7days, 2005. január 31

7/28/2019 7Days, 2005. január 31.

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

24 January 2005

BusinessDIFA buys real estate stakesPannonplast issues profit warningStyl goes into liquidationSóstó finances spaForrás increases stake in KNB Fuente

Budapest Bank optimistic for 2005OTP subsidiary sets up fund managementPSzÁF fines Concorde Ft 1 mlnBombardier MÁV closes fine year Sofitel closes good 2004MOL confirms Yukos is no longer delivering oilOlimpia Group builds 2,000 apartments in BudapestHunguest to start rebuilding of Montenegrin hotels25 bidders for auctioned Eurotours propertyeconet.hu shareholders to pay rest of capital raiseGárdony develops tourism

EconomicsSzDSz ministers say Budapest to get Euro 2 blnElectricity rises 9.8%Tax system blueprint has less red tapeMinisters to ask for EU intervention on grain marketDist. 12 to build sports complex

PoliticsProsecutor’s Office absolves Draskovics

DomesticPower plant remains safe despite fireChinese, Hungarian human smugglers sentenced

25 January 2005

BusinessBourse to be publicly tradedArtesyn expands in TatabányaGriffsoft revenues Ft 119 mln in 2004Jarai: base rate nears dangerous level

New shopping centers nr. BudapestZalakerámia accepts 2003 reportDanube’s Timber gains parquet factoryMotorcycle sales grow

Öko-Pannon raises „green dot” license fees 23%Laptop sales leap in 2004Post raises prices and hires Porsche vehiclesK&H to offer new funds starting January 31Gresham, Fiala, Nagygyörgy win real estate awardsRethmann waste management renamed RemondisSlovakia may impose further fine on MOL100,000 businesses pay „simplified” business tax

EconomicsFt 15.4 grants given for regional developmentStudy puts Hungary at top of European ranking DROP??

Retail sales volume up adjusted 3.7% yr/yr in NovOffice space openings slowed in 2004Forint almost unchanged after 50bp interest rate cut

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PoliticsEP to launch Roma forum today

DomesticEU subsidies pour into renovationEU waste smugglers could face prison terms

26 January 2005

Business

GSM termination fees to drop 10%MÁV and E.On sign power dealFreeSoft wins upgrading contractMOL eyes Croation INATVK shuts down Austrian subsidiaryProfits expected by blue chipsGVH fines T-Mobile Ft 40 mlnParmalat expects to break even in 2005Hunguest sells hotels at homeBékéscsaba Poultry lays of more workersPécs Brewery had flat year

Komárom enjoys extra Ft 3 blnLambacher moves production to HungaryMotorways steer toward PPP financingSlag figures in motorway construction plansÉvgyűrűk pension f?nd reports 15.74% yield in 2004Budapest Airport reports 1 mln passenger increaseISPA projects poorly planned - audit office

EconomicsParliament approves Ft 8 billion for road-buildingFarm production up, prices down, says minister

PoliticsConstitutional amendment needed for spy lawSlovakia opposes expansion of Visegrád groupKovács will defend EVA tax

DomesticPopulation decline slows in Jan-Nov 2004Hungary presented with first Gripen

27 January 2005

BusinessPlaza sells four malls to DawnayPogo may sell Hungarian fields

Bakers protest against low pricesEgis to pay Ft 120/share dividendBAC spins off real estate businessTriGránit to invest Euro 1 Bln in Poland3 short-listed for CsF assetsAxis - better than expected resultsProportzia opens Bp plastic surgery clinicEBRD to buy into Uniqa insuranceKirchoff kicks off operationsMalév reports record online sales in JanuaryPér airport expects 50% traffic increase

AstraZeneca’s sales fall slightlyEconomics

Járai: euro in 2010 can still be met

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Economy set to slow upLegal tobacco market shrinksGyurcsány seeks weaker forintBanks begin subsidy homeloansOffice space in Budapest stableQuestionable homepagesGov’t proposes Ft 1.2 bln for sports

PoliticsMPs to elect new president in JuneDióssy becomes new Economy state secretary

DomesticCardinal Erd? appointed to CongregationKirály Street opened

28 January 2005

BusinessSkoglund Holding, SASAD to mergeTsunami costs travel co's Ft 500 mlnBUX finishes with new all-time high

Suzuki Wagon R+ to be relocatedTörley buys WaltonAustrians to build adventure center Mondi Business Paper invests Euro 8 mlnMÁV fleeced to tune of Ft 300 mlnBÉT opens for EU companiesVatera business surgesKravtex develop new 12 meter busBorsodchem and Dynea double formaldehydeBSE halts trading for half an hour Szeged landfill phase one finished

EconomicsUnemployment rate at 6.3% in Oct-DecWorld Bank criticizes Hungary10 yr dollar bond launchedCity rehabilitation launchedPayments to farmers to grow to 60% of EU-15Environmental plan gets Ft 3.4 blnBonus tax surprise for KomáromFew wind power plants, many permits

Politics

Szili: Holocaust biggest moral failureSzDSz calls for exposing agentsDomestic

Neo-Nazi activist expelled from uni

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24 January 2005Business

DIFA buys real estate stakesHamburg-based fund management giant Deutsche Immobilien Fonds AG (DIFA) has recently acquired a 49%stake in the Infopark office complex, Airport Business Park and M1 Business Park from Europolis Real EstateManagement GmbH, in addition to prime office and logistics space in the Czech Republic, Europolis said. As aresult of the deal, which marks DIFA’s debut as an international investor in the logistics sector, the Hungarian and

Czech investments of the fund are now totaling Euro 180 million. Europolis will retain its 51% stake in andcontinue to manage the properties, of which Infopark is located in Dist. 11, whereas the two logistics centers arein Budapest’s satellite towns southeast and southwest of the city, respectively. (NG 13) P.P.

Pannonplast issues profit warningPublicly traded plastic manufacturer Pannonplast Rt expects to close the 2004 business year with nearly Ft 2billion consolidated negative profit, the company announced in a profit warning, which came unexpectedly after anoptimistic press conference in mid-January. Pannonplast reported an estimated Ft 800 million IFRS loss for Q4,citing high raw material prices and one-off costs dating back to earlier months that did not surface until recently,which prompted the management to initiate an investigation. The company is mulling plans to sell its 50% stake inPannonpipe Kft to minimize losses and hopes to save Ft 380 million through the recent restructuring this year.(NG 7) P.P.

Styl goes into liquidation

Creditors filed for the liquidation of clothes maker Styl Ruhagyár Rt at the Vas County Court on Friday, promptingStyl’s creditor to terminate a loan contract with the clothes maker. Following the news the Budapest StockExchange suspended trading in Styl shares. Styl had doubtful receivables of Ft 130 million after some of itsbuyers went bust, a Styl statement released earlier on Friday said. Styl now expects its sales to drop by 15% in2005, the statement said. The statement blamed the bankruptcy on the general crisis overhanging Hungary’s lightindustry. „[Styl] financed the necessary job cuts from its own resources ... but is no longer capable of financingfurther restructuring,” the statement said. (Econews; Vg 3, NG 7)

Sóstó finances spaSóstó-Spas Rt is to finance its latest Ft 1.7 billion theme spa and health tourism center investment inNyíregyháza-Sóstógyógyfürdo by issuing forex bonds, said Sóstó CEO Tamás Belus. The CHF 9.5 millionamount will be privately issued by OTP Bank Rt. The contractual obligations and the liabilities of the ten-year maturity bonds are guaranteed by the Nyíregyháza municipality, the founder of the company. The funds gainedwill be divided between developing the existing Sóstó water park and establishing a shopping area around thehealth center, said Belus. (Nv 5, MH 12) E.C.Forrás increases stake in KNB Fuente Asset management company Forrás Rt, which is listed on the Budapest Stock Exchange (BÉT), has increased itsstake in KNB-Fuente Kft from 0.32% to 96.47%, the company said on Friday. KNB-Fuente’s registered capital isFt 156 million. At the same time, Forrás subsidiary Centrál Launderettes Rt acquired a 49.98% stake in Ganz PortRt, which has Ft 280 million in equity capital. (NG 7) P.P.

Budapest Bank optimistic for 2005Budapest Bank Rt’s consolidated pre-tax profit increased 30% in 2004, and its total assets rose 20%, according tothe bank’s preliminary figures, prepared using Hungarian Accounting Standards (HAS). Retail lending was themain factor behind the strong figures. Budapest Bank and its subsidiaries recorded pre-tax profit of Ft 10.75 billionin 2003, according to audited HAS figures, and total assets came to Ft 390.6 billion, CEO Mark Arnold told journalists. GE Capital, which owns Budapest Bank, expects a 20% increase in profit each year. Budapest Bank’s

nine-month stock of retail loans increased 44% yr/yr in 2004. The bank had issued 125,000 credit cards by earlyDecember, far more than planned. (Econews)

OTP subsidiary sets up fund managementOTP Bank Rt’s fully owned subsidiary OTP Banka Slovensko has established a fund management subsidiary, theparent company announced. OTP Asset Management, správ. spol. a.s., was registered with 41 million Slovakkorunas in equity capital as of Jan. 14. (NG 8) P.P.

PSzÁF fines Concorde Ft 1 mlnStockbroking firm Concorde Securities Rt has been fined for Ft 1 million by the State Financial InstitutionsSupervision (PSzÁF) for failing to comply with various investment, accounting and reporting regulations. Theirregularities discovered by the financial watchdog concerned the separation of different units within thebrokerage, data protection and stockbrokers’ reporting obligations to PSzÁF, among others. (NG 7) P.P.

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Bombardier MÁV closes fine year Dunakeszi-based company Bombardier MÁV Rt closed its most successful year last year in terms of both revenueand profit, said CEO József Dian to Napi Gazdaság. The firm’s revenue was Ft 23 billion, Ft 18 of which camefrom exports. For this year, Bombardier plans „only” a Ft 14 billion income, because the orders which contribute tothe outstanding results will soon be completed. The company has registered capital of Ft 772 million, andcurrently employs 800 workers. If the company applies successfully for the MÁV suburban train procurementtender, it could increase its staff by an extra 350 people. Company owners are planning to transform theDunakeszi site into a Central European base. (NG 4) E.C.

Sofitel closes good 2004Sofitel Atrium Budapest has closed a successful year in 2004. After the growth in conference tourism followed bythe EU accession, the 5-star hotel reached the highest occupancy rate in the last five years, bringing their highestincome yet, with September being the best month. The most guest nights were spent by English, American,German, and French tourists. Hotel operator Accor-Pannonia Hotels Rt is to spend another Euro 10 million onhotel improvement in the next 3 years. (Nv 5) E.C.

MOL confirms Yukos is no longer delivering oilHungarian oil company MOL Rt confirmed reports to MTI that Petroval, the Geneva-based main trade unit of itsRussian peer Yukos, has stopped deliveries indefinitely. Reuters reported on Thursday that Petroval was unableto meet some of its long-term oil delivery obligations citing force majeure. MOL said it was prepared for the eventand is looking for other Russian suppliers to fill the gap left by Yukos. Changing suppliers will not affect prices,because MOL buys oil from Russia at market prices, MOL said. Petroval’s move is thought to affect 60% of MOL’s

imports. (Econews)Olimpia Group builds 2,000 apartments in BudapestIsraeli real estate developer Olimpia Group has been building 2,000 apartments in Budapest, managing director of Palace Kft Levente Laki said. Olimpia has commissioned Palace to sell the flats. Olimpia is now constructingZöld Liget Apartment House in Dist. 9 with 428 flats for Ft 5.4 billion and has just begun the construction of other blocks near Dist. 14, Thököly út and Dist. 11 Kosztolányi Dezso tér with 324 and 472 flats respectively. Olimpiawill further construct apartment houses in Dist. 11 Ibrahim utca and Bocskai út. Flats in Zöld Liget cost less thanFt 300,000/ sq.m., while the flats in Buda cost Ft 330,000/ sqm. (NG 19) M.K.

Hunguest to start rebuilding of Montenegrin hotelsHunguest Hotels Rt will soon start the reconstruction of its two hotels on the beach of Montenegro, CEO IstvánHülvely said. The purchase deal was signed last May, but the Serbian land registry office only registered theproperty under Hunguest’s name a few weeks ago. The reconstruction is expected to start in March and the

company hopes to open them by the main season this year, Hülvely said. Hunguest currently owns 31 hotels inHungary; its only properties abroad are the Montenegrin one and a franchise hotel in Romania. (Vg 7) M.K.

25 bidders for auctioned Eurotours propertyThe property of Eurotours travel agency, which went bankrupt last summer, will be soon auctioned, liquidator Kerszi Rt announced. Kerszi announced the date of the auction and 25 bidders applied by deadline. Eurotoursused to own real estate, buses, and other vehicles, but no bidder wishes to buy all of its 14 buses. Kerszi expectsFt 100 million from the auction, but this will not cover all of Eurotours’ debt of Ft 300 million. (Vg 8) M.K.

econet.hu shareholders to pay rest of capital raiseShareholders of IT company econet.hu Rt who participated in a 2004 capital raise will have to pay the remaining70% of the subscribed value by February 15, according to a board decision made on January 19 and postedFriday on the website of the Budapest Stock Exchange. The money is due on a Ft 1.5 billion private placement of new shares which was decided on by the company’s AGM last April. The private placement raised the registered

capital of econet.hu to Ft 2.85 million by last September. (Econews; NG 7)New power plant installed in Dist. 10Kobányahő Kft has launched the operation of a new power plant in Budapest’s Dist. 10 recently, managingdirector Tamás Varga said. The plant produces both heat and power and provides mainly large consumers in Dist.10, such as pharmaceutical company Richter Gedeon Rt, state railways MÁV Rt and city transport company BKVRt. Budapest Electricity Works Rt (Elmuű) buys 117,000 MW energy per year from Kobányaho. The new plantwas constructed with an investment of Ft 3 billion. Kobányaho is owned by Prometeus Rt and Budapest Power Plant Rt. (Vg 7) M.K.

Gárdony develops tourismLast December, the government decided to hand over free an area of over 9 acres to the Gárdony municipality aspart of a tourism development program. The real estate investment, worth several billion, is to kick off this year. According to municipality spokeswoman Anett Bisztricz, the contract needs to be signed before the end of July.The project will not only include the development of the Gárdony spa, but will comprise the construction of aholiday resort. The municipality also intends to entice enterpreneurial capital into the multiphase investment. (NG18) E.C.

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Economics

SzDSz ministers say Budapest to get Euro 2 blnBudapest’s mayor and four government ministers from the mayor’s liberal Alliance of Free Democrats (SzDSz)party on Sunday agreed on a program of action which will pump Ft 500 billion (approx Euro 2 billion) in upgradesinto the city during the next two years. Each of the four ministers focused on projects within their own portfolios,with the Economy Minister János Koka offering special loans to SMEs and setting up an operative programexpected to create thousands of jobs. He also predicted that a new Danube bridge, part of a beltway around thecity, would be ready by 2007. (MTI; Nv 4, MH 6)

Electricity rises 9.8% A 9.8% average electricity price hike and a new system of tariffs for individual consumers will come into effect asof Feb. 1. In future, 2.5 million private consumers will pay 4.3 % more, an increase less than the rate of inflation,as long as they do nut exceed an annual 1,320 kWh ceiling. Above this threshold, users will be subject to a 6.8%rise, matching 2004 inflation. Business users and government institutions will pay 12% more. Minister of Economic Affairs and Transport Janos Koka said at a press conference on Friday that „the subsidy built into thenew electricity price system will affect 51.3% of the population, that is 2.5m households.” (BBJ, Econews; NG 3)

Tax system blueprint has less red tapeThe government is working on the designs of a new tax system to cover the next 3-5 years, Finance Minister Tibor Draskovics and Economics Minister János Koka told the media on Friday. The objective is to introduce asimpler system in which more income becomes taxable but the tax rate is reduced and the entire system issimplified, the finance minister said. Draskovics said that the highest, 25% VAT rate would be cut by at least five

percentage points, the 15% middle rate would be eliminated and the lowest 5% rate, used for medications, wouldremain. The main purpose of this reform is to bring down taxes, the economics minister said, adding that red tapealso had to be cut back. „We have to cut the top VAT rate if we want our people to do their shopping in Hungary,”said Draskovics. (MTI; NG 1, MH 11)

Ministers to ask for EU intervention on grain market Agriculture ministers from Hungary, Austria, the Czech Republic and Slovakia agreed to ask the EU for extraordinary market intervention to reduce excessive grain stocks in the region, the Hungarian minister said onFriday. The four countries will request export subsidies from the EU for the sale of 2 million tons of grain on thirdmarkets, Imre Németh said. „Stocks are extremely high, and we are in negotiations with the EU to receivesubsidies not only for the intervention stocks but also for free stocks,” he said. Michael Mann, EuropeanCommission spokesman, said the EU will take bids for wheat export subsidies. (MTI, Bloomberg; NG 1, 2)

Dist. 12 to build sports complex

The municipality of Dist 12 plans to build a sports complex in Csörsz utca, near MOM Park, for Ft 2.5 billion,mayor György Mitnyan announced. The ultimate plans will be prepared by the end of January and constructionworks may start in June, Mitnyan said. The 18,000 sqm facility will have a swimming pool, a squash, tennis and ahandball court as well as restaurants and shops. The site is owned by the municipality and the sports complex willbe operated by a separate company paying a rental fee to the local council, Mitnyan said. (Vg 5) M.K.

Politics

Prosecutor’s Office absolves DraskovicsThe Prosecutor’s Office has said allegations against Finance Minister Tibor Draskovics that he delayed VATrefunds to businesses at the end of last year in order to narrow the deficit are unfounded. A spokesperson for theProsecutor’s Office said announced on Friday that on the basis of data and documents relating to the allegations,the office established that an offence was not committed. As a result, the office has closed the investigation.(Econews)

Domestic

Power plant remains safe despite fireSafety at Hungary’s sole nuclear power plant, in Paks, southern Hungry, was not compromised by a minor firethat broke out in a stairwell, CEO József Kovács told reporters on Friday. The CEO said the fire had occurred onThursday night, in a stairwell in Block Two designated as a smoking area, and which was also being used to storeconstruction materials for roof insulation. A smoldering cigarette set the building materials on fire, causing muchsmoke but less than Euro 500 damage. „The fire had no impact on the plant’s technology or safety systems, andwill not slow down the overhaul currently underway in the block,” he said, adding that no one had been hurt andthat the damage was negligible. (MTI)

Chinese, Hungarian human smugglers sentenced A Hungarian county court on Friday sentenced a group of five Chinese and nine Hungarian human smugglers tobetween one and five years in prison. The group smuggled people from China to Hungary via Russia, and then to

western Europe in 2002 and 2003. The head of the group, a 21-year-old Chinese woman, paid U.S.D 2,000 to her associates for each person smuggled across the borders. The convicts may appeal the ruling. (MTI)

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Bourse to be publicly tradedThe Budapest Stock Exchange (BÉT) will become a publicly traded company and will increase its capital byseveral billion forints this year, pending the approval of the owners in April, BÉT president Attila Szalay-Berzeviczy announced. BÉT shares are expected to be traded publicly from this autumn. The bourse is alsoeyeing Hungary’s central depository and clearing house Keler Rt, and plans to buy a 20% share together with the

Budapest Commodity Exchange (BÁT), while purchasing an additional 53% share from the National Bank of Hungary (MNB). (NG 11) P.Ö.

Artesyn expands in TatabányaTatabánya-based Artesyn Hungary Electronics Kft, a manufacturer of power supplies to hardware andtelecommunications equipment producers, will once again increase its production capacity through a Ft 200million-Ft 300 million investment, according to unnamed sources. The American-owned firm had $28 million inrevenues in 2004, and expects $50 million for this year, as well as hiring new staff. Artesyn just recentlycompleted a Ft 500 million development project to increase capacity. (NG 5) P.Ö.

Griffsoft revenues Ft 119 mln in 2004Griffsoft Rt, an IT developer for corporate governance solutions, said its 2004 revenues jumped Ft 119 million toFt 812 million despite foiled attempts to push ahead with its expansion strategy on the back of Hungary EU entry.Griffsoft chairman György Szájbély said SME’s are getting far less EU funds than they need, while application

procedures often get bogged down due to red tape. These, in turn, stymied Griffsoft’s growth last year, Szájbélyadded. (MH 16) S.F.

Jarai: base rate nears dangerous levelWith yesterday’s 50 bp cut, the interest rate premium (paid by Hungary) approached a level which requires extracaution, National Bank of Hungary president Zsigmond Járai told journalists yesterday. Járai said he could notforecast at present whether there would or would not be room for another rate cut in February. Járai said therewere several arguments for a smaller rate cut at the Monday Monetary Council meeting but „in the end thedecision was that, at present, it was still possible to make a bigger rate cut”, Járai said. While acknowledging thebetter-than-expected developments in terms of inflation, wages and growth, Járai said that a big improvement ininvestors’ sentiment experienced in the past six months has stalled. The cause is probably the strengthening of the dollar, however, it still requires attention, he said. (Econews; Nb 1, NG 1, Nv 1, MH 11, Vg 1)

New shopping centers nr. Budapest

Center Invest Kft, an Austrian-owned developer of small shopping centers, has broken ground on two newprojects in Érd, southwest of Budapest, and Veszprém, northwestern Hungary, the company said. The Hungariansubsidiary of Austrian Center Invest GmbH, the developer has completed three similar projects in Budapest and isplanning to build another six in the country in addition to the two in progress, which are scheduled for completionin August. The shopping facility in Érd will consist of 11,500 sqm of net retail space and a parking ramp for 550cars to be built on top of a new bus station next to it, while the Veszprém center will have 14,300 sqm retail spaceand 700 parking spaces. (Monday’s NG 13) P.P.

Zalakerámia accepts 2003 report After a year’s delay, ceramics producer company Zalakerámia Rt finally accepted its 2003 report in the company’sextraordinary board meeting yesterday. According to the report now accepted, the company’s own capital was Ft20.6 billion in 2003, it had Ft 19 billion in net turnover in the same year and had profits worth Ft 1.4 billion. Thedelay was due to a disagreement between former and present majority owners ÁÉB Rt bank and theLasselsberger group. (Vg 13) R.G.

Danube’s Timber gains parquet factoryCastro (et) Filhos L.d.a., one of Portugal’s biggest building material retailer and furniture manufacturers, is mullinga several hundred million forints green field investment in Nagyatád, southern Hungary, according to unnamedsources. The company’s subsidiary, Danube’s Timber Kft, is expected to gain a new parquet factory and alogistics center next to the current woodworking plant. Representatives of the Portuguese company and the localmunicipality confirmed the news report, but refused to get into details. The investment will result in the hiring of anadditional 40 people from the area. (NG 4) P.Ö.

Motorcycle sales growOver 14,800 new motorcycles were sold in Hungary last year, up by 19% from 2003, unnamed sources reported.Dealers had expected to sell around 14,500 motorcycles. The top three brands consisted of Japanese giantsSuzuki, Yamaha, and Honda, of which two thirds of the total were sold. However, the fine results for the newmodels spelt bad news for dealers of used motorcycles, who were forced to decrease their prices in order to meet

expectations. (NG 1) P.Ö.

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Economics

Ft 15.4 grants given for regional developmentThis year Ft 9 billion will be handed out to Hungary’s 75 economic sub-regions that came into being last year,while another Ft 6.4 billion will go toward financing those due to be created this year, said István Jauernik, agovernment official of the MSzP socialist party. This brings the total amount of grants disbursed to sub-regionsunder the regional development program this year to Ft 15.4 billion as against Ft 7.7 billion in 2004, he said. Applications for the grants must be submitted by Feb. 1. (Nv 4) S.F.

Study puts Hungary at top of European ranking DROP??Hungary outranks the former Eastern bloc in terms of the amount of retail floor space, while Budapest alreadyreaches western levels with one square meter of shopping space per person, said a report published yesterday.Major cities like Győr, Debrecen and Székesfehérvár are expected to catch up soon with a second wave of developments underway, RegioPlan Consulting, an Austrian market research firm said. While the Budapest elitelives at near-western levels, the rest of the country’s purchasing power is still much lower, the study said.(MTI/APA)

Retail sales volume up adjusted 3.7% yr/yr in NovRetail sales volume decreased 0.1% in November of last year compared to October, but increased 3.7%compared to November 2003, according to working day-adjusted figures published by the Central Statistics Office(KSH) yesterday. Eleven-month retail sales rose a working day-adjusted 6.2% yr/yr. Retail sales volume rose4.6% yr/yr in November 2004, according to unadjusted figures. In line with EU statistics, the figures do not includesales of vehicles, vehicle parts or fuel. Retail turnover not including vehicle and fuel sales reached Ft 4,698.9

billion in the first eleven months of the year. The growth rate surpasses the comparable retail sales volumeincreases for the eurozone (0.4%), the EU 15 (2.2%) and the EU 25 (2.3%). (Econews; Nv 5, MH 12)

Office space openings slowed in 2004Less new office space was opened in Budapest in Q3 2004 than the amount of new leases in the same period,according to real estate consultant firm GVA Hungary Kft’s research, which signals a possible pick up in themarket in the near future. The company’s database registered new leases of 48,500 sq m in Q3 last year, whichcounts for a 5% increase compared to the previous quarter. Vacancy rates in the third quarter of 2004 dropped to18%, which, according to the report, could have further dropped to 16% by the end of the year. (Vg 19) R.G.

Forint almost unchanged after 50bp interest rate cutThe central bank’s 50 base point rate reduction yesterday did not affect the interbank market because traders hadalready priced the cut in. The forint traded between 246.10 and 246.50 to the euro in the morning, starting thesession at 246.55/75. On the forint market, rates for 12-month money decreased from around 8.50% to 8.30%,

which shows that traders are already pricing in the central bank’s next rate cut. The Monetary Council’s next rate-setting meeting will be on February 21. Trading on the secondary market for government securities was notinfluenced by the rate cut either. Yields remained at their morning level, down about 10bp from Friday. (Econews)

Politics

EP to launch Roma forum todayThe first meeting of the European Parliament’s Roma forum, set up by a Hungarian MEP to promote the interestsof Europe’s biggest ethnic minority, will be held today. The participants representing the European Commission,European Parliament, NGOs and young Roma experts from the EU member states, will discuss the EU’s Lisbonstrategy for enhancing competitiveness, as well as education and media issues, MEP Katalin Lévai said.Hungary’s former equal opportunities minister decided to set up the forum to combat what she termed as theRoma community’s regular exposure to discrimination in employment, education and everyday life in all EUmember states. (MTI)

DomesticEU subsidies pour into renovationThree towns in the Central Transdanubian region received plentiful funds from EU subsidies for the reconstructionof historical sites and buildings as part of the Regional Development Operative Program (RFOP) of the NationalDevelopment Plan. The municipality of Balatonfüred was granted subsidies worth Ft 379 million for a renovationproject involving its historical downtown. The town of Esztergom, north of Budapest, won Ft 600 million for thereconstruction of its main square, for a project which is also backed by Ft 18 million from the Interior Ministry. Themunicipality of Veszprém was awarded funds worth Ft 750 million for the renovation of a part of the local castle.(Nb 10) R.G.

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EU waste smugglers could face prison termsTwo Hungarians were caught trying to bring a truckload of used batteries from Slovakia to Hungary, police saidyesterday. The men were detained on smuggling charges after their attempt to cross into Esztergom, on theSlovak border, with a shipment of some 150 lead-acid batteries. The transportation of such waste -environmentally hazardous due to its acid content - requires thorough documentation for transport to the EU.Moving batteries across borders is a crime, despite the free flow of goods within the EU. The men face up to twoyears in prison in Slovakia, police said. (MTI)


GSM termination fees to drop 10%Mobile phone service providers will have to cut termination fees by 10% from June, which will also lead to lower end-user tariffs, National Communications Authority (NHH) president Daniel Pataki said at a press conference inBudapest yesterday. According to international practice, the termination fees applied by the three GSM serviceproviders may differ by maximum 20%, as opposed to the current difference of as much as 40% in some cases.Lower tariffs will also influence the price of landline-to-mobile calls. The three GSM companies will have 60 daysto submit their cost calculation mechanism (LRIC) and in the long run the companies’ fees will have to be entirelycost-based. (Econews; NG 4, Nv 5, Vg 13, Nb 14)

MÁV and E.On sign power dealTaking advantage of the recently liberalized electricity market, national railway company MÁV Rt has picked E.On

Energy Trading Kft as the winner of a Ft 5 billion public tender to supply power to MÁV’s 13 high-voltageswitchyards, which account for about half of the company’s total electricity requirement, management said. MÁV,which is weighed down by debts totaling approximately Ft 150 billion and has been reported by severalnewspapers to be facing imminent bankruptcy, saved Ft 800 million through the deal. E.On Rt’s electricity tradingcompany won the tender ahead of three other bidders including EFT Budapest Rt, Entrade Hungary Kft and athird contestant whose application was rejected as invalid. MÁV is planning on another electricity tender of asimilar scale later in H1. (NG 4; Vg 1) P.P.

FreeSoft wins upgrading contractIT company FreeSoft Rt, which was floated on the Budapest Stock Exchange (BSE) last September, has signed acontract worth more than Ft 60 million with BULL Hungary Computing Kft to upgrade Hungary’s criminal recordsystem. FreeSoft announced the contract on the Budapest Stock Exchange website yesterday. The contract isworth 10% of FreeSoft’s annual revenue, according to the announcement. FreeSoft had net revenue of Ft 634million in 2003. (Econews; NG 11, Vg 17)

MOL eyes Croation INAThe privatization of mostly state-owned Croatian oil company INA dd, in which Hungarian oil company MOL Rtacquired a 25% stake plus one vote in 2003, may continue in March, according to Croatian press reports. WhileMOL is believed to have an interest in a further acquisition, the local press outlined several possible scenariosincluding floating a 15% stake on the stock market, selling another stake to MOL or to Austrian strategic investor OMV AG. Croatia’s Privatization Act stipulates that two 7% stakes be allocated among of war veterans andcorporate employees in the next phase of privatization. If the Croatian government decides to sell shares to OMV,MOL is bound by agreement to offer an equal stake to the Austrian company. (NG 12) P.P.

TVK shuts down Austrian subsidiaryHungarian chemicals company TVK Rt has started winding up its Austrian unit, Austria Kunststoff GmbH, TVKannounced on the website of the Budapest Stock Exchange yesterday. The company supplied TVK products to Austrian clients. Austria had a 4% share from TVK’s exports in the first nine months last year. (Econews)

Profits expected by blue chips Approximately two weeks before the annual report season, expectation are especially high regarding blue chipsOTP Bank Rt and MOL Rt’s 2004 figures. Experts say that MOL could even surpass its previous Ft 200 billionforecast in net profits while OTP is expected to meet its Ft 140 billion-145 billion target. Matáv Rt is expected tohave Ft 30-36 billion in profits. (Vg 1) R.G.

GVH fines T-Mobile Ft 40 mlnThe Competition Office (GVH) has fined mobile operator T-Mobile Hungary Rt for Ft 40 million for misleadingcustomers. According to GVH’s ruling, information given to T-Mobile’s Relax package subscribers, a packageoffering calls at a fixed price, wrongly implied minute-based billing. The information also gave the false impressionthat if customers do not make calls they do not have to pay at all. (MH 12) R.G.

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Parmalat expects to break even in 2005 Ailing dairy company Parmalat Rt said it is looking to break even this year after losses of Ft 640 million in 2004.Parmalat, which went into liquidation last April but decided to continue production anyway, expects to pump upsales from last year’s Ft 7.5 billion to Ft 11 billion through nearly doubling its milk output to 72 million liters. Thecompany was declared insolvent early last year after its Italian parent company filed for bankruptcy. By then, theHungarian dairy maker accumulated debts of Ft 7 billion and was forced to go into liquidation. In order to offsetlosses in the longer term, Parmalat opted to cut 120 jobs later in the year, the cost of which made up the bulk of its losses in 2004. (Nb 17) S.F.

Hunguest sells hotels at homeHunguest Hotels Rt has recently sold two of its hotels, Hunguest Hotels Erkel in Gyula, southern Hungary andHunguest Hotels Szieszta in Sopron western Hungary, to Reál Portfólió Kft, a company founded last October. Although both Hotel Erkel and Hotel Sieszta were refurbished in 1998 and 2001 respectively, they both needconsiderable investments, said Reál Portfólió’s managing director Árpád Vásárhelyi. István Hülvely, CEO of Hunguest Hotels declined to disclose the price paid for the two hotels. (NG 1) R.G.

Békéscsaba Poultry lays of more workersMeat processing company Békéscsaba Poultry Kft is planning further layoffs after recently having let 50 people gofrom its workforce. The company, former meat processor of state-owned agricultural company Bábolna Rt, wasbought by a consortium formed by strategic investors last October. The new owner plans to reshuffle surplusworkforce in Békéscsaba to its Orosháza and Mezokovácsháza plants in southern Hungary, said managingdirector Tibor Varga. (Nb 10) R.G.

Pécs Brewery had flat year Pécs Brewery Rt suffered last year from cheap imported beer having invaded the Hungarian market. The PécsBrewery’s sales decreased from 2003’s 60,000 hectoliters to 327,000 hl in 2004. The company’s market sharedecreased from 7.3% to 5% over the year. Austrian owner Ottakringer Brauerei AG announced that they will reactwith a rationalization program including future layoffs at the Pécs Brewery. (Vg 13) R.G.

Komárom enjoys extra Ft 3 bln An unexpected Ft 3 billion tax payment will boost the 2005 budget of Komárom in northwestern Hungary to Ft 9.3billion, Mayor János Zatykó said. The extra revenue, which is a godsend to the town, came in the form of local taxafter one of the companies based in Komárom’s industrial park submitted a revised version of its 2004 tax return. According to the new version, it owes an additional Ft 1.47 billion in back taxes to the town and is supposed topay another Ft 1.47 billion in advance. According to an unnamed source, this company is Nokia Komárom Kft;however, Napi Gazdaság’s inquiries to the corporation were not able to confirm this. (NG 5) P.P.

Lambacher moves production to HungaryLambacher Hitiag Leinen, an Austrian linen maker, is moving production from Austria to its plant in Hungary,because of cheaper operating costs. The company’s administrative headquarters will remain in Austria.Lambacher still has a 10% share of Europe’s linen thread market, but has lost substantial revenue due to Chinesecompetitors. The company’s revenue fell from Euro 30 million in 2002 to Euro 26.7 million in 2003. Operatinglosses were Euro 3.8 million in 2003, and about the same in 2004. Lambacher’s plant in Hungary will be upgradedto accommodate the expanded production. (Econews)

Motorways steer toward PPP financing A government proposal due to come before Parliament early next month will put forward two plans to financemotorway development projects under Public Private Partnership (PPP) programs in future, business dailyVilággazdaság reported. According to one alternative, the construction as well as management of separatemotorway sections would be outsourced to private investors, while the other, which is said to be favored by

ministries, would see the National Motorway Rt act as an independent government organization managingmotorways and overseeing tenders for new developments. Both concepts are primarily aimed at removingmotorway construction financing from the state budget. (Vg 1) S.F.

Slag figures in motorway construction plans A 6-km bypass section of the M30 highway at Miskolc, the construction of which is scheduled to kick off later thisyear, may be the first project to use slag and other industrial byproducts from local steel manufacturer DAM 2004Kft, unnamed sources said. According to Eurofém-Halna Kft, the slag processing company established to takecare of Diósgyor’s steel industry waste, the company and its legal predecessors have accumulated 2.5 milliontons of these materials over the decades. The total amount of steel industry waste in the country is estimated attens of millions of tons, with Dunaferr Rt in Dunaújváros, central Hungary, having the single largest pool of waste. After the pioneering road construction project, slag from Diósgyor and nearby Ózd may be used in the newsections of the M3 highway to Debrecen and Nyíregyháza. (NG 5) P.P.

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Évgyűrűk pension f?nd reports 15.74% yield in 2004Évgyűrűk, a private Hungarian pension fund owned by Generali-Providencia Insurance Rt, reported a net yield of 15.74% in 2004. The fund had a gross yield of 16.36%. Évgyűrűk closed the year with assets of Ft 34 billion, up Ft11.5 billion from a year earlier. The yield on investing members’ fees accounted for Ft 4 billion of the increase. In2004, Évgyűrűk’s portfolio consisted of government securities (71.7%), Hungarian shares (11.2%), mortgagebonds (8.5%), foreign shares (6.2%), real estate (1.4%) and other bonds (1%). Sándor Fórizs, Évgyűrűk’schairman, said the makeup of the portfolio would not change until the second half of 2005, adding that more couldbe invested in real estate. (Econews; NG 4, Nv 5, MH 12)

Budapest Airport reports 1 mln passenger increaseThe number of passengers using Ferihegy Airport jumped 1 million to 6.5 million last year, boosted primarily bythe launch of a host of new discounts flights, airport manager Budapest Airport Rt (BA) said citing preliminaryfigures. Passenger traffic could well reach 7 million this year as a number of new international low-cost airlines areplanning to offer cheap flights from and to Budapest, while those already around are expected to fly more often.One of the biggest entrants this year could be Irish Ryanair, who is said to be currently recruiting a flight crew. (Vg1) S.F.

ISPA projects poorly planned - audit officeThe Hungarian environmental projects forming part of the ISPA pre-accession funding program have beeninadequately planned, prepared and regulated, the National Audit Office (ÁSz) found. As a result, these projectsmay be delayed by 2-3 years, the report concluded. Between 2000 and 2003, Hungary was approved Euro 333million in EU environmental funds; however, this money was not used in an efficient way, according to the office.

(NG 3) P.P.Economics

Parliament approves Ft 8 billion for road-buildingParliament approved Ft 8 billion in funding for 20 road development projects under the Operative Programme for Regional Development (ROP) yesterday. Minister for Regional Development István Kolber said the total budgetavailable for road building under ROP is Ft 25 billion. The projects involve building and resurfacing 185 km of roads, bridges and junctions in 40 towns and cities around the country. Kolber expects the projects to helpimprove Hungary’s competitiveness and boost regional development. (Econews; Nv 5)

Farm production up, prices down, says minister Exact figures are not yet available, but Hungary’s farm production has grown by at least 10 %, while crop pricesare down by that amount, the agriculture minister said yesterday. Addressing a conference in Hajdúszoboszló,eastern Hungary, farm minister Imre Németh noted that the prices farmers got for livestock had gone up, but only

by 4%, while the prices of farm materials and services were up by 10%. The main reason for the decline, he said,was the strong forint, which made exporting uneconomic. Revenues from dollar zones had plummeted by 30% inthe past two years, he said. „We haven’t a chance of competing to the dollar zones,” he said. Németh also notedthat Hungary had done poorly in trying to hold its own on EU markets after becoming a member. (MTI)

Politics

Constitutional amendment needed for spy lawThe constitution will have to be amended before passing a bill allowing full access to reports on friends, relatives,neighbors, and colleagues made by internal spies during the communist era, a government coalition party officialsaid yesterday, after receiving an ombudsman’s report. The ombudsman for data protection voiced concern over the bill on Monday, saying that while it protected the privacy rights of persons who had been spied on andinnocent third parties, it denied the privacy rights of the people doing the spying, their contacts, and in somecases, the professionals of the system. Ombudsman Attila Péterfalvi said this was cause for concern. (MTI; Nb 6)

Slovakia opposes expansion of Visegrád groupSlovakia is against Hungary’s proposal to invite Slovenia and Austria into the Visegrád Four group, the Slovakianforeign minister said yesterday. Expansion of the original four of Poland, Slovakia, the Czech Republic andHungary would signal the end of the cooperation group, Eduard Kukan said at a parliamentary committee hearing.Slovakia’s goal is to maximize EU funds that will be available between 2007-2013 for the four new members, andexpansion would not serve this goal, he said. (MTI)

Kovács will defend EVA taxHungary’s EU Taxation and Customs Commissioner, László Kovács told a conference yesterday that he hopesthe EU will approve Hungary’s simplified business tax, „EVA”, but if not he has prepared supportive arguments.EVA does not reduce tax revenue for the EU, and does not disrupt the functioning of the internal market, Kovácssaid. It does, however, simplify taxation, limit tax evasion and generally benefit SMEs and encourage competition,all of which are goals desirable for every country in the EU, he added. (Econews)

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3 short-listed for CsF assetsWhile altogether seven bids were entered by suitors to take over part of the assets of bankrupt Csepel MetalworksRt (CsF), only three offers have been shortlisted by the company’s liquidator as being reasonable. CsF, which fellinto liquidation late last year, was forced to put up for sale, part of its production hardware and plants in order topay off debts. Two bids are targeting CsF’s 523 unused manufacturing equipment, which the company hadoriginally hoped to sell for Ft 300 million, while a third was put for Cs’s 9.8-hectare site in Mór, western Hungary.The company’s debtors are due to meet next week to take a decision on the sale. (NG 9) S.F.

Axis - better than expected results

IT-developer and distributor Axis Consulting 2000 Kft had turnover of Ft 1.2 billion in 2004, higher than originallyplanned. The company group was founded 15 years ago. Axis Kft has improved its market position especially inthe governmental and financial sectors, general manager László Dénes said. Axis Consulting 2000 Kft has alsoperformed above expectations, it made most of its profits in the industrial and telecommunication sectors. (Nv 5)G.R.

Proportzia opens Bp plastic surgery clinicProportzia, a plastic surgery clinic based in Israel, has opened its first surgery in Budapest under the name Aesthetica International Medical Centers. Proportzia plans to open three more clinics in Hungary, as well as onesin the Czech Republic, Slovakia and Poland, Ron Grynholc, Proportzia’s majority owner, said yesterday. Grynholcsaid his company has invested hundreds of thousands of euros in the clinic and expects to see good returns,without offering further details. (Econews; NG 4)

EBRD to buy into Uniqa insurance

Uniqa Insurance Rt will announce this week that the European Bank for Reconstruction and Development (EBRD)buys a stake in the company, according to unnamed sources. The percentage of ownership that EBRD couldacquire was not revealed. The news was neither confirmed, nor denied, by the State Financial InstitutionsSupervision (PSzÁF). Uniqa has a market share of 5% of the insurance market in Hungary and is mainly active innon-life insurances. Uniqa merged funeral insurer Agrupación Funeuropa Insurance Rt last year into its owncompany last year. (Vg 11) M.K.

Kirchoff kicks off operationsWith several robot cells and a welding station installed, Kirchoff Hungary Kft’s new 1,800-sqm assembly hall hasbegun operation in the industrial park of Esztergom, north of Budapest. German-owned Kirchoff, a leadingsupplier of nearby Suzuki Rt since 2000, has already announced a similar investment for 2005 at a value of euro1.5 million. The recently launched plant, which currently operates with a staff of 30 that due to top 100 in future,will manufacture body parts for Suzuki to replace the automaker’s costly orders from Poland, but Audi is also

listed among its future partners. (NG 5) S.F.Malév reports record online sales in JanuaryOnline ticket sales of Hungary’s national carrier Malév Rt rose tenfold in January from the same month last year,Malév said yesterday. Malév sold Ft 72 million worth of tickets online in the third week of January, more thandouble the sales in the best week of last year. Malév had revenue of Ft 1.7 billion from online ticket sales in 2004.Online ticket sales in Hungary accounted for 14% of Malév’s overall ticket sales in Hungary, or 6.9% of Malév’soverall global ticket sales in 2004. The most popular destinations among those purchasing Malév tickets onlinelast year were London, New York, Paris, Brussels, Zurich and Dublin. (Econews; MH 12, Nv 5)

Pér airport expects 50% traffic increaseThe airport of Pér, near Gy?r, expects a traffic increase of 50% this year, managing director of operator Gy?r-Pér Airport Kft László Vadász said. Pér airport was originally developed on the initiative of Audi Hungária Kft, which islocated in Gy?r, and the company contributed with 1 million Euros to the development of the airport in 2003. Audi

uses the airport for six flights per week, but and increasing number of companies in northwest Hungary fly thereas well, Vadász said. Pér airport expects several charter flights this year too, Vadász said. (Vg 5) M.K.

AstraZeneca’s sales fall slightlyDrug giant AstraZeneca said yesterday that sales at its Hungarian subsidiary came to Ft 16.1 billion in 2004,down from Ft 16.6 billion a year before, but in line with the target. Emese Majorosi, AstraZeneca’s spokeswomanin Hungary, explained the decrease saying some of AstraZeneca’s products are no longer fully covered byHungary’s health insurance system, and state-subsidized drug prices were reduced 15% for three months startinglast April. AstraZeneca sells 20 products in Hungary, all of which are subsidized by the state. (Econews; MH 11)

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Economics

Járai: euro in 2010 can still be metHungary can still introduce the euro, as planned, in 2010, but meeting the deadline will require an economic policyconsistent with the target and a tighter fiscal policy, National Bank of Hungary president Zsigmond Járai told aBudapest meeting of the American Chamber of Commerce yesterday. The central bank could cut the central bankbase rate by 50bp on Monday in the light of favorable inflation figures last year as well as improving inflationprospects, he said. (Econews; NG 3, Nv 5, MH 11)

Economy set to slow upHungary’s economic expansion will slow somewhat this year as GDP growth is likely to slip from a 4% in 2004 to3.8%, market researcher Ecostat said in a preliminary report. Industrial output in 2005 is estimated to drop a fullpercentage point to 7.5%, while both the construction and retail sectors are projected to experience a 0.5%contraction. Inflation, on the other hand, will continue to moderate throughout the year with consumer prices set torise 4.8% versus 6.8% in 2004. According to the survey, however, there is little hope that the government’sbudget deficit will be curbed substantially and the current account deficit will also come in near the 2004 level of Ft7 billion. (NG 3) S.F.

Legal tobacco market shrinksLegal tobacco trade has declined by 50% in Hungary over the last five years, according to unnamed sources.Unfortunately, the figures do not correspond to less tobacco consumption, but to the stronger position of tobaccoblack market. Currently only two factories produce cigarettes in Sátoraljaújhely and Pécs, as against four twoyears ago. The government budget looses out on at least Ft 15 billion per year in taxes due to cigarette

smuggling. (Vg 1) M.K.Gyurcsány seeks weaker forintPrime Minister Ferenc Gyurcsány said he’d like to see a weakening of the forint, which has gained 6.7 % againstthe euro in the past year, to bolster exports and maintain economic growth. ‘I would find a cheaper forint usefulfrom the point of view of the general interests of the Hungarian economy,’ he said in an interview yesterday. Hedeclined to say how much the currency needs to fall. (Bloomberg; Vg 4)

Banks begin subsidy homeloansSome banks are already offering their home loans based on the Fészekrakó state subsidy program. Couplesbelow the age of 30 and singles with a child may get a state guarantee on their home loans for new flats up to Ft15 million in Budapest and Ft 12 million outside Budapest. For buying used flats the limits are Ft 12 million and ft8 million. The clients must have at least 10% of the price to receive the loan. Kereskedelmi and Hitelbank (K andH) Rt is the first to adopt the claims from today on, although the program will only start Feb 1. (Nv 5) G.R.

Office space in Budapest stableThe cost of renting office space in Budapest should remain unchanged, according to a study by commercial realestate brokerage Cushman, Wakefield, Healey and Baker. The study shows more businesses are setting up inHungary, causing vacancies to decline, but this is being balanced out by an increase in the supply of ’A’ categoryoffice space. Up-market office space in Budapest goes for about Euro 287 per square, including rent, taxes andbuilding administration costs. This is cheaper than in Vienna, where the same costs Euro 336/square meter, or Warsaw (Euro 325/sqm), but is more expensive than Budapest’s main rival in the region, Prague (Euro 270/sqm)(Econews)

Questionable homepagesThe Consumer Protection Agency examined 100 Hungarian e-commerce homepages and found severalirregularities. The consumer protection law sets up stricter rules for e-business, because the consumer may notsee the goods before buying them Therefore sellers must offer a lot of information about themselves and their

products and they also have to buy back the goods within eight days if they consumer changes his or her mind. According to the inspection, 86 e-shops did not comply with these regulations. Moreover, only 11 of them hadpermission to trade. Some of the homepages also offered tobacco ware and pharmaceutical products, which areillegal to sell online. (MH 12) G.R.

Gov’t proposes Ft 1.2 bln for sportsThe government has decided to boost the amount set aside for sports by another Ft 1.2 billion from budgetreserves, Prime Minister Ferenc Gyurcsány said yesterday. Gyurcsány was Minister for Youth and Sports beforebecoming Prime Minister, and made the ministry part of the Prime Minister’s Office upon his appointment.Gyurcsány noted that this was the second boost to the sports budget this year, having already raised the amountby Ft 2 billion to Ft 20.3 billion. (Econews)

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Politics

MPs to elect new president in JuneParliament is scheduled to elect the country’s new president on June 6 or 7, Socialist parliamentary leader IldikóLendvai said after meeting House Speaker Katalin Szili and senior officials of the other three parliamentary partiesyesterday. President Ferenc Mádl’s five-year mandate expires on August 3, 2005. Just one presidential candidatewill be nominated, and that by the governing Socialists and liberal Free Democrats, who only hold a thin majorityin Parliament. (MTI; Vg 4, Nb 6, MH 7, Nv 3)

Dióssy becomes new Economy state secretaryMember of the Alliance of Free Democrats (SzDSz) Gábor Dióssy will become the new political state secretary of the Economy and Transportation Ministry, Internet website Index reported. Dióssy has been loyal to SzDSz sincethe party’s foundation. He will be the third political state secretary in the ministry since the last general elections.His predecessor Gyula Gaál left after he had been offered the position of chairman-CEO of Hungarian RailwaysMÁV Rt. (Vg 4) M.K.

Domestic

Cardinal Erd? appointed to CongregationPope John Paul II has appointed Cardinal Péter Erd?, Archbishop of Budapest-Esztergom, to membership in theCongregation for Divine Worship and the Discipline of Sacraments, the archdiocese said yesterday. ‘This is thefourth high office of the Apostolic Holy See in which the Hungarian Primate is a member with voting rights,’ it said.The cardinal is also a member of the Pontifical Council for Legislative Texts, the Supreme Tribunal of the Apostolic Signature, and the Congregation for Catholic Education. (MTI; MH 2, Nv 3)

Király Street openedThe Mayor of Budapest, Gábor Demszky, and Mayors of the VI and VII districts, István Verók and GyörgyHunvald declared the renovated Király Street open yesterday. The street was restored with Ft 609 millioninvestment in cooperation of the two districts and the city, within the city rehabilitation program. The street isrenewed between Deák Square and Nagymez? Street. This year Ft 1.3 billion will be spent within the cityrehabilitation program. (Nv 4) G.R.


Skoglund Holding, SASAD to mergeShareholders of Skoglund Holding Rt, listed in category 'B' of the Budapest Stock Exchange, will be asked toapprove a merger with SASAD, a real estate company, at an EGM called for February 28, according to an

announcement yesterday. With the merger, Skoglund will change from a business consultancy into a real estatecompany. The change in activity came after Bankar Holding boosted its stake in Skoglund to 100% last summer.Skoglund sold assets related to its earlier line of business and used the proceeds, along with a Ft 606 million loanfrom Bankar, to buy SASAD's three real estate companies: SASAD Asset Management, Sasad Aldra Real EstateManagement and Budatétény Projekt Real Estate Management. (Econews; NG 12, Vg 17)

Tsunami costs travel co's Ft 500 mlnHungarian airline Malév Rt had a revenue fallout of Ft 300 million and is still calculating its additional costsincurred as a consequence of the Asian tsunami, the company said yesterday. Malév has contracts with eightHungarian travel agencies for flights to Southeast Asia, primarily to Thailand. The airline is working with travelagents to meet the demand of clients who booked trips to the region before the disaster, but now want to travelelsewhere. As part of this effort, Malév has added four more charter flights to Cuba this winter. Malév hadscheduled 19 charter flights to Southeast Asia, but cancelled 15 of these. Travel agencies have suffered losses of

Ft 200 million because of the tsunami, according to a spokesman for Hungary's association of travel agents(MUISZ). (Econews; NG 4, Nv 5, MH 13, Vg 13)

BUX finishes with new all-time highThe Hungarian blue-chip index pushed to an all-time high and topped typical volumes yesterday, despite atechnical glitch on the bourse's trading system that disrupted deals for almost an hour in the morning. OTP bankRt held the limelight with the most shares changing hands, as well as providing the best gains within a broadlypositive market. The BUX index soared 284.5 points, or 1.87%, to 15,497.24, while huge buy orders for pharmaEgis Rt helped to lift the mid-cap BUMIX index, which surged ahead 32.26 points, or 2.29%, to close at 1,441.(Econews; NG 1, MH 3)

Suzuki Wagon R+ to be relocatedCar manufacturer Magyar Suzuki Rt decided on relocating the production of its Wagon R+ model from itsEsztergom plant to Poland in order to free up capacity at the factory. The company will use Esztergom's total

150,000 cars per year capacity to make its Ignis and new Swift model. Suzuki is preparing to invest Ft 50 billion inthe further expanding the Esztergom plant. The company has not decided yet on whether to pull the Wagon R+altogether from the Hungarian market, decision is expected in March. (NG 5) A.K.

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Törley buys WaltonSparkling wine manufacturer Henkell & Söhnlein Hungary Group (H&S) bought the rights to sell and produceWalton brand sparkling wine from Walton Pezsg?gyár Rt at an undisclosed price. Walton sparkling wine is thethird best selling product on the Hungarian market. Törley Pezsg?pincészet Kft a member of the H&S Group willmarket and produce Walton sparkling wine in the future, thus reenforcing its market leadership. Walton after selling its flaghip brand will go on to manufacture own-brand sparkling wine for supermarkets. Walton had Ft 13.9billion turnover last year. (NG 4) A.K.

Austrians to build adventure center

Austrian Lukale Investment & Development Rt is going to build an adventure town in a Gy?r-Moson-Soproncounty village called Bezenye. The first phase of the investment will include the building of a 60,000 sqmshopping center, a four-star hotel and an adventure park. It will be started this autumn and finished within year; itwill cost about Euro 228 million. In 2007, an additional adventure spa will be built. The total investment willamount to Euro 400 million. The investors expect 8 million visitors yearly, mostly from Austria and WesternEurope but from also from Hungary and Slovakia, major of the village, Mátyás Schmatovich said. The adventuretown will employ 6,000 - 7,000 people. (Nb 8) G.R.

Mondi Business Paper invests Euro 8 mlnMondi Business Paper expects to invest the same amount at its paper mill in Szolnok (E Hungary) this year as itdid in 2004, Guenther Hassler, who heads Mondi Business Paper, said at the Paperworld industry fair in Frankfurtyesterday. Last year Mondi spent Euro 8 million on developments at the mill. Mondi also has another paper mill inHungary, in Dunaújváros, 60 km south of Budapest. The two paper mills turn out about 200,000 tons of paper a

year. (Econews; Ng 5)MÁV fleeced to tune of Ft 300 mlnThe number of thefts of MÁV Rt company property was 20 times higher last year, said György Földházi, head of MÁV security department. The most expert criminals not only steal traffic signs and lamps, but pieces of the trackand their screws as well. Endre Komáromi, traffic security head of Budapest Police Department said that thesecrimes might put human lives in danger. The metal pieces collected are later sold to metal recycling companies,the replacement of which cost the company approximately Ft 300 million last year. (NV 4) E.C.

BÉT opens for EU companiesThe board of the Budapest Stock Exchange (BÉT) amended its regulations regarding the listing of foreign stocks,thus harmonizing its regulations with other EU exchanges. The new regulation provides the opportunity for EUcompanies to be quoted on BET. Attila Szalay-Berzeviczy, BET president called on the Austrian owners of theExchange to lead by example by listing their shares on BET. (NG 12) A.K.

Vatera business surgesVatera.hu, the largest online auction portal quadrupled the total value of transactions done in 2004 compared to2003, reaching Ft 1.2 billion. The total number of goods offered and sold reached 940,000. The portal also has57,000 registered clients. The value of transactions was Ft 93 million in 2002 and Ft 317 million in 2003. Most of the wares sold were electronic products, mobile phones, cars and antiquities. Operator of the portal, Vatera Kftwas established in 2000 and is owned by financial investors and the management. (Vg 13, NG 5) G.R.

Kravtex develop new 12 meter busGy?r-based autobus company Kravtex Kft has recently developed a 12-meter long bus at its new diagnosticcenter. The company has been producing buses on the basis of the patent they bought from the Czech firm SORLibchavy in 1999. Kravtex produced nearly 100 buses in 2004, however, they have no orders for 2005 yet. Fromthe development of the new 12-meter bus, which was funded by the company itself, they are expecting a growthof the domestic market share. Kravtex's non-consolidated revenue was Ft 4.5 billion last year, and they employ a

total of 500 workers on their Gy?r and Mosonmagyaróvár bases. (Nv 11) E.C.Borsodchem and Dynea double formaldehydeBorsodchem Rt, Eastern Europe's biggest maker of PVC plastic, said today it hired Dynea Oy, a Finnish chemicalmaker, to double its capacity to make formaldehyde, a raw material for MDI foam. Kazincbarcika, Hungary-basedBorsodchem is looking to benefit from growing demand for MDI, which is used to fill car seats and insulateequipment such as refrigerators. The profitability of making MDI is also rising, as the price of benzene; its basematerial falls in line with the price of oil. Borsodchem will use technology supplied by Dynea, owned by buyoutfirm Industri Kapital, to increase the capacity of its formaldehyde plant to 120 kilotons from 60 kilotons, thecompany said on its Web site. (Bloomberg)

BSE halts trading for half an hour There was an hour halt in trade at Budapest Stock Exchange (BÉT) yesterday morning. The forced break wascaused by a bid submitted with faulty parameters, and had an effect on the trade of all commodities. The mistakewas identified immediately, and the trade was successfully restarted at 11:35 a.m. According to the press releaseof the BÉT, they will do their best to eliminate such system errors in the future. (NV 5) E.C.

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Szeged landfill phase one finishedThe first phase of a Ft 6 billion landfill and waste selection site serving the area around Szeged has beencompleted, Ferenc Szabó, who heads Szeged Environmental Management, the company running the selectionfacility, said yesterday. The first phase of the project cost Euro 1.2 million. The second phase will be finished bythe end of 2006. The cost of building the landfill is being covered by EU money, the Ministry of the Environmentand Water Management and the Szeged City Council. (Econews)

Economics

Unemployment rate at 6.3% in Oct-DecHungary's average rate of unemployment was 6.3% between October and December 2004, unchanged from theperiod between September and November, and up 0.8 percentage points from the same period a year earlier, theCentral Statistics Office (KSH) said yesterday. The unemployment rate was 6.5% among women and 6.1%among men. The average jobless rate was 6.1% in 2004, up 0.2 percentage points from 2003. KSH calculates the jobless rate in line with ILO standards. The average number of unemployed was 263,300 between October andDecember of 2004, up a slight 1,600 from September-November, and up 31,400 from the same period in 2003.(Econews; Ng 3, MH 2, Vg 5, NB 16)

World Bank criticizes HungaryThe World Bank in its Central European regional report expressed fears that Hungary might fall short of its deficitreduction targets, while other former Socialist countries are on the right track in 2005. The institution condemnedHungary's financial leadership for making overly optimistic assumptions on the country's economic growth and onthe positive effects of tax reform and PPP programs. The World Bank forecasts growth to be 4.5% in the region,

while the EU Commission expects 5.2% GDP growth for 2005. (NG 3) A.K.10 yr dollar bond launchedHungary launched a USD 1.5 billion, 10-year bond offering in overseas capital markets yesterday as thegovernment took a big step in its plan to scale back local currency debt issuance and diversify beyond euros, DowJones Newswires reported from New York. The size of the deal was raised from guidance of USD 1 billion onWednesday and is three times as large as the original mandate given to investment banks in December, when thedollar-denominated issuance plan was announced by the government debt management agency AKK. Thesovereign bond will be issued at a spread of 0.57% points over U.S. Treasuries, at the lower end of the 0,57-0,59% points spread talk. (Econews; NG 3, MH 11)

City rehabilitation launchedThe city council decided to launch its new city rehabilitation test model yesterday but it will still retain its oldprogram. They are planning on developing mainly crisis areas, using state budget, entrepreneurial contribution,

and EU sources. According to experts, Budapest would need Ft 1000 billion to be fully revitalized, however, onlyFt 40 billion has been spent on rehabilitation over the last 8 years. Some parts of district 8 and district 10 will bedealt with first, as these are the areas where dwellers live under the least favorable social circumstances. (NV 4)E.C.

Payments to farmers to grow to 60% of EU-15Hungary's farmers will be eligible for Euro 375 million in EU direct payments this year, 70 million more than in2004, the minister of agriculture and regional development said yesterday. Including subsidies from the centralbudget, Hungary's farmers will get 60 % of what their counterparts in the EU-15 get, Imre Németh said. Némethsaid farmers who were entitled to payments and filled the application forms accurately would receive the moneyby the end of February. But the main opposition Fidesz party said the ministry paid out only a fraction of Euro 305million due for 2004 by the end of January this year. (MTI; MH 12, Vg 15)

Environmental plan gets Ft 3.4 bln

Some Ft 3.4 billion was given out in this year's first tender of Environment and Water Operative Program. Ft 1.4billion of that will be spent on solving environmental problems of town and villages, for example preparingenvironmental programs or decreasing dust and noise pollution. Ft 770 million goes on selective wastemanagement and salvage investments, Ft 186 million on Vásárhelyi-plan, mostly environmental education. (Nb 8)G.R.

Bonus tax surprise for Komárom A local company will pay an unexpected Ft 3 billion in business tax to the municipality of Komárom. The sum willincrease the town's this year's budget by 54%, major János Zatykó said. The unspecified company made arevision on its 2004 tax return, and will pay additional Ft 1.4 billion local business tax for last year and the rest for 2005. Thanks to the new fund, the town will be able to cancel a planned Ft 504 million loan. About Ft 700 millionwill be spent on improved sites and on building and renovating of tenement flats. (Nb 11) G.R.

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7/28/2019 7Days, 2005. január 31.


7days, 2005. január 31

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