7days, 2005. február 14

7/28/2019 7Days, 2005. február 14.

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

02 June 2013Business PSzÁF approves OTP’s Bulgarian units

Karsai invests in TiszaújvárosSolvo to develop with U.S. drugs firmHungary attracts offshore investmentPátria puts Ft 100 bln into makeover

Grundfos plans further investmentRaffeisen fund acquires WestpointKorrgép lays off 70Nitrokémia production restarts?Fégarmy liquidatedSamsung CEO changeOTP Alapkezelo to offer two new guaranteed fundsSugar producers ride on crest of EU entry

Economics Motorways will add drive to economy - Merril LynchCentral bank to convert part forex revenueGDP growth forecast at 3.9%

Politics NATO reiterates preference for Zengo HillLiberals claim Socialists water down agent law András Bozóki named Culture Minister

Domestic January budget deficit totals Ft 198.4 blnBelgian-Hungarian biolabSewerage + waste budget swells to Ft 44 blnBroken water pipe causes traffic chaosFt 25 bln on education in Budapest

Stockwatch BUX Close: 16258.50 Change: +225.67 (+1.41%)Exchange Fixed Middle RateWeather Tomorrow: sunny

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7/28/2019 7Days, 2005. február 14.



02 June 2013Business Bank Tax Will Cost Otp Ft 9.6 Bln

Vanreusel Chooses Mórahalom For Plant Allianz Premiums Revenue Ft 153.2 Bln Asahi Builds Glass Factory In TatabányaHernádvíz To Be Liquidated

Court Rules In Favour Of PólusFix Tv Remodels As Tv7Passnave Sale FloundersBudget Flights Boosted Tourism In 2004Zalakerámia Subsidiary Shares Change Hands Áak Issues Euro 1 Bln BondsHotel Occupancy Stable At 38.4% In JanuaryLikely Automotive Company Q4 Results

Economics Foreign Trade Deficit Euro 3.879 Bln In 2004Microloans Magnified To Ft 5 MlnIraq Mission To Cost Ft 3 Billion This Year

Politics Committee Oks Nominees To Central BankPm Wins Libel Case Against Szijjártó Arab Diplomats Offended By Gyurcsány RemarkOpposition Leader Uses National Tour To Test Ideas

Domestic Study Of Possible Waste Storage Facility BátaapátiPms Confirm Joint Bid For 2012 Soccer ChampionshipHospitals Initiate Cooperation Project

Stockwatch Bux Close: 16,305.04 Change: +46.54 (+0.29%)Exchange Fixed Middle RateWeather Tomorrow: P/Cloudy

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02 June 2013Business Egis Q1 net more than doubles on exports

Bp transport workers threaten strikeElemér Terták new Hitelgarancia CEOPricing regulations cut Démász marginMagyar Cetelem Ft 4 bln profitZwack profit up 7.5% yr/yr

Malév adds 3 destinationsSynergon's profits surprisesÁPV says NTK privatization OKCsepeli accepts 2 offers following tender 8 banks fail PSzÁF inspectionHVBJ offers Ft 400 mln of 1-yr bondsWindel textile liquidatesUnsuccessful Euro Möbel auctionMOL pays Ft 1 mln fine

Economics PM outlines aims of tax reformPensioners get 1st of "bonus" pensionGyurcsány and Demszky talk city plansSlow distribution of EU subsidies

Disaster Prevention spends Ft 5 bln on developmentFood industry in troubleFixed telephone lines drop by 38,000

Politics PM in Ukraine to meet counterpartPolitical Capital to put agent list on net

Domestic Three die in gas explosionStockwatch BUX Close: 16464.79 Change: +159.75 (+0.98%)Exchange Fixed Middle RateWeather Tomorrow: snow

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02 June 2013Business Ground broken for M6

ÁPV picks bidders for Hungexpo tender T-Mobile sets up test 3G networkSky Alliance set to bid for MalévFreesoft increases net income by investing

Pannon-Váltó to merge subsidiariesMatáv gets 2nd downgrade in 2 daysWaberer’s gets Zwack logistics contractFt 9 bln sought from Duna ProfitLotto prices set to riseFt 20 bln waste process. site for GyöngyösCroat Cent. Bank OKs Nova purchase

Economics MOL Q4 profit down 4%Ex-bank presidents share views Alternative estimates of grey economy at 20%-26%“Historical’ chance for tax policiesSzéles to launch TV channelProfits up, trade stays same for HotelsUniversities contest new par in Budget ActPHARE cross border scheme signedKovács warns VAT danger for new EU members

Politics Fidesz: Gov’t wants to skimp Ft 4 bln on HealthDomestic Monk receives Person of Year awardStockwatch BUX Close: 16451.53 Change: -13.26 ( -0.08%)Exchange Fixed Middle RateWeather Tomorrow: cloudy

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02 June 2013Business OTP Group net income up 68%

TVK net profit up 71% in 2004MOL Q4 operating profit soarsMichelin opts for Poland

Antenna posts Ft 11.6 bln net profitNabi Q4 loss widens on job-cut charges

BSE shares to be traded at BSEK&H Bank profit up 135% in 2004Borsodchem profit surges in Q4BKV workers set to strikeElectric earnings from Elm? and ÉmászMFB to pay dividend this year Matáv posts Q4 loss on competitionThree banks' interest rates declineRába returns to profitHVB more than doubles on '04Malév EGM approves new chairman and CEOZalakerámia closes with a lossFotex takes a 75% loss

IEB profit up 18%Bank Gutmann establishes investment officeFHB up 75%Linamar profits up despite falling sales

Economics GKI projects slowing investment growthProject subsidies

ÁAK set to sell more highway stickersPolitics Hungarians stand divided over WWII battleDomestic Eastern Euro Catholic leaders in BpStockwatch BUX Close: 16390.18 Change: -61.35, (-0.37%)Exchange Fixed Middle RateWeather Tomorrow: snow

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02 June 2013BusinessPSzÁF approves OTP’s Bulgarian unitsThe Financial Supervisory Authority (PSzAF) has approved the setting up of three Bulgarian companies by OTPBank Rt. The companies are part of OTP Bank’s Bulgarian bank, DSK. One of the companies is DSK AssetManagement EAD, wholly owned by OTP Alapkezelő Rt. Another company, DSK Standard Investment Company AD, is really an investment fund, but must operate as a corporation under Bulgarian law. The company’sregistration in Bulgaria is still underway. OTP Alapkezelő owns all of the DSK Standard Investment’s shares butone. The third company is DSK Garancia Insurance Company AD, a non-life insurance company with registeredcapital of BGN 3 million, owned by OTP Garancia Biztosító Rt (74%) and DSK Bank (26%). (Econews)Karsai invests in TiszaújvárosSzékesfehérvár-based plastics maker Karsai Holding Rt has bought a 2-hectare site at the industrial park of Tiszaújváros, eastern Hungary with a view to building a production plant that the company hopes will supply localengineering companies, in particular Jabil Circuit Kft, unnamed sources reported. Karsai Holding, which wasestablished in 1998 by top businessman Béla Karsai and has today 8 member companies, is expected to sign upsome 150 staff for production. Details of the investment are due to be announced this Wednesday. (NG 1) S.F.Solvo to develop with U.S. drugs firmSzeged based biotech company Solvo Rt has signed a contract with an unnamed American pharmaceutical firmto further develop a diagnostic product group, said company CEO Erno Duda. Solvo is currently working on thediagnostic and therapeutic development a new protein family, to which a Ft 250 million state subsidy, and a Euro1.4 billion EU contribution has been awarded. The most successful products of Solvo are the so-called ABC(Xenobiotic) Transporter Assay Products, which can be applied for screening drug interactions with ABCtransporters in the course of drug research and development thus accelerating the drug testing process. The top10 pharmaceutical companies worldwide are among Solvo’s clients. The company is expecting to have USD 2million in revenues this year from drug screening systems sales. (Vg 5) E.C.Hungary attracts offshore investmentHungary is the world’s 8th most favored destination for offshore investment, a freshly released survey by theEconomist Intelligence Unit (EIU) revealed. The report, sponsored by America’s Oracle Corp. and DimensionData, ranked 60 countries on the basis of political stability, economic, taxation and labor regulatory environment,skill and cost of labor, and infrastructural development. On the regional level, Hungary is preceded only by theCzech Republic (3) and Poland (5). (NG 1) S.F.Pátria puts Ft 100 bln into makeover Pátria Printing House Rt is to spend Ft 100 million-Ft 150 million on profile adjustment and technologydevelopment in 2005, said majority owner Olivér Dombrádi to Világgazdaság. After the EU accession, the fall indemand of duty forms and tax return forms has been significant. The company operates 12 stores countrywideselling business forms and stationery, and plans on opening some more in the near future. Pátria plans on toppingits last year turnover Ft 4.5 billion by 5-6% this year and wants to exceed its 2004 pre-tax profit Ft 150 million-Ft160 million by 30% to reach approximately Ft 200 million this year. (Vg 8) E.C.Grundfos plans further investmentDanish industrial pump maker Grundfos’s local subsidiary expects revenues to go up 10% to Ft 7.7 billion thisyear, as well as to increase production capacities five fold over the next 4 years, as infrastructure projects usingits products increase in Hungary upon EU entry. Last year Grundfos Hungária Kft increased its revenues from Ft 6billion to Ft 7 billion, while net profits increased from Ft 240 million to over Ft 270 million, József Jánvári,managing director of the company said on Sunday. Grundfos’s market share is more than 30%. The company, setup in 1996, has invested Ft 10 billion since 1999 in its production plant in Tatabánya, western Hungary, Jánvárisaid. Hungary, using an influx of EU funds, is busy building out sewage lines across the country. (Econews)Raffeisen fund acquires WestpointFollowing months of groundwork, Raiffeisen Real Estate Fund last month signed a deal to buy the WestpointBusiness Center in Budapest’s Dist. 13 for Ft 1.5 billion, adding the office building to its real estate portfolio valuednow at Ft 18 billion. Raiffeisen’s real estate fund boosted its assets by nearly Ft 3.5 billion in January currentlyexceeding Ft 30 billion. Real estate investments make up 62% of the fund’s total assets. (NG 12) S.F.

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Korrgép lays off 70Szombathely-based food industry machine manufacturer Korrgép Savaria Kft is to lay off 70 of its workers,reducing its staff to 120 people. The decision has been made after the German partner, which has 38%ownership, announced unexpectedly that it could give no orders to the company, said newly nominated CEONorbert Paksa to daily Világgazdaság. Korrgép was founded in 1994 and had a turnover of Ft 1 billion last year.The number of employees had already been reduced from 230 to 190 last March, Paksa, however is optimistic.The company has started an extensive marketing program and is negotiating with the surrounding countries. Hebelieves that Korrgép’s greatest advantage is meeting individual demands as opposed to mass production. (Vg 8)E.C.Nitrokémia production restarts?Production may restart early this week in the currently under liquidation, Balatonfuzfo-based chemical companyNitrokémia 2000 Rt, said Jeno Varga, CEO of Vectigalis Rt, which is currently directing its liquidation. Nitrokémiaplans on producing pesticides, the agreement to ship such products worth Ft 2 billion - Ft 2.5 billion to Israelichemical firm Makthesim has been reached, the contract is soon to be signed. Nitrokémia plans to break evenwith a Ft 8 billion turnover in 2005. The workforce may need to be cut, but the number of people to be laid off hasnot yet been confirmed. (Vg 7) E.C.Fégarmy liquidatedThe liquidation of Fégarmy Kft has ended its 114-year long tradition of weapon production, said liquidationcommissioner József Viszkok. They still have 2 orders to fulfill, so the dismissal of the 240 workers has not yetbeen announced. The production, however, is impossible to carry out, since the utility company has stopped itsservices because of the arrears accrued, so the fulfillment of these last two orders will depend on whether theycan reach an agreement with the utility company. Fégarmy was privatized in 2002 when The State Privatizationand Holding Rt (ÁPV) granted a loan of Ft 80 million. In 2003, it was bought by a neighboring drug companyFúzió-Pharma Rt for Ft 230 million. The company’s only assets are its properties worth Ft 1.5 billion, however, it isstill questionable whether anything would remain after the mortgage has been paid off. (Nb 16) E.C.Samsung CEO changeSamsung Electronics Magyar Rt’s president Kyu Dam Cho will leave his position this month and be replaced by J.K. Hong, who has been previously working as vice president of Samsung’s Jászfényszaru plant, north of Budapest. Kyu Dam Cho has been with Samsung Electronics Rt since 1998. The new president announced thatSamsung will rely increasingly on Hungarian R+D in the future. The company manufactured 2.4 million TV setslast year. (Vg 5) R.G.OTP Alapkezelo to offer two new guaranteed fundsOTP Alapkezelo Rt, OTP Bank’s fund manager, is offering two new investment funds with guaranteed returnsbetween February 14 and March 25. One of the funds is the OTP Prizma Guaranteed Open-Ended DerivativesFund. The fund runs until December 31, 2007, but, unlike closed-end funds, OTP will distribute the fund’s Ft 1units for the entire tenor at net value. The fund guarantees a minimum annual yield of 6%. The other investmentfund is the OTP Alfa Guaranteed Closed-End Derivatives Share Fund. The fund also runs until the end of 2007.The Ft 10,000 units pay an annual 7% in the first year, and a yield to be determined by the performance of 16international shares in the second and third years. (Econews; NG 11)Sugar producers ride on crest of EU entryHungarian sugar companies produced a bumper 500,000 tons of sugar in the past season, while producer pricesgrew by a third thanks to newly enforced EU regulations in the sector, the Sugar Industry Union (CIE) said. Butwhereas Hungary’s EU entry last year is mostly viewed among players as fillip to the local industry, local sugar producers are increasingly concerned about growing imports from Balkan states. (NG 1) S.F.

EconomicsMotorways will add drive to economy - Merril LynchFinancial management and advisory company Merrill Lynch expects new motorway constructions to boost theeconomy in Hungary this year in its recently published forecast. However, the company also warned that theprogram might burden budgets in coming years and consequently endanger Hungary’s complying with the EU’sconvergence criteria. Merrill Lynch corrected its annual economic growth forecast from the previous 2.6% to 3.2%for 2005. The reports also predicts basic rate to be cut to 8.5%, 8% and to 7.75% in February, March and Junerespectively. (MH 11) R.G.

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Central bank to convert part forex revenueThe National Bank of Hungary will continue the practice it started a year ago of converting part of the netproceeds of the government’s foreign currency borrowing into forints on the interbank forex market, the MonetaryCouncil decided at its meeting yesterday. The statement the bank issued on yesterday’s decision did not specify anominal target for this year’s market conversions. The bank said yesterday the government would probablyconvert Euro 2.5 billion from EU transfers and foreign bond issues into forints this year. The bank said it wouldconvert part of this on the forex market into forints, and the rest - to go into international reserves - it wouldconvert itself. The bank started channelling part of the government’s net conversion onto the interbank market inFebruary 2004 in order to limit the boosting effect its direct foreign currency conversions have on the forint’sliquidity. (Econews)GDP growth forecast at 3.9%Research institute Kopint-Datorg Rt predicts 3.9% in GDP growth and a 4.2% annual inflation rate for 2005 in itsforecast published yesterday. The company also prognosticate a 6.3% unemployment rate and 7.5% industrialoutput growth this year. Kopint-Datorg Rt’s experts think that foreign working capital investment will mount up toEuro 4.2 million in 2005 compared to last year’s estimated Euro 3.8 million. (Nv 5) R.G.PoliticsNATO reiterates preference for Zengo HillNATO would prefer to see its planned radar facility built on Zengo Hill, southern Hungary, the leader of parliament’s defense committee reported from Brussels yesterday. Zsolt Németh, of opposition party Fidesz,

spoke to MTI following talks with NATO leaders, including Secretary General Jaap de Hoop. Hungary’s envoy toNATO János Herman said that Zengo Hill, a nature conservation area, had been selected jointly by Hungary andNATO. Although NATO would accept an alternative choice, he said, the approval of that choice by each and everymember nation would be required before Hungary could expect any co-financing. Earlier yesterday, Greenpeaceactivists set up a round-the-clock vigil on Zengo Hill, a nature conservation area, sleeping in tents on the hilltop toprevent any tree-cutting in preparation for building the base. (MTI; MH 2, Nb 3)Liberals claim Socialists water down agent lawThe parliamentary majority needed to pass a long-delayed law on exposing communist era internal spies seemsto be in jeopardy after the socialist MSzP’s changes to the bill have met the disapproval of the liberal SzDSzparty, the socialist’s coalition ally. Speaking to a commercial radio yesterday, SzDSz executive Gábor Fodor saidthe amendment the socialists had submitted to Parliament last week changed the bill significantly and in factmade it pointless. Fodor argued that the changes would introduce a loophole in the law, making it possible for secret services to continue to hide a huge number of documents. Socialist Party lawmaker Sándor Burány playeddown the changes as ‘technical corrections’. (MTI; Nv 3)András Bozóki named Culture Minister Prime Minister Ferenc Gyurcsány appointed András Bozóki for Cultural Heritage Minister. A sociologist andpolitical scientist, 46-year-old Bozóki is currently a lecturer at the Central European University (CEU). Hegraduated from Eötvös Loránd University in Budapest and earned a second degree from California University inLos Angeles. One of the founders of liberal weekly Magyar Narancs, he was a member of Fidesz predecessor the Alliance of Young Democrats until 1993, when the party began shifting to the right. Between 1993 and 1994 hewas on the informal team of advisors to then-Prime Minister Péter Medgyessy. Bozóki is taking the position over from István Hiller, who has resigned as of Feb. to focus on his responsibilities as President of the HungarianSocialist Party (MSzP) in the forthcoming election campaign. (BBJ; Nv 1, NG 3, Vg 4, MH 7, Nb 8)DomesticJanuary budget deficit totals Ft 198.4 blnThe budget deficit in January was less than expected, as the government collected more social securitycontributions from employers and spent less on medicine subsidies. The January budget deficit totaled Ft 198.4billion, compared with the government’s earlier estimate of Ft 210 billion. The shortfall compares to Ft 218.8 billiona year earlier. ‘The balance of social security funds was more favorable than expected,’ the Finance Ministry saidin a faxed statement. The improvement ‘was a result of higher revenue from contributions and lower expenses for medicine subsidies than expected.’ (Bloomberg; NG 1, MH 2, Nv 5)

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Belgian-Hungarian biolabThe Hungarian and Belgian armed forces plan to set up a joint biology and chemical defense laboratory,Hungarian Defense Minister Ferenc Juhász announced yesterday, after meeting with his Belgian counterpart Andre Flahaut in Budapest. The idea came after Belgian officials visited a mobile laboratory unit developed by theHungarian Armed Forces, and used by the NATO response force providing security at the 2004 Olympic andParalympic Games in Athens. The doctors and biologists at the lab had been charged with analyzing agents usedin a possible chemical or biological attack to determine ingredients and/or pathogens, including anthrax. (MTI)

Sewerage + waste budget swells to Ft 44 blnHungary will have Ft 44 billion in funding available for sewerage and waste management systems this year, twicethe amount available in 2004, Environmental Minister Miklós Persányi said yesterday. Money for four big projectsin Szeged, Debrecen, Szolnok and the Zala Valley, in addition to preparations for another four big projects, willcome from the central budget and EU funds. The Environmental Ministry aims to make selective waste sitesavailable to 6 million Hungarians this year. The Ministry’s other aims include preventing hazardous waste frombeing disposed of improperly and shutting down illegal dumps, Persányi said. (Econews; Nb 11)Broken water pipe causes traffic chaosTraffic in the southern area of downtown Budapest was seriously disrupted yesterday after water gushing from abroken main pipe inundated a major artery of the city. The 150-millimeter pipe runs under the tram tracks andbroke close to the Great Market Hall. Broken water mains have been a recurring nuisance to people in Budapestover the past few years. Long stretches of the city’s underground pipe network are old and badly need repair or replacement. (MTI)Ft 25 bln on education in BudapestThe Budapest municipality decided to spend Ft 25 billion on the reconstruction of municipality-owned schools by2010, Mayor Gábor Demszky announced yesterday at a press conference jointly held with Educational Minister Bálint Magyar. Some 58 buildings, mainly high schools, will be refurbished through the program, which will effectthe life of almost 38,000 students. Demszky also added that all Budapest schools will be provided with broadband Internet access by the end of this year. (Nv 4) R.G.StocksBUX Close: 16258.50 Change: +225.67 (+1.41%)Stock Closing price Daily change (%) Average price VolumeMOL 13,525 2.5 13,377 610,857Matáv 937 1.3 929 1,435,150

OTP 6,087 1.5 6,063 897,402Richter 264,495 0.1 26,382 76,985Egis 14,700 1.4 14,516 47,660 Antenna 4,175 -0.4 4,139 3,815TVK 5,335 -0.3 5,252 981Rába 785 -1.9 799 148,138Budapest Stock ExchangeExchange RatesFIXED MIDDLE RATE In forintsFeb 07, 2005 National Bank of HungaryEUR 1 244.15USD 1 190.09GBP 1 355.37CHF 1 156.71JPY 100 181.85CZK 1 8.16PLN 1 61.65Weather Tomorrow: sunnyHigh 1°C (34°F)Low -5°C (23°F)

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02 June 2013BusinessBank Tax Will Cost Otp Ft 9.6 BlnOTP Bank Rt announced yesterday which special bank tax each of its subsidiaries will choose to pay this year.Under an amendment passed by parliament last year, Hungary’s banks must opt to pay a 6% tax on interestrevenue or a 24% tax on profits, which is 8 percentage points over the regular corporate rate. OTP Bank and OTPFactoring Rt will pay the tax on interest revenue, and OTP Mortgage Bank Rt, OTP Home Savings Bank Rt,Merkantil Bank Rt, Merkantil Car Rt and real estate leasing company Merkantil Real Estate Leasing Rt will pay thehigher profit tax, OTP announced on the website of the Budapest Stock Exchange. OTP Bank estimates thespecial tax will cost it Ft 9.6 billion. Still, the bank confirmed yesterday its target of a 10% increase in consolidatednet profit this year. (Econews; NG 11)Vanreusel Chooses Mórahalom For PlantVanreusel Snacks, a Belgian maker of meat snacks, has picked Mórahalom over several other towns in south-eastern Hungary as the site to build a Ft 1 billion plant. Lucas Vanresuel, the company’s head, and ZoltánNógrádi, the mayor of Mórahalom, announced the decision yesterday. The plant, to be located in the city’sindustrial park, will employ 200 people. The plant will start turning out finished products from September,Vanreusel said. Initially the snack food will be exported to Germany, Spain and France. (Econews; NG 4, MH 12)Allianz Premiums Revenue Ft 153.2 BlnInsurance company Allianz Hungária Insurance Rt had revenue from premiums of Ft 153.2 billion in 2004, downFt 1.7 billion from a year before, chairman-CEO Mihály Patai told the press in Budapest yesterday. Life-insurancepremiums totaled Ft 19 billion in 2004, up Ft 2.3 billion from a year before. The non-life insurance segmentaccounted for the decline in revenue from premiums: in 2004 non-life insurance premiums totaled Ft 134.2 billion,down Ft 4 billion from a year before. (Econews; NG 4, Vg 18)Asahi Builds Glass Factory In TatabányaJapanese Asahi Glass Corp. has started recruitment for its new car glass factory. The first group of employeeswill soon start their three-month training in Japan and Italy, HR-director Mihály Gíber said. The long training periodis necessary because the technology used is new in Hungary. Construction of the plant was started end of 2004.The hall is already built, the machines will arrive in April and test production is set to be launched in the autumn.In total 200 employees will be hired; most of them engineers and technicians. The total investment is Ft 15 billion.(NG 1) G.R.Hernádvíz To Be LiquidatedLiquidation of Hernádvíz Kft, the first privatized Hungarian hydroelectric power plant has been started. Theprocess was initiated by the company’s owner, Béla Nagy. The power plant made losses in the previous twoyears because of the droughts, and last year a new dam section had to be built because of the flood of the river Hernád. Finally, the creditor bank withdrew the loan contract. The power plant was privatized in 1997 and thebuyer had a seven-year service obligation, which has now come to an end. (NG 5) G.R.Court Rules In Favour Of PólusYesterday, one-and-a-half years after Hungarian State Railway Company (MÁV) Rt sold its 82,000 sqm realestate complex near Ferdinánd Bridge to Irish off-shore company Markland Holdings Kft (now Ballymore Kft) for Ft 3.2 billion the law court has announced that the complex should have been sold to Pólus Holding FinancialInvestor Rt, an investment company lead by Sándor Demján. Pólus offered the lowest price but had a pre-purchase right which it bought from MÁV Multiszolg Kft for Ft 25 million. Alajos Dornbach told daily Népszabadságthat Pólus can exercise its prepurchase right . Ballymore Kft expects MÁV to submit an appeal to the court. If thepresent court decision is upheld, MÁV will have to pay back the Ft 3.2 million purchase price, and Ballymore canexpect MÁV to pay Ft 700 million- Ft 800 million for their activities on the site. (Nb 14) K.H.Fix Tv Remodels As Tv7TV channel Fix.Tv will be repositioned from March 1, taking on the new name of TV7, general manager of Zolczer Tv Kft, János Zolczer said. This company will deliver many of the TV7’s new programs. The channel, which isavailable through cable networks and terrestrial broadcasting to about 4 million people in and around Budapest,will still be operated by Mixolid Service Kft. The new strategy includes targeting of wider audience with mostlypublic service programs. Advertising time is planned to be sold mostly to medium-sized companies, whichconsider the nationwide TV channels too expensive, Zolczer added. (NG 7) G.R.

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Passnave Sale FloundersState Privatization and Holding (ÁPV) Rt declared the bids for the purchase of Passnave Kft, the last valuablebusiness item of MAHART Rt, unsuccessful. Consortium Masped Rt, the only bidder, already owns a 33% share. ÁPV Rt did not publish their reasons but press information suggests that the bidder offered less than the Ft 600million expected by ÁPV Rt. The company operating the Danube passanger ships will be offered for sale againwith the same conditions. The new owner will have to raise the company’s base capital (currently Ft 365.9million), modernize the 30-ship fleet, and guarantee to keep 220 staff and retain basic activities. (Nb 15) K.H.

Budget Flights Boosted Tourism In 2004While the number of tourists visiting Hungary rose steadily last year thanks to the 9 low-budget airlines which nowrun flights to Budapest, more and more travel agencies are offering complete low-cost tours dubbed as Fly & Bus,which could bring another welcome boost to the domestic tourism sector, market analysts said. Last year no-frillairlines flew some 400,000 tourists to Hungary bringing roughly Euro 108 million in extra revenues for the sector.Foreigners spent an average 2.7 days and spent Euro 100 a day in Hungary in 2004, both of which is expected togrow this year through these new Fly & Bus services. (NG 5) S.F.Zalakerámia Subsidiary Shares Change HandsZalakerámia Rt’s Romanian subsidiary Cesarom sold its 24.84% stake in Croatian Inker, Zalakerámia announcedyesterday. The Zalakerámia group had 93.79% total share in Inker before the transaction and only a part of thiswas owned by Cesarom. The block of shares was sold to a third party, outside the company-group, ZalakerámiaCEO Péter Márton said. The deal was made last year, so further details will not be published before release of thecompany’s preliminary report. (NG 11) G.R.Áak Issues Euro 1 Bln BondsState Debt Management (ÁAK) Rt mandated ABN Amro Bank and UBS Investment Bank to arrange the issue of Euro 1 billion treasury bonds, according to news portal hirado.hu. The bonds will have duration of 15 years andfixed rates. The pricing and issue of the bonds will occur in the second half of February. Hungary will issue bondsin total value of Euro 3 billion - Euro 3.5 billion this year, Finance Minister György Draskovics announced at theend of January. (NG 4) G.R.Hotel Occupancy Stable At 38.4% In JanuaryHungary’s hotels had an average occupancy rate of 38.4% in January, and guests spent 12.7% more nights inhotels than in the same month a year earlier, the Central Statistics Office (KSH) reported yesterday. In December 2004 Hungarian hotels had an average occupancy rate of 42.2%. The gross average room rate was Ft 13,367(Euro 54.75) in January, up from Ft 12,441 a year earlier. Gross revenue per available room was Ft 5,129 inJanuary, 7.6% more than a year earlier. Five-star hotels in Budapest were charging Ft 26,359 for a room.(Econews; NG 3, Vg 15)Likely Automotive Company Q4 ResultsVehicle manufacturer NABI Rt’s deficit reached $8.7 million in the last quarter of 2004, 70% more than theprevious year, says Péter Makray of Erste Bank Rt, making a $19.8 million annual deficit likely. NABI’s futuredepends on the exchange rate between the dollar and the forint, with dollar dependancy of 70%. Automotivecompany Rába Rt had a Ft 1.2 billion deficit in Q4 last year. Again, due to the weak dollar, its net result for thewhole year may prove to be positive, reaching Ft 550 million, says Péter Makray. Linamar Rt is expected to breakeven in the fourth quarter and produced a Ft 600 million profit over the year, according to analyst Mónika Tabányi.(Vg 17) K.H.EconomicsForeign Trade Deficit Euro 3.879 Bln In 2004

Hungary’s foreign trade deficit amounted to Euro 3.879 billion last year, down from Euro 4.167 billion in 2003,according to preliminary figures, the Central Statistics Office (KSH) reported yesterday. Exports rose 15.3% toEuro 43.943 billion, while imports increased 13.2% to Euro 47.822 billion. According to the first preliminaryfigures, the December deficit was Euro 257 million, compared to a Euro 377 million deficit in December 2003.KSH did not publish revised figures for November or details of the first eleven months, but preliminary December and full-year figures suggest that the office revised eleven-month imports downward by Euro 314 million, whilerevising exports upward by Euro 137 million. (Econews; NG 1, Nv 5, MH 11, Nb 15)

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Microloans Magnified To Ft 5 Mln A nationwide loan scheme available for SMEs with annual revenues not exceeding Ft 100 million could gain freshmomentum following an Economy Ministry decision yesterday pledging to raise the loan ceiling from Ft 2 million toFt 5 million and extend the term of the loans from 3 to 5 years. Under the revised program, SMEs will also be ableto use as much as half of their credit line on current asset expenditure. The decision is part of a new and wider program aimed at helping SMEs through preferential loans, grants and capital schemes. In addition to the regular loans, the Hungarian Development Bank (MFB) Rt will launch a Ft 2 billion credit program, under which SME’scan take out loans of up to Ft 10 million for 7 years. (MH 9) S.F.Iraq Mission To Cost Ft 3 Billion This Year Hungary’s participation in NATO’s training program in Iraq is estimated to cost Ft 3 billion this year, a governmentreport discussed by the parliamentary defense committee shows. Defense Ministry State Secretary Imre Ivancsiksaid Hungary, alongside the U.S. and the Netherlands, will be a leading nation in the training mission, and willsupply five of its command positions. The fifteen staff who will serve as training officers are currently trained inSzolnok. They will fly to Baghdad on February 26, Deputy Chief of Defense Staff László Braun said. The trainingof a 120-member security and guard unit, which is also expected to perform patrol tasks within the Green Zone inBaghdad, will be completed in Hungary by February 28, he added. (MTI)PoliticsCommittee Oks Nominees To Central BankParliament’s finance and budget committee approved all four of Prime Minister Ferenc Gyurcsány’s nominees to

the central bank’s rate-setting Monetary Council in four separate hearings yesterday. The four new members are:Csaba Csáki, an agricultural economics expert and former World Bank, OECD, and FAO advisor; Tamás Bánfi,who held a leading position at the National Bank of Hungary under its previous president and currently heads thefinance department at Corvinus University in Budapest; Péter Bihari, an economist who has focused onmacroeconomic and monetary issues; and Judit Neményi, a senior economist at a research institute and a former managing director of the central bank’s economic and research department. (MTI; MH 1, NG 1, Vg 5, Nv 5)Pm Wins Libel Case Against SzijjártóThe Municipal Court of Budapest yesterday ruled in favor of Prime Minister Ferenc Gyurcsány saying anopposition MP damaged his reputation by falsely alleging Gyurcsány abused his former office as sports minister.Gyurcsány took Fidesz MP Peter Szijjártó to court last year after Szijjártó suggested at a press conference inJanuary 2004 that the then sports minister Gyurcsány arranged various government contracts for Perfekt Rt, acompany Gyurcsány had formerly owned. Judge Árpád Pataki said Szijjártó maliciously suggested there hadbeen a link between Gyurcsány’s public office and Perfekt’s winning the contracts. Szijjártó’s legal counsel saidthey would appeal the ruling. (MTI; Nv 3, MH 6, Nb 7)Arab Diplomats Offended By Gyurcsány Remark Arab diplomats in Budapest are mulling an action after Prime Minister Ferenc Gyurcsány remarked that Saudi Arabian footballers were „terrorists”. „It is very difficult for us to digest this joke,” Lebanese ambassador toHungary Houssein Moussawi told the daily Magyar Nemzet yesterday. Speaking in a lighthearted tone at theSocialist Party’s 15th birthday party over the weekend, Gyurcsány praised Hungary’s footballers for „fighting toothand nail” against „Arab terrorists” at a friendly game against Saudi Arabia in Istanbul last Wednesday. Moussawisaid diplomats from Arab countries will hold a meeting to discuss what action to take. „We do not want to create acrisis for every unfortunate word, but one can understand that such comments offend us,” he said. (MTI; Nv 3, Nb6, Nv 9)Opposition Leader Uses National Tour To Test IdeasSounding out how people feel about yet-to-be-outlined proposals and nostalgia-tainted references aboutHungary’s communist past are the main ingredients of the new strategy behind the current „tour of the nation” byopposition Fidesz party chairman Viktor Orbán, a daily Népszabadság said yesterday. Orbán is scheduled to visitfive communities across Hungary before his traditional „state of the nation” address on February 16. Visiting asmall village in eastern Hungary on the first leg of his tour last Sunday, he raised the idea of village parliamentsand proposed benefits to university graduates moving to small communities. By eliciting debates among thepeople and in the media about such topics, Fidesz policymakers attempt to distill conclusions that could form thebackbone of the party’s strategy in the run up to the parliamentary elections next year, Népszabadság cited anunnamed source. (MTI; MH 2, Nb 6)

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DomesticStudy Of Possible Waste Storage Facility BátaapátiResearch to pinpoint the safest place for a Ft 27 billion underground radioactive waste storage facility to be set upnear Bátaapáti, southern Hungary, began yesterday, a senior executive at the Hungarian Geological Survey said.The facility, which will take 18 months to build, is to have a storage capacity of 24,000 cubic meters for low andmedium level radioactive waste, but it could be expanded later, Gábor Buday said. The envisaged size will besufficient to store the waste generated by Hungary’s single nuclear plant in Paks over the next 20 years, a period

recently targeted as an extended lifespan following a major overhaul. Hungarian Atomic Energy Authority chief József Ronaky earlier denied claims by Greenpeace activists that Hungary would store radioactive waste fromother countries. (MTI)Pms Confirm Joint Bid For 2012 Soccer ChampionshipThe prime ministers of both Hungary and Croatia confirmed their countries’ intentions to submit a joint bid for the2012 soccer European championships, during talks in Budapest yesterday. The championships „would giveHungary a chance to show Europe what it can do with an event like this, and it might also give a boost to thedomestic football scene,” Hungarian Prime Minister Ferenc Gyurcsány said. (MTI)Hospitals Initiate Cooperation ProjectHospitals in Vác, northern Hungary, and Sahy, southern Slovakia, have resolved to work together to providebetter services to patients under an agreement signed by the mayors of the two cities yesterday. Vác Mayor János Both said that it was more practical for people in many Hungarian villages along the border to go to Sahy

hospital for emergency care. At the same time, the better equipped Hungarian hospital could offer CT diagnostics,and kidney stone shattering to Slovaks. The health ministries of both countries support the idea, and the nationalhealth insurance services are currently ironing out the payment details, the mayor added. (MTI)StocksBux Close: 16,305.04 Change: +46.54 (+0.29%)Stock Closing price Daily change (%) Average price VolumeMOL 13,525 2.5 13,377 610,857Matáv 937 1.3 929 1,435,150OTP 6,087 1.5 6,063 897,402Richter 26,495 0.1 26,382 76,985Egis 14,700 1.4 14,516 47,660 Antenna 4,175 -0.4 4,139 3,815

TVK 5,335 -0.3 5,252 981Rába 785 -1.9 799 148,138Budapest Stock ExchangeExchange Rates

Fixed Middle Rate In Forints

Feb 08, 2005 National Bank of HungaryEUR 1 244.08USD 1 191.26GBP 1 355.19CHF 1 156.51JPY 100 181.15CZK 1 8.16PLN 1 61.51Weather

Tomorrow: P/Cloudy

High 2°C (35°F)Low -3°C (27°F)

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02 June 2013Business

Egis Q1 net more than doubles on exports

Egis Rt, Hungary's second-largest drug maker, said fiscal first-quarter profit more than doubled as sales to Russiasoared and customers in its home market stockpiled medicines before tax increases. Net income was ft 3.88

billion in the quarter ended Dec. 31, compared with ft 1.58 billion forint a year earlier, Budapest-based Egis saidtoday in a statement to the stock exchange. The shares rose to a 2 1/2-year high after the results beat analysts'estimate of ft 2.91 billion. Egis shares climbed 7.6 % this week as investors expected the company to benefit fromgrowth outside its home market. (Bloomberg; MH 12, NG 11, Vg 13)

Bp transport workers threaten strike

Unions representing just about all workers at the Budapest Transport Company (BKV) Rt are threatening a strikethat could easily paralyze the city from 4 a.m. to 1 p.m. on February 15, unless they reach a wage agreement withthe company by midnight of the previous day, union leaders said yesterday. The union representatives aredemanding a pay-rise of Ft 19,000 a month for every one of the 12,600 workers they represent instead of the Ft11,000 a month being offered by the company. The union demand corresponds to an 11 % wage hike, comparedto 6 % offered by BKV . BKV CEO Botond Aba said that the company would not meet the demand but was readyto negotiate to the very last minute to avoid a strike. (MTI; Nv 1, MH 1, NG 4,)

Elemér Terták new Hitelgarancia CEO

The board of Hitelgarancia Rt , a majority state-owned agency which provides guarantees for loans for SMEs, haselected former Finance Ministry state secretary Elemér Terták as CEO, Terták confirmed his appointment, whichhas not yet been announced, for MTI yesterday. Terták, together with István Vásárhelyi, the deputy chairman of the board at the State Privatization and Holding Company, were appointed to Hitelgarancia's board in the middleof January. Former Hitelgarancia Jolán Kismarti has resigned as CEO and board member effective Jan 31.(Econews; Nv 5, NG 5)

Pricing regulations cut Démász margin

New price regulations in force from the start of February were intended to keep the profits of Hungary's electricitydistributors level for the next four years, but Démász Rt, a power distributor for southern Hungary, has questionedthe integrity of the new rules. Although the rules are meant to freeze electricity distributors' price margins,Démász's margin will narrow as a result, Yves Autret, the CEO of Démász, said yesterday. The board will takeany necessary measures after it analyzes the regulations. Démász's CFO, Gábor Lehoczki, said the companycould partly offset the effects of the new regulations by reducing network losses and costs, but reducing networklosses means making more investments. (Econews; MH 12, NG 11,12, Vg 14)

Magyar Cetelem Ft 4 bln profit

Magyar Cetelem Bank Rt had pre-tax profit of Ft 4.7 billion in 2004, Ft 800 million more than in 2003, president

and CEO János Lendvai said yesterday. The bank had net profit of almost Ft 4 billion. Magyar Cetelem Bankgranted new loans of Ft 45.4 billion last year, including Ft 2 billion in consumer loans through hypermarket chain Auchan. The bank's stock of 600,000 loans came to Ft 60 billion at the end of the year. Magyar Cetelem's laid out26% more personal loans in 2004. The amount of credit taken out through the bank's Aura credit card rose 11%,and consumer loans rose 3% (Econews; NG 5, MH 12, Vg 14)

Zwack profit up 7.5% yr/yr

Zwack Unicum Rt, Hungary's best-known spirits maker, reported a 7.5% rise in consolidated pre-tax profit in2004, helped by stronger sales of its own products in Hungary. Zwack had consolidated pre-tax profit of Ft 2.87billion on gross sales of Ft 27.32 billion, according to its annual report, prepared according to InternationalFinancial Reporting Standards and published yesterday. Net sales, excluding excise tax fell 0.6% to 18.73 billion.Net sales of Zwack's own products in Hungary rose 2.1% to Ft 15.46 billion. Zwack had an operating profit of Ft2.62 billion on these products, up 2.2%. (Econews; NG 2, 12, MH 12, Vg 14)

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Malév adds 3 destinations

Malév Rt, Hungary's national airline, is starting flights to three new destinations - Göteborg, Oslo and Malaga - inits summer timetable. The Göteborg flight will start on March 29 and leave five times a week at the start, and sixtimes a week from June. Malév also flies to Stockholm. Malév will start flying to Oslo on May 2. The flight willleave three times a week at the start and four times weekly in summer. Malév will launch its scheduled flights toMalaga to meet seasonal summer demand. (Econews; Nv 5, NG 5, MH 12)

Synergon's profits surprises

The Synergon Group had a 2004 profit which surpassed the Ft 20 million expected by cautious experts and eventhe Ft 100 million promised by the management. The final figure was over Ft 156 million according to apreliminary report published today. During the past 4 years the company's total deficit was Ft 2.5 billion.Synergon, a company within The Synergon Group, provided 68% of the group's income and its Ft 177 millionproduction result is far above that of the other companies in the group. (NG 11-12) K.H.

ÁPV says NTK privatization OK

The Supervisory Board of State Privatization and Holding Rt (ÁPV) considered the privatization of NationalTextbook Publishing House Rt (NTK) to be according to the regulations. The inspection was started because of the harsh critics of the opposition on the privatization process. The company was sold for Ft 3.2 billion to LángHolding Rt last November. Three candidates qualified for the second round of the tender, but the applications of the two other bidders were deemed ineligible. The original bid from Láng Rt was Ft 3.9 billion; but has sincedecreased in the light of new information on NTK. (Nb 17) G.R.

Csepeli accepts 2 offers following tender

Csepeli Steelworks Rt's creditor committee accepted two offers after the latest tender was announced for someparts of the steelworks. This, according to Napi Gazdaság, is part of the company's liquidation procedure. Inaddition to some machines worth Ft 1 million, liquidation company Tizek Kft. managed to sell the 9.8 hectar sitein Mór. This section is still operating, though broke even last year, however its staff dropped had been cut back toa workforce of 25 people. Both the buyer and the price are undisclosed, the deal will be finished in March. Thetarget price was Ft 500mln which the actual price surpassed by 10 %, according to Tizek Kft. (NG 8) K.H.

8 banks fail PSzÁF inspection

Some eight banks failed the inspection of The State Financial Institutions Supervision (PSzÁF) about the usage of the index on total loan charges (THM). The new regulation on this index took effect on Jan 1. According to thisindex, THM must be applied to home loans, too and it must be displayed in advertisements and at the homepagesof the banks. The PSzÁF did not publish the names of the eight banks, but added that it will continue to check theadoption of the regulations on THM. (Nb 16) G.R.

HVBJ offers Ft 400 mln of 1-yr bonds

Mortgage bank HVB Rt will auction Ft 400 million of its HVBF 2006/2 one-year mortgage bonds on February 15.The bonds pay annual fixed interest of 11%. Interest is paid in one sum on February 16, 2006. The minimumpurchase is Ft 10,000. HVBJ will not accept over subscription. The benchmark yield of one-year governmentbonds was 7.89% on February 9. (Econews; NG 8)

Windel textile liquidates

Windel Textile Manufacturer Hungarian Kft faces liquidation along with parent company Hermann WindelGmbH&Co, says Márta Péter of liquidator company Vectigalis Rt. Windel Kft. is located in Mosonmagyaróvár, andmanufactures and dyes underwear. The other owner of the Hungarian company is German DEG Bank, also acreditor along with Hungarian Development Bank (MFB) Rt . The company owes the pair Ft 1billion of the their total debt of 1.9 billion. The liquidation procedure started last April. Tenders can be submitted until 26 February.(NG 8) K.H.

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Unsuccessful Euro Möbel auction

The Kecskemét furniture company Euro Möbel Furnishing Kft. Failed to offload it's property, estimated at Ft 400million, at auction yesterday. This was thought to be due to partly the old-fashioned technology, partly thelocation- being outside Budapest's scope, said István Rozsnyai of liquidation company Duna Libra Közgazdász.The date of the next auction is has not yet been arranged but he is sure that there will be no considerablereduction in price. The company has piled up a Ft 600- 800 million debt. (NG 8) KH

MOL pays Ft 1 mln fine

Hungarian Oil and Gas MOL Rt must pay a fine of Ft 1 million for the violation of share purchase reporting rules,the State Financial Institutions Supervision (PSzÁF) announced. MOL started a convertible share program for itsmanagement in October 2003 and the company did not supply PSzÁF with enough information on this in Januarythis year. PSzÁF was interested in how and when MOL management bought shares in July and October last year.The fine is low, because this is the first time MOL violated the rule on information access, PSzÁF said. (MH 13,Vg 13) M.K.

Economics

PM outlines aims of tax reform

Hungary's planned tax reform aims to make the country more competitive, boost investments, create new jobsand strengthen the economy, Prime Minister Ferenc Gyurcsány said at the first meeting of the Tax ReformCommittee. By achieving these goals, taxation in Hungary will be made more just, he added. "The intention andpurpose of the tax reform are not of a budgetary nature, it does not serve simply to ensure that our public dutiesare financed through budget and general government," Gyurcsány said. Gyurcsány said that Hungary was beingforced to change its tax system because of a competition between tax systems in the region. (Econews; MH 11,NG 3, Nb 17)

Pensioners get 1st of "bonus" pension

Pensioners will receive the first installment of their "thirteenth-month" pension in March, instead of May,government spokesman András Batiz said after yesterday. Hungary's pensioners have been getting an extraweek's worth of pension payments each year since 2003. This year they will get three weeks' extra pay. The goal- which will be met in 2006, an election year - is to put an extra month's pay in pensioners' pockets. The pensionrise will cost the budget Ft 157billion in 2005. (Econews; NG 3)

Gyurcsány and Demszky talk city plans

Prime Minister Ferenc Gyurcsány and Budapest mayor Gábor Demszky have agreed on the medium-rangedevelopment plan of Budapest between 2005-2013. The Podmaniczky plan, which bears the name of a Budapestmayor decades ago, will include the construction of Acquincum bridge between Dist. 3 and Dist. 4, theestablishment of underground line no. 5 and the new railway line connecting the city with Ferihegy airport. The

railway line will be an obligation of the company that wins Malév's privatization tender, Demszky earlier decidedwith heads of State Privatization and Holding ÁPV Rt. Demszky will discuss the Podmaniczky plan further with hiscabinet and then it must be approved by Budapest municipality. (Nv 1, Vg 5) M.K.

Slow distribution of EU subsidies

The distribution of EU-subsidized grain prices is going very slowly. The Union guarantees the price of Euro 101 -Euro 102 per ton; Hungarian farmers offered about 3.8 million tons of crops for sale; but only about 200,000 tonshave already been paid to them. The Hungarian representative of the EU is the Office for Agriculture and RuralDevelopment. The cause of the delay is the tardiness on behalf of the administration and the reception of thegrain. At the same time, storage yards for about 2.2 million tons of grain are required to handle the proposedamount. The difficulties caused the market price of grain to decrease to around Ft 19,000 per ton, far below theEU guaranteed price. (Nb 15) G.R.

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Disaster Prevention spends Ft 5 bln on development

The National Disaster Prevention Directorate (OKF) will spend Ft 5 billion on technical development and thepurchase of protection equipment, deputy director Tamás Kivágó announced. OKF will have a total Ft 13 billionthis year to fulfill its duties and to develop fire brigade stations, Kivágó said. OKF will pay special attention tosupplying people with information and warning systems, where they find dangerous factories, Kivágó said. (Nv 4)M.K.

Food industry in trouble

According to regular analyses by Euler Hermes Hungarian Demand Managing Kft, a series of liquidations can beexpected in Hungarian meat and canning and partly in dairy industry. The serious financial problems in foodindustry are due to the fact that investors with substantial capital were not interested in buying these type of companies in the early 1990s, says Euler Hermes executive András Kozma. Arvit Freezer Rt's Ft 200 millionworth property was tendered, but the liquidation company could sell only smaller units, says liqudator AttilaHorváth. A new tender will be announced next week, including a tender for the brand name, Arvit. (NG 9) KH

Fixed telephone lines drop by 38,000

Despite a rise by 8,000 in December, the number of fixed-line telephone connections declined by 38,000 last year to 3,564,000, the National Communications Authority (NHH) said yesterday. This means that 35.3% of the peoplein Hungary, or 70.9% of all Hungarian households, owned a fixed-line telephone. In the same period, the mobiletelephone penetration rate, or the number of subscribers per 100 people, rose from 78.5% to 86.4% as thenumber of mobile subscribers grew 9.9% to 8.73 million, NHH reported earlier. (MTI; Nv 5, NG 5)

Politics

PM in Ukraine to meet counterpart

Prime Minister Ferenc Gyurcsány is taking a visit to Ukraine today. Within this, he is going to meet new UkrainianPM Yulia Tymoshenko. They will sign an agreement on economic cooperation of the two countries. It is similar tothose made with other non-EU member neighbors of Hungary; but with special accents on direct investments andcross-border regional cooperation. Further agreements will be made on the cooperation of the cultural ministriesand between Budapest School of Economics and Kiev University of Economics. (Vg 4) G.R.

Political Capital to put agent list on net

Political research institute Political Capital plans to put the names of communist secret agents on the Internet atFriday 10 am, director Krisztián Szabados announced. The institute will only make a summary of those namesabout whom it became clear in the last 15 years that they were agents or at least cooperated with the regime,Szabados said. Political Capital aims to put pressure on Hungarian political life by this move to make the archivespublic and make the truth totally available. Data protection ombudsman Attila Péterfalvi said only those namescan me made public that have been revealed in a legally proper way. (Nv 4) M.K

Domestic

Three die in gas explosion

Three people died and at least nine were injured in a gas explosion in the central Hungarian village of Kunadacsyesterday morning. The explosion happened at a locksmith's workshop at 8 a.m. and was probably triggeredduring welding. The building where the locksmiths and joiners worked collapsed. Five ambulance helicopters andseveral ambulance cars rushed to the scene where relief staff were looking for more people under the debris.(MTI; Nv 12, Nb 20)

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Stockwatch

BUX Close: 16464.79 Change: +159.75 (+0.98%) Stock Closing price Daily change (%) Average price Volume MOL 13,620 0.9 13,556 209,032 Matáv 923 -1.8 923 2,430,175 OTP 6,351 2.8 6,288 864,634 Richter 26,000 0 25,933 32,628

Egis 15,600 6.2 15,209 139,079 Antenna 4,250 1.3 4,261 23,924 TVK 53,000 0.3 5,303 3,430 Rába 785 0 783 23,289

Exchange

EUR 1 244.27 USD 1 191.00 GBP 1 356.04 CHF 1 156.70 JPY 100 180.92 CZK 1 8.14 PLN 1 60.92

Weather

Tomorrow: snow

High 3°C (37°F)Low 0°C (32°F)

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02 June 2013BusinessGround broken for M6The laying of the M6 foundation-stone was held yesterday, where it was announced that several pipes, includingthe Adria oil pipeline, should be moved because of the construction. A consortium of Austrian and Germanconstruction companies won the tender to build the first section of the M6 between Érd and Dunaújváros. The 57-kilometer stretch would cost around Ft 85 billion to build. Work started last autumn and the stretch could befinished by May 2006. In related news, the number of business associations submitting request for exploringpermits to the Veszprém district mining inspectorate of the Mining Bureau Of Hungary has increased considerably just recently, unnamed sources reported. Applicants would mine clay, rubble and sand alongside the M6motorway, which is currently under construction. (NG 1) P.?.ÁPV picks bidders for Hungexpo tender The board of the State Privatization and Holding Company (ÁPV) decided yesterday to invite GL Events (aconsortium of TriGránit Development Rt and West End Investments and Commerce) and a consortium of CarionHolding Real Estate Management Services, ECE Project Management Budapest, V.H.V. Tourism and Catering,Commercial Services, the ESOP organization of Hungexpo and Airport Cargo Center Real Estate Developer and Agent to participate in the second round of a tender for a 77.01% stake in events organizer Hungexpo. The other consortium that bid in the first round of the tender included Expo Project, Expomedia Group Plc and Wallis RealEstate. (Econews; NG 4, Nv 6, MH 12, Vg 13)

T-Mobile sets up test 3G networkT-Mobile Hungary Rt, Hungary’s leading wireless services company, has put into operation a base network for testing third-generation (3G) mobile communications equipment, the company said yesterday. Ericsson is buildingT-Mobile’s 3G network in Hungary. The network will be available in the center of Budapest by the end of the year.T-Mobile bid Ft 17 billion for its 3G-frequency band in a state tender in December, 2004. (Econews; NG 5, Vg 13)Sky Alliance set to bid for MalévSky Alliance Rt, majorly owned by Malév pilots decided to enter the bid for the state-owned airline within a yet-to-be formed consortium, Zoltán Nagy, president of the supervisory board of Sky Alliance told daily Világgazdaság.Sky Alliance Rt decided in favor of the application after the State Privatization and Holding Company (ÁPV Rt)had dropped from tender criteria the requirement that bidders have to take over Malév’s Ft 36 billion debt. Sky Alliance Rt is currently in negotiations on forming a consortium with possible investors, Nagy added. (Vg 1) R.G.Freesoft increases net income by investingFreesoft Rt said yesterday it bolstered profit in 2004 by making twice as much money through investing than byselling its services. Net income was Ft 93.1 million last year. Freesoft didn’t provide detailed numbers for itsearnings in 2003, before it was created through a merger last year. Sales rose almost 30 % to Ft 826 million,Freesoft said. The company, which was set up by combining two rivals this year, plans to expand in Hungary. Italso intends to add to its units in Germany and Brazil. Freesoft used gains from investing its cash to boost profitas earnings from regular operations were less than expected. (Bloomberg; NG 11, MH 11, Vg 18)Pannon-Váltó to merge subsidiariesInvestment company Pannon-Váltó Rt plans to merge its subsidiaries into the parent company at its AGM,scheduled for March 14. The subsidiaries include Pannon Consulting Kft, Pannon-Consultline Kft, and PannonProperty Kft. In related news, Pannon-Váltó announced that its after-tax profit from last year amounted to Ft 160million, more than doubling the turnover from 2003. The company would pay a total of Ft 87.5 million in dividends,same as the previous year. (NG 12) P.?.Matáv gets 2 nd downgrade in 2 days Analysts at the investment bank Citigroup Smith Barney downgraded Hungarian telecom Matáv Rt to “Sell’yesterday. Citigroup Smith Barney cut its dividend forecast from 87 to 77 forints and predicted a fourth-quarter loss of Ft 5 billion as well as a 2% decline in revenues. Matáv paid dividends of Ft 70 last year. The incumbenttelecom company was scheduled to publish its Q4 figures at midnight yesterday. The bank lowered its 2004 EPSforecast 21% and cut its 2005 EPS forecast 11% to 59 forints. Citigroup Smith Barney’s new target price is Ft 890,33 forints lower than Matáv’s Wednesday close on the Budapest Stock Exchange. (MTI; NG 11)Waberer’s gets Zwack logistics contractZwack Unicum Rt, Hungary’s best-known spirits maker, has signed a three-year contract with Waberer’s HoldingRt, the biggest road haulage and logistics company in the CEE region, to ship and store its products. Waberer’swill ship over 30,000 tons of Zwack products to 1,700 Hungarian shops and catering businesses. Waberer’s hasspent Ft 1.5 billion to adapt its 15,000 sqm warehouse in the Budapest Intermodal Logistics Center to Zwack’srequirements. (Econews; NG 4, MH 12, Vg 15)

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Ft 9 bln sought from Duna Profit According to the liquidator of Duna Profit Real Estate Cooperative, the co-op’s 2,500 small investors aredemanding a total of Ft 9 billion compared to the Ft 4 billion-Ft 5 billion previously indicated by the cooperative’smanagement. The division manager of the liquidator Exerem Kft, Lajos Koczka, said liquidation could be finalizedby next year. Duna Profit mostly put the investors’ money in its fully owned companies. Small investors hope toget back around 30% of their assets. Real estate cooperatives specialize in collecting private funds for largespeculative property purchase or development projects, in exchange for a yield considerably higher than thatoffered by commercial banks. (Nv 1, NG 4) P.?.Lotto prices set to riseState-owned betting company Szerencsejáték Rt (SZJ Rt) will increase prices of 6 of its games, among them themost popular lottery Ötöslottó between March 13 and 17, László Somorai, the company’s spokesman announced. Along with the price hike winnings amounts will also increase. SZJ Rt usually raises prices in every two years.The company had Ft 110 billion in turnover and Ft 4.7 billion in net profit approximately last year. (Nb 15) R.G.Ft 20 bln waste process. site for GyöngyösEcolnet-WTP Rt, owned by Swiss Ecolnet AG is poised to build a waste-processing site in Gyöngyös, northernHungary with an investment of approximately Ft 20 billion, announced László Perekly, the company’s chief engineer. The site is planned with a capacity of processing 75.000-80.000 tons of non-hazardous waste into 6 Mwelectricity or 10 Mw heat annually, which the company wants to sell to companies in the local industrial park or tothe district heating company of Gyöngyös. The construction will start this spring and take one and a half years.(Vg 16) R.G.Croat Cent. Bank OKs Nova purchaseCroatia’s central bank has given the green light for OTP Bank Rt to acquire 95.59% of Croatian commercial bankNova Banka, MTI reported late on Wednesday. Hungarian financial market regulator PSzÁF approved the deal onFebruary 2. With the Croatian central bank approval issued, the transaction is expected to be closed by the end of February. The Croatian national bank gave approval for OTP to acquire a stake in excess of 75% in Nova Banka,the national bank said on its website on Wednesday, adding that OTP will purchase 93.63% of Nova Banka.However, OTP will in fact acquire 95.59% as disclosed earlier, as Nova Banka holds some 2% in treasury stock.(Econews; NG 11, Vg 17)EconomicsMOL Q4 profit down 4%Oil and Gas Company, MOL Rt, said its fourth quarter profit fell 4% as it set aside provisions for the expired debt

of bankrupt Russian oil producer OAO Yukos Oil Co. Net income in the fourth quarter was Ft 55.2 billion forintcompared with Ft 57.2 billion in the year- earlier period, MOL said. The company was expected to earn Ft 46.8billion forint in a Bloomberg News poll of eight analysts. MOL on Jan. 31 said it set aside Ft 35 billion forint inprovisions for payouts for altering employee compensation packages and for the expired debt of Yukos.(Bloomberg)Ex-bank presidents share views Ákos Péter Bod and György Surányi, former presidents of the central bank of Hungary (MNB), exchanged their views on the optimal range for the forint’s exchange rate at a business forum yesterday. Bod said the mostdesirable range for the forint would be 246-248 to the euro, even in the long run. Surányi believed the forint wasovervalued, which could damage the economy in the long term. The Hungarian economy only responds to larger rate cuts, at least of around 200 basis points, but is very sensitive to the forint’s exchange rate, Bod said. (MTI;NG 3, Vg 5, Nv 6, MH 11, Nb 16)Alternative estimates of grey economy at 20%-26% An Austrian study, published last November, claimed that the Hungarian grey economy had a 26% share of theGDP during 2002-2003, Mária Laczkó of the Hungarian Academy of Sciences said. István János Tóth of researchcompany Tárki Social Research Center Rt put the number around 20%, while Prime Minister Ferenc Gyurcsánytalked about a 30% share of the grey and black economy at a business breakfast of the Central EuropeanBusiness Centre (CEBC) yesterday. Just a week ago, Gyurcsány explained that should the government collectedthe missing Ft 3,000 billion from the grey economy, the local business tax could be scrapped, social insurancepayments could be lowered, and the highest VAT rate could be reduced to below 20%. The Hungarian greyeconomy had its hay days between 1991 and 1993, when its share of the GDP reached 33%. (NG 1) P.?.

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“Historical’ chance for tax policiesThe chance this government has to design a new long-term development and tax policies is a historicalopportunity, the economics minister said yesterday. Addressing the Hungarian Private Enterprise Club inBudapest, János Kóka said that both the development and the tax policies had to promote competitiveness. Hetold that on the tax front a “quick intervention package’ could be in front of parliament as early as this spring, andthat there would be ample time to redesign the value added tax (VAT), the local business tax, and the personalincome tax by year’s end. At the same time, he noted that oversized public administration systems were anobstacle to any significant tax cuts, a problem that could be addressed following the 2006 elections. (MTI; Nv 5,NG 8)Széles to launch TV channelThe president of the Confederation of Hungarian Employers and Industrialists (MGYOSz), Gábor Széles, willlaunch a business and financial news TV channel, Echo TV, this year, according to political weekly Heti Válasz.The former editor of news TV channel Hír TV, István Gulyás, is expected to be named CEO of Echo HungáriaTelevision Rt. Széles is ready to invest Ft 250 million at the start, and plans to set up the TV channel’sheadquarters at the properties of M?szertechnika Holding Rt. Test broadcasting is scheduled for the summer,before the channel would switch into full gear from September. Széles is chairman and CEO of IT firms VideotonHolding Rt and M?szertechnika, and also chairman of bus maker Ikarus Kft. (MH 2, NG 4) P.?.Profits up, trade stays same for HotelsHungary’s hotels had more guests in 2004, but they stayed for a shorter time. The number of guest nightsremained unchanged from a year earlier; still, hotel industry revenue was up. Some 6.47 million tourists, bothHungarians and foreigners, stayed in hotels in Hungary last year, up 3,7% from 2003, the Central Statistics Office(KSH) reported yesterday. The number of guest nights came to 18.43 million. Hotels recorded revenue of Ft 188billion in 2004, up 13%. Revenue from accommodation rose 11% and catering revenue rose 16%. Revenue fromother services rose 15%. About 3.2 million foreign tourists spent 10.3 million guest nights at hotels last year, up10% and 4%, respectively, from 2003. (Econews; NG 3, Nv 6, Vg 13, MH 13)Universities contest new par in Budget Act A new paragraph in the 2004 Budget Act that requires state organizations to pay a transaction fee on banktransfers to the State Treasury will erode colleges’ and universities’ funds by tens of millions of forints, schoolstold broadsheet Magyar Hírlap. The rule applies equally to ministries, government offices, museums, nationalparks and the like, but it is expected to hit the higher education sector worst since there is a Ft 250 minimum limitper transaction, which will add up to a massive sum as a result of colleges transferring student allowances, socialbenefits and other forms of pecuniary support to thousands of students several times a month, financial officers atuniversities said. (MH 7) P.P.PHARE cross border scheme signedThe agreements of the first program of the EU’s PHARE CBC Small Projects Fund, a subsidy scheme designedfor cross-border cooperation between regions were signed yesterday. The program involves municipalities, non-profit organizations, cultural and educational institutions of Serbia-Montenegro and Hungary. The total amount of subsidies awarded is Euro 631.000, Euro 465.000 of which was provided by the EU and the rest by governmentfunding. Projects to be realized within the program include the construction of a cross-border bicycle road andcultural cooperation between Csongrád, Bács-Kiskun counties and Vojvodina in Serbia. (Vg 4) R.G.Kovács warns VAT danger for new EU membersThe new EU members may suffer disadvantage in comparison with the EU-15 when the current derogationsallowing the new members to opt for lower VAT rates expire, EU tax commissioner László Kovács warned.Granted to May 2004’s EU entrants, the derogations in question will lose effect between 2007 and 2010, while

some of the EU-15 can freely apply lower VAT rates or even a 0% rate in some cases without a time limit, Kovácspointed out. This will create a discriminative situation if not remedied to comply with the principle of equality, theformer Hungarian Foreign Minister said. (MH 2) P.P.PoliticsFidesz: Gov’t wants to skimp Ft 4 bln on HealthFinance Minister Tibor Draskovics instructed the Health Ministry to save Ft 4 billion of hospitals’ budget fundingthis year, according to Gabriella Selmeczi, head of opposition leader Fidesz’s health issues committee. Children’shospitals should account for Ft 250 million of the Ft 4 billion saving target, Selmeczi claims. Political StateSecretary of the Health Ministry Mária Vojnik denied the charges, saying that the government was “not planning todeprive children of even one forint’, wire service MTI said. (Nv 5) P.P.

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DomesticMonk receives Person of Year awardBroadsheet Magyar Hírlap presented its 2004 Person of the Year Award to Csaba Böjte, a Franciscan monk whohas been operating children’s homes in Deva, Romania and nearby small towns for more than ten years. Although the award was founded by Jürg Marquard, the owner of former Magyar Hírlap proprietor the MarquardMedia Group, the newspaper decided to continue the tradition in spite of last fall’s ownership change. This year’snominees for the award included human rights lawyer Bea Bodrogi, President of the Association for Civil Rights

Balázs Dénes, Olympic gold medalist kayaker Natasa Janics, head of the Competition Office Zoltán Nagy, theater director Árpád Schilling, brain surgeon György Szeifert, and Director of the Hungarian Baptist Aid Sándor Szenczy. (MH 1) P.P.StocksBUX Close: 16451.53 Change: -13.26 ( -0.08%)Stock Closing price Daily change (%) Average price VolumeMOL 13,605 -0.1 13,666 507,917Matáv 893 -3.3 895 2,462,362OTP 6,400 0.8 6,414 1,212,990Richter 26,300 1.2 26,222 32,920Egis 15,905 2 16,108 134,453 Antenna 4,310 1.4 4,314 22452TVK 5,300 0 5,295 4,524Rába 780 -0.6 782 76,533Budapest Stock ExchangeExchange RatesFIXED MIDDLE RATE In forintsFeb 10, 2005 National Bank of HungaryEUR 1 244.44USD 1 191.04GBP 1 355.45CHF 1 157.03JPY 100 180.48

CZK 1 8.15PLN 1 67.07Weather Tomorrow: cloudyHigh 4°C (39°F)Low 4°C (39°F)

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02 June 2013Business

OTP Group net income up 68%

OTP Bank Group had consolidated after-tax profit of Ft 140 billion in 2004, 68% more than a year earlier, thebank's IFRS report says. The profit is above market expectations. OTP Bank's non-consolidated after-tax profit

soared 81.8% to Ft 127.5 billion. Consolidated total assets of the group rose 20.4% to Ft 4,166 billion. (Econews)

TVK net profit up 71% in 2004

Chemicals company TVK Rt reported its net profit increased 71% to Ft 9.02 billion in 2004, compared to theprevious year, according to its consolidated IFRS report, published on Friday. In Q4 alone, TVK had consolidatednet profit of Ft 2.32 billion, up 12% from a year earlier. Last year revenue rose 17% yr/yr to Ft 175.94 billion. Q4sales were up 20% yr/yr at Ft 47.83 billion. The parent company accounted for 93% of the rise in bothconsolidated sales and profit. Exports accounted for 45% of sales, down 1 percentage point from a year before.EBITDA rose 60% to Ft 19.14 billion, while operating profit almost trebled to Ft 12.21 billion. (Econews; NG 10)

MOL Q4 operating profit soars

Hungary's MOL Rt said fourth-quarter profit rose more than expected as refining margins grew and profitability ata gas unit improved. Operating profit more than doubled to Ft 59.5 billion in the fourth quarter, from Ft 26 billion ayear earlier, Budapest-based MOL said in an e-mail statement. Net income fell 4 % to Ft 55.2 billion because of provisions announced earlier. MOL benefited from a growing difference in the price of Brent crude and lower-quality Russian oil, which the company's refineries are capable of processing after upgrades in the past fiveyears. (Bloomberg; NG 7, Sat MH 13)

Michelin opts for Poland

Having concluded talks that lasted almost a year, French tire manufacturer Michelin preferred the Polish town of Olsztyn to Nyíregyháza, northeastern Hungary, as the location for a Euro 500 million greenfield investment, acompany spokesperson announced in Warsaw. The new manufacturing plant will be built in the industrial park of Olsztyn, northeastern Poland, creating 500 jobs in the center of a region with 29.4% unemployment. (NG 1) P.P.

Antenna posts Ft 11.6 bln net profit

Terrestrial broadcaster Antenna Hungária Rt recorded net profit of Ft 11.58 billion in 2004, up from net losses of Ft 1.08 billion a year earlier, according to the company's consolidated annual report, prepared using Hungarian Accounting Standards and published Friday. Almost all of Antenna Hungária's profit came from Ft 11.34 billion ingross financial revenue from the sale of its stake in Vodafone's Hungarian unit. Operating profit dropped 63.3%. Antenna Hungária had unconsolidated net profit of Ft 1.27 billion in 2004, and unconsolidated pre-tax profit of Ft1.52 billion. (Econews; NG 7)

Nabi Q4 loss widens on job-cut charges

Hungary's Nabi Bus Industries Rt, the third-largest supplier of city buses in the U.S., reported its fourth-quarter loss widened eightfold after taking charges to cover expenses related to job cuts and other cost-reductionmeasures. The loss totaled USD 45 million, compared with a USD 5.35 million loss a year earlier, according toBloomberg calculations from full- year results provided by the company in the Budapest Stock Exchange'sgazette. Sales rose 3.8 % to USD 103.47 million in the quarter. Nabi, which has plants in Leeds, England, and Anniston, Alabama, and two factories in Hungary, will cease production of a newly developed fiberglass model,known as Compobus, after meeting existing orders as it lost an exemption from the 'Buy American Act'.(Bloomberg; NG 9, MH 12)

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BSE shares to be traded at BSE

Budapest Stock Exchange (BSE) Rt will introduce the trading of its own shares this September, chairman of BSE Attila Szalay-Berzeviczy said. Specialists say BSE shares have a good chance to be traded well there. Theproposal on share issue must receive the approval of 75% of BSE's owners, Szalay-Berzeviczy said. Investorssaid that BSE was worth Ft 12 billion at the end of last year. After the share issue, BSE may be able to buy a53.4% stake of Keler Rt from the National Bank of Hungary. (BBJ 1) M.K.

K&H Bank profit up 135% in 2004

K&H Bank Rt had consolidated after-tax profit of Ft 18.991 billion in 2004, according to IFRS, up 135% from ayear before. K&H Bank had consolidated total assets of Ft 1,733billion, up 21% from the end of 2003. K&H Bankset aside provisions of Ft 3.7 billion last year for losses resulting from the scandal at K&H Equities in 2003. In2003, K&H Bank set aside provisions of Ft 8.6 billion, halving profits. Pre-tax profit was Ft 23.2 billion, up from Ft9.7 billion in 2003. Total revenue from banking operations rose 18.6% to Ft 98.7 billion, and operating profit rose38.1% to Ft 30.9 billion. Without provisioning against the K&H Equities losses, pre-tax profits would have risen47% to Ft 26.9 billion in 2004, and net profit would have come to Ft 22.1 billion, rising 45%, the bank noted.(Econews; Sat MH 11)

Borsodchem profit surges in Q4

Borsodchem Rt, the largest maker of PVC plastic in eastern Europe, said profit surged almost 18 times in thefourth quarter on rising demand for its main products. Net income soared to Ft 4.3 billion, compared with Ft 242million in the year-earlier period. Bloomberg News calculated quarterly figures by subtracting nine- month datafrom annual results reported today by Borsodchem. Borsodchem, based in Kazincbarcika, Hungary, benefitedfrom rising demand for its three main products: PVC, used in products from floor tiles to waterproof clothing, andMDI and TDI, two plastic foams used in construction and the auto industry. (Bloomberg; NG 9)

BKV workers set to strike

A strike by Budapest transport workers tomorrow appears increasingly probable after unions rejected a companywage offer of 7 % on Friday. Budapest Transport Company BKV Rt has said it could not afford the 11 % pay hikeunions are demanding, but upped its original 6 % offer by a percentage point. Unions responded with a thumbsdown. Meanwhile, BKV CEO Botond Aba said that a Budapest court had rejected their request that workers beforced to provide minimal services as a vital enterprise, so if the strike goes ahead, all public transport comes to ahalt. The unions have said their workers would walk off the job as of 4 a.m. on Tuesday and stay off until 1 p.m.(MTI; Nv 1, MH 6, Nb 7)

Electric earnings from Elm? and Émász

Regional power distributors Elm? Rt and Émász Rt, both majority owned by German electricity giant RWE Energy AG, justified investor expectations with their 2004 earnings reports this weekend. Elm?, active in Budapest and itsenvirons, posted nearly Ft 16 billion after-tax profit, which translates into Ft 2.630 return on each stock. Itsrevenues totaled Ft 200 billion, up on Ft 187 billion yr/yr. Émász, which distributes electricity in northern Hungarywith a higher rate of corporate clients than Elm? does, posted Ft 3.4 billion after-tax profit and Ft 1.110 return per stock. Both companies reported a decline in the volume of sales, which is currently typical in the entire the sector due to the ongoing process of market liberalization. Elm? sold 8,346 GWh of electricity, 17% less than in 2003,while Émász sales totaled 3,270 GWh, down 14% yr/yr. (NG 8) P.P.

MFB to pay dividend this year

Improving on its 2003 net income by 40%, state-owned Hungarian Development Bank (MFB) said it had Ft 11.79billion after-tax profit in 2004. The bank's interest rate income totaled Ft 42.24 billion, which marks substantialgrowth compared to 2003's Ft 38.48 billion. MFB's net assets stood at Ft 606.23 billion at the end of 2004, up13.5% on the previous annual report. While the bank did not pay a dividend on 2003 profit, the management isproposing to pay a total of Ft 6 billion to shareholders this time.(BBJ on line)

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Matáv posts Q4 loss on competition

Hungarian telco Matáv Rt, Eastern Europe's 2nd largest phone company, posted a fourth- quarter loss as risingsales at the mobile business failed to make up for falling fixed-line revenue. The loss was Ft 6.45 billion,compared with a profit of Ft 5.69 billion a year earlier, Matáv said in a statement on its Web site. (Bloomberg; SatMH 13, NG 7)

Three banks' interest rates decline

Following the National Bank of Hungary (MNB)'s decision to cut the base interest rate by 50 basis points threeweeks ago, several banks have cut the interest rates of corporate and retail accounts as of today. The current 9%base interest rate is by 3.5% less than a year ago. Inter-Európa Bank Rt has cut its retail account interest rate byhalf a per cent, while K&H Bank Rt will cut various retail interest rates by 0.25-1%. OTP Bank Rt has also declinedits retail interest rate by 0.5%. (Nv 14) M.K.

Rába returns to profit

Rába Rt, a Hungarian maker of axles, vehicle parts and military trucks, posted a profit last year after a loss in theprevious two years as the company was helped by gains from currency contracts. Net income was Ft 1.82 billioncompared with a loss of Ft 7.52 billion forint a year earlier, Gy?r, Hungary - based Rába said. Sales climbed 27percent to Ft 40.16 billion. Rába made currency-futures contracts for dollar-denominated transactions after theforint's gains weighed on earnings by cutting the forint value of sales in the U.S. and Europe to buyers such asDeere & Co. and Caterpillar Inc. (Bloomberg; NG 7, MH 12)

HVB more than doubles on '04

HVB Mortgage Bank Rt reported of a record high Ft 1.711 billion pre-tax profit in 2004, which is 2.5 times higher than the previous year. Its after taxes profit jumped up to Ft 1,489 billion. (MH 12) E.C.

Malév EGM approves new chairman and CEO

An EGM of state-owned Hungarian airline Malév Rt approved on Friday the appointment of Péter Honig to thepost of chairman of the board and of János Gonci to the post of CEO on Friday. Honig, 53, comes from steelworks Dunaferr Rt, where he worked as deputy-chairman and CEO. Gonci, 51, served on the board of airportoperator Budapest Airport Rt. He also owns Fairplane, a company which operates six-seater aircraft, aerobaticaircraft and gliders. Former chairman-CEO László Sándor stepped down in January for personal reasons.(Econews; Sat MH 12)

Zalakerámia closes with a loss

Tile manufacturer Zalakerámia Rt closed the year with Ft 18 billion sales revenue and Ft 340 million loss. Thelatter was the result of a daunting Ft 1.7 billion negative profit in Q4, due to amortization and one-off costs likethose of downsizing and ownership change. Austrian strategic investor Lasselsberger bought out the Hungarian

Foreign Trade Bank Rt (ÁÉB) in late September. (NG 8) P.P.

Fotex takes a 75% loss

In a business year marred by the closure of the Keravill and Fotexnet chains and several Azúr stores, Fotex Rt'sconsolidated sales revenue shrank by 75% in 2004 from the previous year's Ft 52 billion to Ft 38 billion. Thecompany posted a Ft 1.4 billion loss, which compares with Ft 1.5 billion profit last year. The only company withinthe group that produced good results was Keringatlan Kft, a real estate management company, which saw 54%revenue growth and reaped a healthy profit. (NG 8) P.P.

IEB profit up 18%

Publicly traded Inter-Európa Bank Rt posted Ft 2.1 billion consolidated after-tax profit in its preliminary 2004earnings report, up 18% yr/yr. The group's interest revenues rose from the previous year's Ft 14.2 billion to Ft

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18.6 billion. Consolidated net assets totaled Ft 206.4 billion at the end of the year, almost the same as the bank'sand 4.2% more than the 2003 figure. (NG 21) P.P.

Bank Gutmann establishes investment office

Vienna-based Bank Gutmann AG will open an investment consulting office in Budapest soon, the companyannounced. The bank already serves many Hungarian clients and wants to become Central Europe's leadingprivate bank, chairman Rudolf Stahl said. Gutmann's clients can be privately-owned Hungarian firms or wealthyindividuals, Stahl said. (BBJ 3) M.K.

FHB up 75%

FHB Rt consolidated after-tax profit reached Ft 7.044 billion in 2004, which is a 75% up on Ft 4.026 billion in2003. The bank's ownership structure changed significantly from 2003 to 2004 as the foreign investors' share hadgone up to 33.1% from the earlier 12.3% while the local investors' ratio had dropped to 3.3% from the earlier 13.7%. FHB's 2003 equity was Ft 11.5 billion, which increased by 61.1% to Ft 18.6 billion by 2004, and itincreased its cost/income ratio from 51.7% to 35.7%, which is an internationally significant cost-efficiencyincrease. (MH 14) E.C.

Linamar profits up despite falling sales

Linamar Hungary Rt, a maker of vehicle parts and farm machinery, reported declining sales in 2004, but profitsrose from Ft 297.67 million to Ft 541.49 million because of exchange rate gains. Operating profit fell from Ft 860.8million to Ft 251.78 million, according to the company's unconsolidated report published Friday. Sales fell slightlyfrom Ft 20.88 billion to Ft 20.71 billion, mainly because of a drop in domestic sales from Ft 5.3 billion to Ft 2.87billion. (Econews)

Economics

GKI projects slowing investment growth

Economic research company GKI forecasts GDP growth of 4% in 2004, according to its latest monthly report. Theforecast is unchanged from the previous report. Investment growth will slow from 10% in 2004 to 8% this year, inspite of big EU-funded infrastructure projects, according to GKI. These projects will boost growth in the buildingsector, which GKI expects to grow 8% in 2005, a percentage point more than in 2004. But the sector will also behurt as the number of new homes falls from last year's record level, perhaps to below 35,500, the number of newhomes built in 2003. (Econews; NG 3)

Project subsidies

The budget has secured Ft 27 billion for this year and next year to carry out the preparations necessary for projects starting in 2007, National Development Office (NFH) vice CEO Péter Heli announced. The amount willsuffice the preparation of 30 state and municipal mega-investments, which will enable these projects to later applyfor EU subsidies. The first round of construction is yet to be decided. The preparation of the projects that were to

use the EU structural fund's resources between 2004-2006 has been successful. (NV 5) E.C.

ÁAK set to sell more highway stickers

State Motorway Management (ÁAK) Rt aims to sell more highway stickers this year, despite the fact that priceshave gone up. ÁAK sold 8,6 million stickers thus turning over Ft 19 billion, this year they are planning on selling 9million tickets and expecting Ft 26 billion in revenues. (NV 5) E.C.

Politics

Hungarians stand divided over WWII battle

While anti-Fascist veterans and Defense Ministry officials gathered near the Buda Castle to remember Hungarianvolunteers who lost their lives in fighting the last remaining Nazi troops nested in the Buda Castle sixty years ago,

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an outlaw neo-Nazi group drew a crowd of a thousand to Budapest's Heroes' Square for its celebrating a breakoutattempt of the embattled Hitlerites. (MTI; Sat MH 3,)

Domestic

Eastern Euro Catholic leaders in Bp

Catholic church leaders from nine Central and Eastern European countries have started a meeting in Budapest onSaturday discussing their views on the position of Christianity in Europe. Hungarian bishop András Veres notedthat on the eastern part of the continent formerly persecuted churches had now to create those contacts with thestate that had been established many decades ago in free, democratic countries in Western Europe. (MTI)

Stockwatch

BUX Close: 16390.18 Change: -61.35, (-0.37%) Stock Closing price Daily change (%) Average price Volume MOL 13,515 -0.7 13,532 846,528 Matáv 902 1 901 1,482,424 OTP 6,355 -0.7 6,395 600,178 Richter 26,300 0 26,486 28,225 Egis 15,895 -0.1 15,848 22,964 Antenna 4,270 -0.9 4,274 6,905 TVK 5,150 -2.8 5,240 11,824 Rába 780 0 778 32,326

Exchange

Feb 11, 2005 National Bank of Hungary

EUR 1 244.47 USD 1 190.05

GBP 1 355.31 CHF 1 157.11 JPY 100 179.96 CZK 1 8.14 PLN 1 60.59

Weather

Tomorrow: snow

High 4°C (39°F)Low 1°C (33°F)



7days, 2005. február 14

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