUR 1 246.04USD 1 189.44GBP 1 358.27CHF 1 158.86JPY 100 175.78CZK 1 8.23PLN 1 60.21

Weather Tomorrow: showers

High 17°C (62°F)Low 12°C (53°F)

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14 April 2005Business

Arago sells stake in Pick

Arago Rt, a holding company held by Hungarian investors, has sold its 63.7% stake in Hungary's most famoussalami maker Pick Szeged Rt, the company said yesterday. Arago sold the stake on Monday to two Hungarianprivate investors -- József Brazsák and János Csarodai -- who each bought a 31.88% stake in Pick. Brazsák and

Csarodai are expected to sell their stake later to Sándor Csányi, the head of Hungary's biggest retail bank OTPRt, who acquired a third of Pick through his meat company Délhús Rt in March. Although unnamed sourcesspeaking to the daily Népszabadság denied that the new buyers were middlemen acting on Csányi's behalf, theyare still seen as financial investors prepared to part with their holding at a profit. (Econews; NG 1,5, Nb 13)

MOL says ready to boost stake in INA

MOL Rt is keen to boost its stake in oil group INA which Croatia plans to privatize further this year, a MOLrepresentative said yesterday, adding it preferred direct talks with the Zagreb government on the sale. MOLrepresentative László Geszti, now INA's financial chief, told reporters MOL was pleased with the first year and ahalf as INA's strategic partner and saw opportunities for more cooperation and joint projects. "We are interested tostay here for a long time and we are interested in a larger stake in INA. We are following what the governmentsays and we want to make a step forward," Geszti said. (Econews; NG 11)

Herz bought by Jámbor Hungarian food specialty producer Herz Rt was bought by entrepreneur János Jámbor yesterday. The company,which had a registered capital of Ft 2 billion, was probably sold for around Ft 5 billion - the seller was CashlineSecurities owner Ottó Albrecht, who himself just recently acquired the firm from Arago Rt. The new owner, whohas considerable meat industry investments in Germany, too, has long-term plans with Herz, a company bookingannual sales revenues around Ft 10 billion. (NG 5, Nb 13) M.M.

Rába to pay no dividend

The board of Rába Holding Rt, a maker of vehicles and vehicle parts, proposes that no dividend should be paidfrom the company's 2004 profits, the company announced yesterday. Rába had unconsolidated after-tax profit of Ft 832.8 million on revenue of Ft 1.516 billion last year, according to its audited profit statement preparedaccording to Hungarian Accounting Standards (HAS). Consolidated after-tax profit came to Ft 458.3 million, andconsolidated revenue was Ft 40.155 billion, according to HAS. According to IFRS, consolidated after-tax profit

was Ft 1.635 billion. (Econews; NG 11)

MFB merges programs/expands loans

The Hungarian Development Bank, MFB Rt, is merging its five enterprise development loan programs andexpanding the range of loans. The uniform program's exchange rate guarantee budget was raised by Ft 145billion, to Ft 310 billion; the new loan limit is Ft 1 billion. The new loan's interest rate will be limited to three monthsEURIBOR+4% per year; the duration will be 15 years. Application areas will also include cultural infrastructure,innovation, environmental protection and PPP-financing. (Wed Vg 5) M.M.

TVK board proposes profit retention

The board of chemicals company TVK RT said it would propose the April 28 company AGM to pay no dividend on2004 and retain all profits to finance strategic developments. TVK ploughed back into business all its 2003 after-tax profit of Ft 5.81 billion. TVK had unconsolidated after-tax income of Ft 10.63 billion on unconsolidated sales of Ft 163.88 billion in 2004, according to the audited Hungarian accounting (HAS) figures to be submitted for approval to shareholders. Consolidated after-tax income came to Ft 10.709 billion according to HAS and was Ft9.125 billion according to IFRS. Audited IFRS figure show consolidated sales totaled Ft 175.88 billion last year.(Econews; Wed Vg 17)

Chemimontazh inks contract with Parsons

Oil industry company Chemimontazh Kft. signed a USD 40 million contract with Parsons Flour Daniel, the American firm managing the capacity boosting project of Kazakh oil producer Tengizchevroil. The Hungariancontractor is responsible for setting up a highly trained oil industry workers' crew of 600-2000 and finding therequired management. Chemimontazh was established in 1985 for oil industry operations in Kazakhstan; sincethey have had almost no assignments over the past few years, heavy recruiting is necessary to obtain therequired human resources. (Wed Vg 13) M.M.

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FreeSoft to pay no dividend

IT company FreeSoft Rt will not pay a dividend from last year's profit of Ft 92.9 million, shareholders decided atan AGM on Tuesday. The company, which was listed on the Budapest Stock Exchange in September 2004, hadsaid in its IPO prospectus that intended to focus mainly on growth. Freesoft's main strategic goal will remain thesame, so no dividends can be expected in the coming years either, Gábor Móricz, a consultant to the company,said in yesterday's issue of business daily Világgazdaság. FreeSoft targets consolidated revenue of Ft 2.1 billionthis year. The company did not publish a profit target, citing risks, including the integration of acquisitions and

further expansion (Econews; Wed Vg 17)BA to launch four flights to Budapest

British Airways (BA) will launch four flights to Budapest every day from the start of its summer schedule, thecompany announced. So far BA had three flights per day. After BA's change there will be 13 flights per daybetween Budapest and London including BA, Malév, Easyjet, Wizzair and Skyeurope. BA now issues electronictickets only. (MH 13) M.K.

Erste -unconsolidated profit, Ft 5 bln

The new Erste Bank Hungary Rt, created from the merger of Postabank Rt and Erste Bank Rt, closed 2004 withunconsolidated net income of Ft 5 billion and consolidated net income of 7.32 billion, according to the bank'sunaudited annual figures, prepared using Hungarian Accounting Standards and published yesterday. Erste BankHungary will hold its AGM on April 29. Erste Bank Hungary had unconsolidated total assets of Ft 1,112.41 billionand consolidated total assets of Ft 1,119.65 billion at the end of 2004. Unconsolidated net assets came to Ft58.16 billion and consolidated net assets were Ft 58.53 billion. (Econews; MH 11)

OTP's ambitious road to '09

OTP Bank Rt published its general assembly documents yesterday. The strategic plans to be accepted atassembly forecast a two-digit growth rate throughout the years up to 2009, when the profit is calculated at Ft 246billion, twice as much as in 2004. Future acquisitions are not taken into account. As to 2005, the bank counts on a"decent" Ft 138.8 billion consolidated profit because of the negative effects of the bank tax and a slower growth inhousing loans. Next May Ft 48 billion will go to the shareholders in dividends of Ft 180. This five-year plan isbased on the conviction that GDP will grow by 3-4%, EURO will be introduced in 2010 and inflation in 2009 willnot exceed 3 %. (NG 1,5) K.H.

Eurotours assets for sale

Liquidator company Keszi Rt invited a tender to sell the remaining assets of Eurotours International Travel AgencyKft. The package has a total value of over Ft 6.5 million, its most valuable unit is a 35 sqm retail venue in Pécs.Kerszi also announced the first tender for subsidiary Eurotours Bus Kft's assets with a deadline on 22 April.Eurotours Air Kft is also under liquidation. Both subsidies are mainly indebted because they were the guarantorsfor parental company's banking loans. (NG 9) K.H.

HVB Bank to open 20 new branches this year

Commercial bank HVB Bank Rt plans to open 20 new bank branches in Hungary this year, CEO Matthias Kunschannounced. The bank currently operates 45 branches, but aims to increase its network to 100 branches by 2007,Kunsch said. Out of the 20 branches this year, 5-6 will be outside Budapest, Kunsch said. HVB has a 10% marketshare among banks in the corporate business sector and a 6% market share in the total banking market. (Nv 5)M.K.

Successful '04 for Ringier In 2004, Swiss-based publishing company Ringier - owner of the Hungarian dailies Blikk, Mai Nap, Nemzeti Sportand major shareholder in the biggest daily Népszabadság - closed the most successful year in their history. Netprofit grew by 28.7%, to euro 37.4 million; their turnover reached euro 750 million. The company, whose mainmarket is Central and Eastern Europe, will now focus on expansion and increasing cost efficiency. (Vg 12) M.M.

Online market to widen

According to daily Világgazdaság Hungarian online market may boost 35-50% in 2005, which could reach HUF 5billion. Increasing online spending is due to 30% Internet acces flare in 2004. HUF 4 billion was spent in Internetmarketing, specialist said, adding that the amount did not even reach HUF 2,5 billion in 2003. (BBJ Online)

E.ON Édász to pay Ft 6.638 bln dividend

The board of electricity distributor for NW Hungary E.ON Édász is proposing payment of a Ft 6.638 billiondividend from 2004's after-tax profit of Ft 8.299 billion, according to the company's AGM invitation publishedyesterday. The dividend calculates as Ft 1,770 per share. E.ON Édász is owned by E.ON Hungária, the

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Hungarian unit of German power giant E.ON. E.ON bought 100% of Édász last year and delisted the shares fromthe Budapest Stock Exchange. (Econews)

GVH may turn to constitutional court re taxis

The Economic Competition Office (GVH) said they may turn to the Constitutional Court, if Budapest local councilapproves its draft proposal on fixed taxi rates. As reported earlier, the local council wants to introduce fixed tariffsto make taxi services more transparent. According to the draft, drivers would all charge Ft 240 per kilometer instead of the current Ft 165-185. GVH believes the planned decree kills competition among taxi drivers and

companies. (MH 7) M.K.New private railway ready to roll

Central European Railway (CER) Rt the fourth new Hungarian private railway company runs from Thursday. Thecompany received an assignment from Mátrai Erőmű Rt to transport 600,000 tons of coal. 51% of CER Rt isowned by MÁV-REC Kft, which recycles waste from MÁV Rt. The rest of the company is in two minoritystakeholders hand, Slovakian Bonavir owns 24% and East Expressz owns 25%. The other three private railwaycompanies are: CER Rt., MMV Rt., Floyd Rt., Hajdú Kft. (BBJ Online)

FHB to propose stock split

Mortgage bank FHB Rt will ask its shareholders to approve a ten-for-one share split at its annual general meetingon April 22 in a bid to widen the shareholders' base of the bank ahead of the privatization of the over 50% state-held stake of the bank, expected later this year, chief executive Daniel Gyuris said yesterday. He also said thatfirst-quarter results would reinforce the management's optimism about this year's profit. Gyuris said FHB plannedto reduce the face value of the shares to Ft 100 from Ft 1,000. The aim is to increase liquidity," he said.(Econews)Economics

Gov't allocate funds for local councils

The government has earmarked Ft 4.6 billion in subsidies to support local councils this year, the governmentspokesman said yesterday. In line with a three-year plan, Ft 22.8 billion is targeted for subsidizing local councilsnext year and Ft 20.7 billion in 2007, András Batiz said. In addition, the local councils plan to finance developmentprojects by Ft 12.1 billion from own resources, he added. This year's 78 development projects earmarked for subsidy include modernization of hospitals and surgeries, building and refurbishing libraries and developing water management. (MTI; NG 3)

Platinum credit card arriving in May After much anticipation HVB Bank Rt will issue the first MasterCard platinum credit card. It will also be aEuropean premiere, deputy CEO Tibor Rácz told daily Napi Gazdaság. This new type of card can only be used inan electronic environment. He added that bank'employees have been using the new card for months.Interestingly, the transactions will be booked in HVB's Prague card centrum. In Hungary the use of real creditcards which provide an interest-free period displayed an extraordinary dynamism in H2 2004, their number grewfrom 345,000 to almost 507,000. (Ng1,4) K.H.

IMF still sees 3.7% growth

Hungary's GDP is set to grow by 3.7% this year and by 3.8% next year, the IMF said in its spring World EconomicOutlook yesterday. The Hungarian economy grew by 4.0% last year. In its last Outlook, in September 2004, theIMF had also forecast 3.7% growth for Hungary for 2005, and 3.5% for 2004. Annual average inflation in Hungary

should be 4.0% this year and 3.8% next year, the IMF said yesterday. Last September, it's forecast was 4.4% for this year, and 6.9% for last year, when the actual figure came in at 6.8%, as the IMF noted yesterday. Economicactivity in Hungary has continued to strengthen, with moderating consumption growth being offset by a rebound ininvestment and exports, the IMF said. (Econews; NG 2, Nb 12)

'05/'06 crime prevention policy approved

The government has approved its crime prevention policy for 2005-2006, the government spokesman saidyesterday. A total of Ft 300 million was allocated for crime prevention projects in 2004, and Ft 200 million isavailable for this purpose in 2005, András Batiz said. Justice ministry commissioner Katalin Gönczöl said prioritiesin the two-year strategy would include the prevention of juvenile delinquency as well as youth becoming crimevictims, combating violence within the family and urban crime. (MTI)

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Politics

SzDSz approves two MSzP candidates for president

The Hungarian Socialist Party (MSzP) has presented four candidates to its coalition ally Alliance of FreeDemocrats-Hungarian Liberal Party (SzDSz) to run for the position of President of Hungary. The four candidatesare Katalin Szili, Gyula Horn, Péter Bárándy and Ferenc Glatz. Out of the four SzDSz can support the candidacyof ex-Justice Minister Péter Bárándy and ex-head of the Hungarian Academy of Sciences Ferenc Glatz.Nevertheless, according to press information, 30 opposition MPs may vote for Szili, if she is presented as MSzP'scandidate and that may be enough for her to win. MSzP's single candidate will be decided at the party's congresson Saturday. Parliament will elect the new president on June 6-7. (Nv 1, MH 1) M.K.

MSzP catch up on Fidesz in opinion poll

The Hungarian Socialist Party (MSzP) seems to have gained popularity, narrowing the gap between the party andFidesz-Hungarian Civic Alliance, the latest opinion poll of market research institute Medián shows. According toMedián, the percentage of Fidesz voters declined from 32% to 31%, while MSzP's popularity increased from 23%to 27%. Among those who would surely go to vote if elections were held this Sunday, 49% would vote for Fidesz,44% for MSzP and 5% for SzDSz. (Nv 4) M.K.Domestic

Guards dispatched to exam paper site

The Hungarian daily Magyar Nemzet published an article and a photo yesterday about the site where the tasksheets of the upcoming high school matriculation exam are stored. Since this is possibly the single most importantexam in the Hungarian educational system, the Ministry of Education was so concerned about possible attemptsto steal the sheets that they immediately started guarding the site with armed security personnel. The Ministryalso announced that the daily's disclosure may lead to problems for 116,000 youth taking the exam this year. (Nb4) M.M.Stockwatch

BUX Close: 17480.48 Change: +60.01 (+0.34%)

Stock Closing price Daily change (%) Average price Volume MOL 16,280 -0.4 16,319 413,946 Matáv 887 1.3 882 676,750 OTP 6,618 0.6 6,594 586,872

Richter 26,500 0.1 26,519 14,671 Egis 16,900 -0.6 16,969 10,408 Antenna 4,540 0.9 4,538 26,584 TVK 5,150 -1 5,153 1,462 Rába 735 2.1 727 11,028 Exchange

FIXED MIDDLE RATE In forints

Apr 13, 2005 National Bank of Hungary EUR 1 245.95 USD 1 190.05 GBP 1 359.86 CHF 1 158.84 JPY 100 177.09 CZK 1 8.23 PLN 1 60.33 Weather

Tomorrow: cloudy

High 21°C (69°F)Low 7°C (45°F)

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15 April 2005BusinessCBA tops supermarket revenue list in 04CBA, a Hungarian-owned retail chain had more revenue than any other chain of supermarkets in Hungary,according to a list compiled by AC Nielsen for Mai Piac, a trade journal for the FMCG sector. It is the first time aHungarian-owned company has topped the list. CBA had revenue of Ft 495 billion in 2004, Ft 90 billion more thanin 2003. CBA was followed by METSPA, the joint supply company of the Hungarian subsidiaries of the Germanwholesaler Metro and retailer Spar, with revenue of Ft 450 billion, Ft 40 billion more than in 2004. In third placewas Tesco, with turnover of Ft 415 billion, up Ft 60 billion from 2003. Coop Hungary was fourth with turnover of Ft360 billion, Ft 23 billion more than a year earlier. (Econews; NG 5, MH 13, Nv 13)

NFA makes proposal to banksThe National Land Fund (NFA) has expressed preliminary interest to four banks in buying land if the debtor isunable to pay off their bank loan, according to Napi Gazdaság information. NFA was founded in August 2002, andtheir aim was to participate in land mortgage settlements in a way which is beneficial to all participants. It is agood deal for the owner, because they can sell their property for a reasonable price and free themselves of debt,it is advantageous for the banks because it helps reduce their risk, and it is a good investment for the state, sinceland prices are continuously climbing. NFA has already purchased land for Ft 648 million. (NG 1) E.C.

MÁV to reexamine rolling stock tendersHungarian railway company MÁV Rt said yesterday that it would reexamine documents related to a tender which

is being disputed by one of the procedure’s losers. MÁV also requested the tender’s winner, a subsidiary of Switzerland’s Stadler, to confirm a statement by the company saying the financial reference in its tender wasactually that of its parent company. According to press reports yesterday, Peter Jenelt, Stadler Bussnang’s salesand marketing director, said the company had actually used the financial figures from its parent, Stadler RailBussnang, in its tender. (Econews; Nv 5, MH 11, Nb 12)

Bombardier-MÁV open Ft 92 mln facilityBombardier-MÁV, a joint venture of Bombardier, the Canadian maker of aircraft and rolling stock, and Hungarianrailway company MÁV Rt, opened a Ft 92 million painting facility North of Budapest yesterday. Ft 45 million for theproject came from EU subsidies and Bombardier-MÁV financed the rest. The new facility will save the companymillions of forints a year on energy costs. The latest project is part of Ft 1 billion in investments Bombardier-MAVhas made over the last three years. Bombardier-MAV targets revenue of Ft 14 billion this year. Last year’srevenue of Ft 28 billion was boosted by a large order from Greece. (Econews; NG 5)

Hagebau eyes Hungarian market A new DIY store Hagebau has expressed interest in bringing business to Hungary, according to unidentifiedsources. There are four large DIY stores present, Praktiker and Obi being the two largest, followed by Baumaxand BricoStore. Unnamed experts say that the market is full and the low turnover records do not project thesurvival of another participant, even though on the long run, all analysts expect success. Analysts expect thesetback of the construction industry, which accounts for 10% of the sales. Hagebau group operates 39 stores in Austria and has a turnover of Euro 1.17 billion, which a 7.3% increase from the previous year. (NG 1) E.C.

UPC Direct targets 170,000 subscribersUPC Direct, cable TV company UPC’s direct broadcast satellite (DBS) service, aims to have more than 170,000subscribers by the end of 2005, compared to the current 150,000 and 140,000 at the end of 2004, the companysaid yesterday. UPC Direct generated revenue of Euro 29 million in Hungary last year, compared to Euro 20million a year earlier. This year the company expects revenue to rise by a similar amount, with the introduction of

a seven-channel family subscription package in the middle of April. (Econews; NG 5, Nv 6)Linamar to pay no dividendLinamar Hungary, a maker of car parts and farm machinery, will not pay a dividend on 2004’s profits, Linamar Hungary CFO György Furár said yesterday after the company’s AGM. Linamar Hungary has reinvested all of itsprofits for several years. The AGM approved the company’s balance sheet prepared according to InternationalFinancial Reporting Standards (IFRS). Linamar Hungary’s sales decreased 0.8% in 2004 to Ft 20.717 billion, butprofits rose 82% to Ft 541.49 million, mainly on exchange rate gains. (Econews; NG 7)

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Debrecen to start up Munich flightThe first scheduled flight from an airport outside Budapest will fly between Debrecen, E Hungary, and Munich,Germany, starting in May, Debrecen Mayor Lajos Kosa said yesterday. The mayor was speaking after signing aservice agreement with the Bremen-based OLT GmbH, adding that the move would „integrate Debrecen into thebloodstream of Europe.” The service will start with a 21 week pilot phase, in which four flights a week arescheduled each way, OLT President Bernhard Brons said, adding that the company would be using 33-seat Saab340 aircraft. (MTI; Nv 6, MH 11)

Eagle expanding in Szolnok400 new jobs are being created in Szolnok by Eagle Ottawa Hungary Kft. The company which manufactures anddeals in leather products for the car industry, is expanding employment by a Ft 1.5 billion investment. They havemanufacturing, sales, design and developing capacities. The new factory and office building represent the firstinvestment materialized in the Szolnok industry park. The new factory will be opened by Employment Minister Gábor Csizmár. (ThursVg 5) K.H.

PM in price talks with electricity suppliersPrime Minister Ferenc Gyurcsány said he has started negotiations with the country’s power suppliers, units of E.ON AG, RWE AG and Electricité de France SA, about a new method for setting electricity prices. The talks arepreliminary. New regulations, taking into account the cost of generating power, probably won’t go into effectbefore 2007, Gyurcsány said yesterday. The government increased power prices in February. Electricity costsrose more for companies than for households. (Bloomberg; Nv 6)

Borsod County steel war A large-scale offensive was mounted by Ózd Steel Works Kft against the metallurgy of Diósgyőr. The company,which belongs to Max Aicher GmbH turned first to the Competition Office (GVH), then to the court of law sayingthat during the liquidation process of Diósgyőr Ironworks they were not given the right for pre-purchase as co-owner, though they had bought 0.1 hectare property last year. Liquidating commissioner of Mátraholding Rt JánosKovács said every co-owner was continuously informed about liquidation but Ózdi Steelworks was only interestedin the property not in a 700 job factory suitable for operation. (Nb 11) K.H.

Corvinus to present new ultralightHungary’s Corvinus Aircraft will present its new two-seater ultralight, the Corvinus Corone MK-I, at the AEROinternational trade exhibition for general aircraft in Friedrichshafen, Germany, from April 21 to 24, Világgazdaságreported in its issue yesterday. Corvinus Aircraft already has orders for 18 of the aircraft and will start serialproduction as soon as it receives permission from Hungary’ aviation authority. Germany’s Ultra-Leicht-Bau-International (ULBI), a seller of ultralight aircraft, has ordered 13 Corvinus Corones, and Corvinus Aircraft hasanother five orders from Hungarians. (Econews; Thurs Vg 15)GrECo targets 40% revenue rise in 05GrECo, an Austrian insurance brokerage, expects its revenue in Hungary to increase 40% this year as companieswhich already have units in Hungary move further East, but decide to insure their new subsidiaries from Hungary,Béla Argay, who heads GrECo International’s operations in Hungary, said yesterday. GrEco International’sHungarian unit brokered insurance policies worth Ft 3 billion last year, up from Ft 2.4 billion in 2003. Thecompany’s commissions added up to Ft 350 million in 2004, compared to Ft 275 million a year earlier. Most of GrECo International’s fees in Hungary came from brokering property insurance policies. (Econews)

Merkantil to pay Ft 1.4 bln dividendMerkantil Bank will pay its owner, OTP Bank Rt, a Ft 1.4 billion dividend, Merkantil Bank president- CEO ÁdámKolossváry said yesterday. Merkantil Bank had consolidated pre-tax profit of Ft 4.9 billion last year, according toHungarian Accounting Standards (HAS), 14% more than in 2003. Consolidated total assets rose 22.1% to Ft197.3 billion at the end of 2004. The consolidated figures include Merkantil bank and four subsidiaries. This year the Merkantil group expects profits to increase 34.5% and total assets to rise 4%. (Econews)

Gazette details Young and Rubicam bidThe Budapest office of public relations company Young and Rubicam (Y+R) said it would charge Ft 16.76 million,not including VAT, to make a 30-second advertising spot in a tender to provide create and advertising services for the Prime Minister’s Office, according to the latest issue of the Public Purchases Gazette. The governmentannounced Y+R had won the Ft 220 million contract, not including VAT, at the end of March. Y+R said in its bidthat it would charge Ft 8.75 million to set up a mock campaign, Ft 4.62 million to organize events, Ft 269,000 for radio advertising and Ft 200,000 for photos. Y+R will also charge a Ft 1 million-per-month retainer fee. (Econews)

EconomicsOffshore co’s threaten to leave due to tax

If offshore companies will have to pay local business tax from next year, it is very likely that they will leave thecountry, said Gabriella Erdős, taxation expert of Pricewaterhouse Coopers. If the bill gets passed, the budget willloose Ft 20 billion. New EU regulations clearly state that companies may not operate in an offshore status, whichmeans that they are obliged to pay local business taxes. To avoid companies emigrating, the FinMin has

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proposed that the ratable value be reduced by 50% of the interest received. The same would apply to copyrightissues. There are about 700 offshore companies registered in Hungary, and they contributed with Ft 13 million tothe total budget in 2003. (NG 1) E.C.

Q1 new vehicle sales down 7.4% yr/yr Sales of new cars and sports utility vehicles (SUV) fell 7.4% yr/yr in the first quarter, according to figurespublished by the Association of Hungarian Vehicle Importers yesterday. Dealers sold 41,910 new cars and SUVsin Q1 2005, compared to 45,243 in Q1 2004 Q1 and 47,267 in Q1 2003. Suzuki led the market, selling 8,954vehicles in Q1 2005, 6.1% more than in Q1 2004. Its market share rose from 18.7% to 21.4% during the sameperiod. In Q1 2004 Suzuki sales fell 36% yr/yr, and its market share dropped from 28% to 18.5%. (Econews; NG4, Nv 6, MH 13)

Real Estate prices rise below inflationPrices of used flats in Budapest increased below the inflation rate in the first three months yr/yr. This happenedfor the first time since 1996.The average price of used flats was Ft 258,600 per square meter, a year before thatwas Ft 256,600; that is only 0.7% increase in a year. The slight increase happened because there is a strongoversupply at the market, real estate expert, László Géza Tilk said. Furthermore, the prices of used flats camecloser to new ones in the last few years, which turned the demand towards the newly built homes. The tendencyis not about to change before the second half of 2006, analyst of GKI market research company, Kristóf Pichovszky added. (Nv 1) G.R.

Banks pay Ft 36 bln to car dealersSome Ft 36 billion in commission was paid by banks to car dealers offering their loans to the customers last year.In total, Ft 723 billion loans were granted. Merkantil Bank Rt paid 6.3% commission to dealers, which means Ft98,000 per car on average, chairman-CEO Ádám Kolossváry said. Banks offer loan with more and more favorableconditions, which increases their risks. For example, the average amount of own share decreased from 35% to28% in a year. In 2004, Merkantil Bank took 2,878 cars back from their owners because they could not pay off their debts. (MH 3) G.R.

EEA and Norway to provide Euro 135 mlnHungarian projects will be eligible for Euro 27 million support annually over the next five years from fundsestablished by the European Economic Area and Norway, the National Development Office said yesterday. In linewith an agreement between the EEA and the EU which came into effect on May 1, 2004, EEA member countriesNorway, Lichtenstein and Iceland pay a participation fee into a fund in order to access the EU common market. Inaddition, Norway has signed bilateral agreements and established a fund to help the 10 new EU members. (MTI)

PoliticsSlovak PM refused to meet GyurcsányIt may have been a statement made by a state secretary that made Slovak PM Mikulás Dzurinda decline hismeeting with his Hungarian colleague planned for the next week, said PM Ferenc Gyurcsány himself according tonews agency AP. After Dzurinda cancelled the meeting personally he realized that the most probable reason isforeign state secretary András Bársony’s statement regarding the Benes Decree still posing serious politicalquestions, even today. The PM is apparently ready to settle any historical despute with Slovakia. „We cant’affordto let the past overshadow our common interests of making growing economies and cooperating sociaties in theregion,” he said. (Nb 8) K.H.

PM ready to go before committeePrime Minister Ferenc Gyurcsány told a political weekly he had no problem with going before a parliamentarycommittee that would investigate his businesses before assuming his post as prime minister. „If there will be acommittee that wishes to question me about anything, then I will be prepared to face them,” he said. Gyurcsány

remark came in the course of an interview with the 168 Óra weekly published yesterday. The largest oppositionparty Fidesz initiated in early April to set up a parliamentary committee to investigate allegations that Gyurcsányand his family used illegal means to accrue billions of forints. Fidesz claimed that Gyurcsány had exploited tieswith state-owned companies to reap illicit gains from privatization deals under the communist era. (MTI; Nb 14)

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DomesticCulture Min seeks international cooperationThe Culture Minister yesterday invited the heads of 16 cultural institutions representing foreign countries inHungary for a talk on cooperating in organizing joint events, such as commemorations of the 50th anniversary of the 1956 revolution next year. András Bozóki said the ministry planned to hold cultural events jointly with theforeign cultural institutions. Among the events he mentioned the renowned poet Attila József jubilee, to which theinstitutions could add their own translation projects. Bozóki also noted that the reception of the events of the 1956

uprising abroad was an area little covered in research and one in which cultural institutions could participate byholding conferences. (MTI; Nb 15)

StocksBUX Close: 17372.57 Change: -107.91 ( -0.62%)Stock Closing price Daily change (%) Average price VolumeMOL 16,050 -1.4 16,040 358,873Matáv 884 -0.3 882 566,352OTP 6,580 -0.6 6,571 187,781Richter 26,650 0.6 26,534 14,701Egis 16,900 0 16,856 8,274 Antenna 4,580 0.9 4,560 3,445TVK 5,160 0.2 5,155 6,257

Rába 740 0.7 734 15,133Budapest Stock Exchange

Exchange RatesFIXED MIDDLE RATE In forints Apr 14, 2005 National Bank of HungaryEUR 1 246.58USD 1 191.59GBP 1 361.63CHF 1 158.75JPY 100 177.58CZK 1 8.23

PLN 1 59.93Weather Tomorrow: cloudyHigh 19°C (66°F)Low 9°C (49°F)

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18 April 2005Business

CBA opens Ft 4.5 billion logistics base

CBA Kft, Hungary's biggest supermarket chain in terms of revenue, opened a Ft 4.5 billion logistics base south of Budapest on Friday. CBA paid for the 30,000 sqm warehouse complex with its own resources, bank loans and Ft250 million in state subsidies. CBA expects Ft 70 billion worth of goods to pass through the site this year. The new

logistics base has five times of the capacity of the old Budapest one it will replace. CBA is also planning to build ameat processing plant and a produce packaging centre in the future. CBA had revenue of Ft 495 billion in 2004, Ft90 billion more than in 2003, and plans to boost sales to Ft 500 billion this year. (Econews)

Csiki-Bege car plaza opens in Bp Dist 3

Csiki-Bege car plaza, the first plaza to sell cars of different makes at one facility, has opened today in Budapest'sDist. 3. Csiki-Bege Kft invested Ft 3 billion into the new plaza of 18,500 sqm., owner Lajos Csiki-Bege said. Thecompany paid 75% of the costs from a bank loan and 25% from its own resources, Csiki-Bege said. The plaza willsell new and second-hand cars, commercial vehicles, motorbikes as well as offering repair and insuranceservices. Currently the plaza sells Fiat, Lancia, Subaru and Mercedes vehicles. (NG 4) M.K.

Masped to bid for Bulgarian company

Besides four local bidders, freight forwarding company Masped Rt has submitted its bid to buy a 70% stake of

Bulgarian River Shipping Company (BRSC), the Bulgarian News Agency reported. The Bulgarian privatizationagency is looking for an investor with a freight forwarding and logistics activity of Euro 30 million in each of the lastthree years. BRSC's privatization is expected to be finished by June this year. Masped reported a net revenue of Ft 25,707 million in 2003. (Fri Vg 11) M.K.

Pannonplast restructures only in Q2

A reorganization at Pannonplast Technical Plastics (PMM), Pannonplast Rt, will start in earnest only in Q2, thecompany announced on Thursday. The reorganization was expected to boost the unit's efficiency and make itprofitable by the end of H1 2005. Pannonplast blamed PMM's Ft 1.85 billion losses for the Ft 1.83 billion losses itposted in 2004. "PMM's reorganization is continuing, albeit with some delay, but we will see it completed,"Pannonplast CFO Dénes Gyimóthy told a press conference on Friday. (Econews; NG 8)

Synergon signs agreement with Huawei

IT company Synergon Rt said on Friday it had signed an agreement with the Chinese company HuaweiTechnologies Investment Co. which authorized members of the Synergon group to use Huawei's products whenproviding customers system integrator solutions. The agreement is for one year, does not give exclusive rights,and is effective for Synergon's area of operation. Synergon expects to make use of the potential the agreementoffers mainly through its foreign subsidiaries, the Czech firm Infinity, Infinity Slovakia and Span, based in Croatia.Huawei is one of the biggest Chinese company in the field of telecom products and network solutions. (Econews)

INA-MOL bids for Engergopetrol stake

Three companies, including a consortium of Hungarian oil and gas company MOL Rt and its Croatian unit INA,have bid for a 67% stake in Bosnia's biggest fuel retailer, Energopetrol, Bosnia's Industry, Energy and MiningMinister Izet Zigic announced on Friday. INA-MOL is reported to have said it would pay Euro 5.1 million for thecontrolling stake, would take over all of Energopetrol's debts, invest Euro 76.7 million in the company over thenext three years and keep all 1,059 employees of the company. MOL said earlier it submitted a binding bid for acontrolling stake in a 50-50% consortium with INA in which it holds 25% but did not reveal details of the bid. Austrian OMV reportedly offered to pay Euro 13.2 million of Energopetrol's debts and make Euro 16.8 million ininvestments in the company. The reports did not name the price OMV offered for the stake. (Econews; NG 7)

MÁV, Deutsche Bahn, may bid for Slovakian rail unit

The Hungarian State Railway (MAV) Rt, Deutsche Bahn AG, the Austrian State Railway (OeBB), and U.S.investment group Rail World are among the parties that have expressed interest in the Slovakian State Railways'ZSSK cargo business, the Financial Times Deutschland reported in an article to appear in Monday's edition. Thearticle, which cites unnamed Slovakian government sources, says that an invitation to bid for ZSSK will be issuedin May and that the government hopes to reap up to Euro 514 million through the sale. The Slovakian StateRailway has contracted HVB Group's Creditanstalt Investmentbank to organize the tender process. (AFX)

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Two Bp hotels found bypassing water meters

The owners of two Budapest hotels were charged with stealing water by using connections that bypassed their meters and underpaying bills for several years running, Havaria Press reported. Police responded to a call fromthe municipal water works, which suspected it was being short-changed and ran checks on two Budapest hotels,one in Budapest's 15th district and one in the 14th, which had been paying inexplicably low water bills, one for fiveyears and the other since 2002. Police discovered that the hotels had bypassed the water meters for the bulk of their consumption and ended up being billed for only 3-4 cubic meters' water use, instead of the 24-25 cubic

meters actually consumed. The thefts are estimated to have cost the water works about Euro 38,000, with thesewage works being out by a similar amount. (MTI)

Hungo-Russian nanotech. base to start in autumn

A Hungarian-Russian research base will begin operating in the autumn in Miskolc said Miklós Boda, president of the National Research and Technology Office (NKTH), at a press conference in Budapest on Friday. The facilitywill develop applications and will manufacture devices, mainly measuring instruments, from a later date. Boda didnot disclose details about the collaboration's financial background, but said that Hungary would provide theinfrastructure, while Russia would contribute the scientific background. He said the medicine industry could be thekey beneficiary of the cooperation. Sergei Nikolayevich Mazurenko, head of Russian Federal Science Agency,said that they wished to use the Hungarian base as a stepping stone to the European nanotechnology market.(Econews; NG 5)

Nabi proposes capital reduction; shares declineHungary's Nabi Bus Industries Rt, the third-largest supplier of city buses in the U.S., will ask shareholders toapprove a reduction in the face value of the company's shares after a fourth-quarter loss. Nabi is proposing to cutthe registered capital, or total face value of the shares, to Ft 518 million from Ft 4.62 billion at the meetingscheduled for April 29, to comply with Hungarian accounting requirements, the company said in documentspublished on the Budapest Stock Exchange's Web site today. The fourth-quarter loss at Nabi widened eightfoldafter taking charges to cover job cuts and other cost reductions, it said in February. "The decrease of the capital isbeing carried out in order to cover the company's losses," the Budapest-based company said. Nabi shares fell 20forint, or 6.9 %, to Ft 270. (Bloomberg)

State-owned co invests in SMEs

The SME Development Financial Rt invested Ft 1.527 billion into SMEs up to the end of March, CEO Krisztina Arató said. The company, whose 88.24% stake is owned by the state, with the rest controlled by commercialbanks, plans a Ft 2.5 billion placement of capital by the end of 2005, Arató added. SME Development Financialcan gain access to a stake of maximum 49% stake in an SME, and the amount it invests falls between Ft 10million and Ft 100 million over 3-5years. (Fri. Vg 5) P.O.

Govt. talks with haulage companies over diesel price

Representatives of road haulage companies and the government met again on Friday to discuss how to lessenthe effect of vehicle fuel price rises on the haulage industry. MOL Rt last Saturday raised the price of petrol Ft 7 toFt 258.50 per liter, and the price of diesel by Ft 5 to Ft 252 per liter. Prices reached an all-time high benchmarkpetrol price increases have added up to 13.1% since the beginning of this year. Government negotiators from theFinance Ministry and the Economics and Transport Ministry said that the government is restricted by EU rulesregarding excise taxes, but would examine these regulations to determine whether or not it is possible to satisfyhaulage companies' demands. (Econews)

Central bank worried in spite of high profitabilityThe central bank has warned again of increased risks the country's banking sector is taking on because of stronger competition and the booming popularity of foreign currency-denominated loans. "The Hungarian bankingsector shows a very contradictory picture, based on 2004 results: credit institutions' profits exceeded all records,but many worrying tendencies were also noted," the National Bank of Hungary (MNB) said in its first-quarter report published on Friday. Banks' stock of foreign currency denominated loans rose rapidly, and the MNBexpects the trend to continue. Forex loans are approaching 30% of the total stock of personal loans. (Econews)

Local bureaucracy delays EU funding

Almost 50% of the EU funding available for Hungary between 2004 and 2006 has been awarded to companies,but the winners strongly criticize the local National Development Office for the slow-paced funding allocation andcontract signing. Only 26% of the winners have signed contracts so far, and only Ft 9.172 billion has been

allocated. According to Zsombor Essosy, managing director of the Hungarian Office of Preparation for EU Applications, small and mid-sized projects can get access to funding only 12-14 months after the application. Atotal of Ft 665 billion has been earmarked for Hungary for the three years. (Fri. Vg 1) P.O.

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GLB Invest to build residential parks in Herend

Real estate developer GLB Invest Kft plans to build two residential parks in Herend, west Hungary. The companyhas recently purchased 129 sites for Ft 212 million in Herend. The project is to start in the second half of this year and is expected to cost billions of forints. Both residential parks will have a swimming pool and playgrounds. (NG17) M.K.

F-L has new product for co-ops

Home savings bank Fundamenta-Lakáskassza Rt (F-L) saw the value of its contracts with home cooperatives andprivately owned blocks of flats rise a quarter in 2004 to Ft 12 billion. The contracts, which are used for money torenovate common areas, such as courtyards, or to give the entire building a face lift, account for just a little morethan 1% of F-L's total 440,000 contracts, but F-L has developed a special product which will allow cooperatives topay through home savings for the principal of a bank loan taken out to finance the improvements. Land Credit andMortgage Bank (FHB) Rt and HVB Bank Hungary Rt have agreed to lend cooperatives money for the cost of renovations, if the cooperatives start an account with F-L at the same time. (Econews)Economics

10,000 illegal workers discovered in Q1

During the first three months of the year, the National Labor Affairs and Labor Safety Supervision (OMMF) haslevied a total of Ft 300 million in fines on a thousand companies for employing around 10,000 people illegally,chairman András Békés said. Bogus work contracts are rampant amongst personal and property protection,construction, agricultural and trade and tourism companies, while employing foreigners illegally is still common inconstruction, agricultural and tourism ventures. Associations representing these industries agree that unless thegovernment reduces tax and contributions for companies, the ratio of the black industry will not changeconsiderably. (Fri. Vg 1) P.O.

Industrial output up 1.3% yr/yr in February

Hungary's industrial output rose a working-day adjusted 1.3% yr/yr in February, the Central Statistics Office (KSH)reported on Friday. Industrial output fell 0.6% in February compared to January, according to seasonally andworking day-adjusted figures. Unadjusted figures show a 1.0% rise from February 2004. In the first two monthsindustrial output was 1.8% higher than in the same period last year. Preliminary figures reported last weekshowed only a 0.3% seasonally and working day-adjusted monthly decline in February and a 1.6% increase intwelve months, according to working day-adjusted figures. (Econews; NG 4)

Malév to get six serious bidsProfessional circles believe that out of the 14 applicants there are only six "serious" bidders in the privatizationtender for Hungarian Airlines Malév Rt. The "serious" bidders could be Krasair, Argus Capital Ltd, Air Europe,Euroinvest, Aviation Solution and Portuguese company, whose name was not disclosed. Aviation Solution, whichis led by former Malév CEO Ferenc Kovács, who bid for Malév already in the first privatization tender. Kovácswould fly Malév to more destinations in the region, he said. (NG 4) M.K.

MNB reports 40% drop in forint forgery in Q1 of 2005

Exposed cases of forint forgery and the number of counterfeit forint notes fell by 40% in Q1 of this year comparedto the same period of 2004, the National Bank of Hungary reported. MNB experts examined 1,837 counterfeitforint notes seized in connection with 1,759 cases in the first quarter of this year, the bank reported. It said theforint notes were not forged by traditional printing methods, but with the use of office equipment, such as color

printers and photocopiers. The number of counterfeit foreign notes continued to drop: 262 counterfeit notes wereseized in connection with 215 cases in Q1 of 2005. (MTI)Politics

Fidesz chair argues Mádl should be re-elected

The chairman of the main opposition Fidesz party on Sunday urged the government coalition to set aside partisanviews and re-elect Hungary's current president Ferenc Mádl for another five-year term. "As former President Árpád Göncz served two terms in office ... one possible solution would be for the coalition parties to set asideparty politics and to say, why change the president at all," ex-PM Viktor Orbán said on public radio. WhilePresident Ferenc Mádl, elected under Orbán's premiership in 2000 with the backing of the current oppositionparties, has not made it clear if he would continue in his office, he did informally suggest he would prefer to stepdown. Orbán said the issue of Mádl's succession has been degraded into petty power bargaining between thegovernment coalition parties. "I don't think this is right," Orbán said. (MTI; Nb 1, Nv 1, 9, MH 7 )

DomesticJudiciary's code of ethics ready

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A detailed and strict code of ethics for the judiciary, recently approved by the National Judiciary Council (OIT), isexpected to come into effect in a few weeks, OIT President Zoltán Lomnici announced. The document regulatesmany aspects of the private and professional life of judges; for instance, it requires them to abstain from politicalactivities to the extent that they must not even assume a role in charities associated with political parties. Thecode stipulates expected norms of behavior in court and advocates that judges seek to resolve problems in their private lives to minimize negative impacts on their work. "It is a good thing if there is a standard against which tomeasure the judges' actions, and if the members of the judiciary know what is expected of them", Lomnici said.(Nv 3) P.P.

FinMin investigates Gambling Supervision

The Finance Ministry has started an investigation to decide whether the Gambling Supervision is over-generous inspending state funding, and whether the governmental watchdog differentiates between gambling companies. For instance, the Supervision has recently rented the offices of the Dist. 5 municipality and a youth center for Ft 30million, although the governmental agency has its own training facility in Parád, northern Hungary.Representatives of gambling companies using slot machines claim the Supervision is far from impartial whenissuing licenses to practice. Some business ventures receive the permit despite owing several million forints to theNational Tax Office (Apeh), while others are turned down for no particular reason. (Nb 1) P.O.Stockwatch

BUX Close: 17,128.47 Change: -244.10 (-1.41%)

Stock Closing price Daily change (%) Average price Volume MOL 15,975 -0.5 15,853 966,916 Matáv 875 -1.0 875 340,289 OTP 6,365 -3.3 6,363 1,255,599 Richter 26,800 0.6 26,693 55,360 Egis 16,755 -0.9 16,773 16,752 Antenna 4,545 -0.8 4,544 14,186 TVK 5,150 -0.2 5,157 5,042 Rába 750 1.4 747 53,750 Budapest Stock Exchange Exchange

FIXED MIDDLE RATE In forints

Apr 15, 2005 National Bank of Hungary EUR 1 247.27 USD 1 192.46 GBP 1 362.52 CHF 1 159.22 JPY 100 177.99 CZK 1 8.23 PLN 1 59.81 Weather

Tomorrow: rain

High 14°C (58°F)Low 8°C (47°F)



7days, 2005. április 18

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