7days, 2005. május 9

7/28/2019 7Days, 2005. május 9.

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

03 May 2005Business Pécsi Direkt sets up center in Pécs

Cisco suspends Synergon partnershipRockwool upgrades with euro 12 mlnKDB terminates MÁV tender Lufthansa exec on airport problems

Matáv renamed Magyar TelekomBanks to lay out Ft 800 mln for Basel IICsányi protests bourse’s planNilfisk invests euro 5 mln nr BudapestCafeteria benefits on the riseHungo-Croatian soccer EC 2012 bidKarsai plastics to build Romanian plant - VgPannonplast sets up HR company to save expensesMNB suffers lossesHungarian winemakers set up marketing body

Economics Industrial producer prices rise 5.0% yr/yr in March

PMI rises to adjusted 50.5% in AprilOECD survey on pensionsNo layoffs in public sector

Politics Memorial to Swiss diplomat inauguratedSaudi ambassador to return to BudapestLarger opposition party MP acquitted of forgery

Domestic University of Debrecen to turn to courtHorseshoes warn of danger

Stockwatch BUX Close: 16495.01 Change: +117.27 (+0.72%)Exchange Fixed Middle RateWeather Tomorrow: showers

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04 May 2005Business Gov’t gets stricter on travel agents

Gyulai meat processors to be soldCitigroup-Deutsche Bank wins tender NABI reaches wage agreementErste Bank profit 4.4% lower under IFRS

Synergon faces anti-trust investigationTV2 earns Ft 1.2 bln from Megasztár Asbestos still available illegallyEmployers to be jailed for illegal labor MKB launches Hozamvadász open-end fund ABLON opens malls outside capital in autumnKDB Bank Hungary to pay no dividendKDB Bank sells investment arm to Buda-CashHungarotherm fair opensHungarians shy of restaurants - surveySzeged train station to be revitalized

Mafilm needy of capitalFt 1.5 billion available for cross border cooperation

Economics 7.1% unemployed in Q12-month foreign trade deficit revised downwards

Politics Hungarian differs from EU on Ukraine, BalkansDomestic Debrecen airport to receive first scheduled flight

Fertö Lake area gets water treatment plantMTA chairman re-elected

Stockwatch BUX Close: 16,496.37 Change: +1.36 (+0.01%)Exchange Fixed Middle RateWeather Tomorrow: rain

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05 May 2005Business Steps to whitewash black economy

Pannonplast may buy Bulgarian companyMÁV aims for fast tender completionNokia, Siemens to supply Vodafone 3G Aussie telco tipped for Antenna bid

Synergon confirms Cisco splitRichter to build USD 62 Mln facilitiesLeniency for late record submission?TNT reports revenue up 14% in 2004Ft 5 mln fine for VolánbuszMTV's upcoming HQ tender ÁPV to sell Budapest Airport soonNew leadership for Hungarian TourismEHEP pays no dividendForeign owners of co's get 16% morePhilip Morris - new delivery system

Economics MKK to handle tax debt collection Járai: No more room for fast paced rateLess cash for crisis wine distillationDiesel price - no reductionHungarian wins Romanian twin tender Results of Lake Balaton development outlined

Politics Extra constitutional judge Fidesz demands resignation of state secretary

Domestic Bp hosts conference of EU House SpeakersHung/Rom/Irish municipalities'joint bid

Stockwatch BUX Close: 16414.54 Change: -81.83, (-0.50%)Exchange Fixed Middle RateWeather Tomorrow: rain

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06 May 2005Business Grain surplus may go to Portugal

FHB’s Q1 profit increasesOTP offers bridging loan for farmersVCP : TVK needs capital raisePrivatization of FHB tender called

Hormann Hungária turnover of Ft 4.5 blnInterior decorating plaza opensPannonplast Q1 loss narrows on cutsMaster-Good opens plant in Kisvárda ACNielsen remains market leader Dunaferr marks Euro 275 mln for developmentsPlayhouse franchise goes nationwidePannon GSM finedHungarotel finedHung-Rom 400 kV transmission line

Economics FM: combating untaxed labor serves all

Veres pledges spending cutsQueues expected as tax deadline loomsForint volatilityHealth-care system to be reformed.Joint tourism promotionDeficit figures out todayProject evaluation process to speed upSeveral companies to fill potholes

Politics Orbán: EU entry hinders ethnic kin tiesDomestic PM asks for forgiveness in AuschwitzStockwatch BUX Close: 16536.61Change: +122.07; ( +0.74%)Exchange Fixed Middle RateWeather Tomorrow: showers

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09 May 2005Business PM outlines new employment policies

Richter Q1 net rises on East EuropeContintl Teves wins GM/Toyota contractsBorsodChem/Linde Ft 32 bln investmentDémász Q1 profit down on power costs

Gyermely wins lawsuit against Mary-Ker Herukon to close, 600 laid off Tatabánya to build Ft 4 bln plazaLe Belier Ft 1.5 bln new plantMÁV may face penalty Auchan agrees to negotiateFeeble share market creeps 1.2% forward5 hopefuls for BKV chip tender Strabag to build dorm in GyöngyösDeloitte moves to new HQMatáv changes name to Magyar Telekom

Anomaly in Paks power plantEconomics 40% of waitstaff's tips for gov't

Industrial output up adjusted 3.9% yr/yr EIB hesitant to ink Metro loan agreementSzolnok gets Ft 600 mln for E-admin April public finance deficit Ft 225.1 bln

Politics Fidesz/Christian Democratic win New Generation supports Hempseed Assoc.

Domestic Trade Unions: new airspace control structure unsafeStockwatch BUX Close: 16570.48 Change: +33.87; (+0.20%)Exchange Fixed Middle RateWeather Tomorrow: showers

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03 May 2005BusinessPécsi Direkt sets up center in PécsPécsi Direkt Kft, the operator of Alexandra book publishing, will set up a warehouse and distribution center in theindustrial park of Pécs, southern Hungary, in a Ft 2 billion greenfield investment, business daily Napi Gazdaságreported. Pécsi Direkt, which runs 48 Alexandra bookstores in 28 towns nationwide, has recently openedHungary’s largest ever book plaza in Budapest covering 2,200 sqm on five stories. While confirming theinvestment, the company would not comment on the details of the project. (NG 5) S.F.Cisco suspends Synergon partnershipCisco Systems Inc. has suspended its partnership agreement with Synergon Rt, the Hungarian systemsintegrators, for distributing IT solutions of its Chinese rival Huawei Technologies Investment Co., business dailyNapi Gazdaság said quoting an online source. The US networking equipment and network management supplier earlier brought a lawsuit against Huawei for technology infringement, which the latter eventually acknowledged.Synergon signed a one-year agreement with Huawei in mid-April, which authorized members of the Synergongroup to use Huawei’s products when providing customers system integrator solutions. (NG 1) S.F.

Rockwool upgrades with euro 12 mlnThe Danish Rockwool International A/S is spending euro 12 million to upgrade its insulation manufacturing plantin Tapolca, western Hungary, the company said. The investment will boost the facility’s production capacity,efficiency and environmental parameters, aimed to make it into Rockwool’s regional distributor of stone wool. The

Danish insulation maker first began distributing in Hungary in 1994 and set up its local manufacturing arm,Rockwool Hungary Kft, three years later when it took over Isotechnik Kft. The company bought its plant in Tapolcalast year from the Spanish Poliglas. (NG 5) S.F.

KDB terminates MÁV tender The Public Procurement Arbitration Committee (KDB) has terminated the result of the much-contended MÁV Rtrailway tender without ordering a new procedure, according to business daily Napi Gazdaság. In effect, thedecision prevents the state railway company from signing the contract, worth some Ft 120 billion-Ft 130 billion,with the tender winner Stadler Bussnang. KDB mounted an inquiry into the outcome of the tender, after Bombardier, which lost narrowly to Stadler, filed a complaint with the authority claiming the Hungarian subsidiaryof Stadler had used its parent’s revenue figures to meet the tender’s requirements. KDB is also believed to haveimposed a fine amounting to several million forints on MÁV. (NG 1) S.F.

Lufthansa exec on airport problems

Budapest’s international Ferihegy airport may no longer be in the top range of service providers for air carriers inCentral and Eastern Europe, Gábor Horváth, Director in charge of CEE Sales at Lufthansa, the largest foreignairline operating in Hungary, said in an interview to daily Magyar Nemzet. Both traditional and budget airlines areunsatisfied with the services offered by airport operator Budapest Airport Rt, Horváth said. Horváth mentioned acapacity overflow expected in the summer, saying that the airport will have huge problems, and although this hasbeen known to Budapest Airport for a while, no solutions have been offered. It is also unclear when the upgradeof the airport’s Terminal One will be completed and what changes this will bring for airlines. (MTI)

Matáv renamed Magyar Telekom As reported earlier, Matav Rt has changed its name to Magyar Telekom Rt as and adopted all the brands of theparent company Deutsche Telekom. Budapest-based Magyar Telekom introduced Deutsche Telekom’s T-Combrand for its fixed-line services, T-Systems for its corporate services, T-Kabel for cable television services and T-Online for internet services, Chief Executive Elek Straub said at a press meeting yesterday. Magyar Telekom will

keep the names of Telekom Crne Gore, the fixed-line monopoly in Montenegro, and of MakTel, the Macedonianphone monopoly. (Bloomberg; Nv 5, MH 12)

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Banks to lay out Ft 800 mln for Basel IIBanks say that expenditures necessary for the preparation for Basel II, are in the order of Ft 60-800 million,according to the latest PSzÁF survey, which was returned by 29 banks and 10 investment funds. The majority of the expenditure is attributed to IT development such as software licenses and consulting fees. The costs shown inthe report cannot be compared, since some companies indicated yearly costs, while others are covering severalyears’ expenditure. The financial institutions with a smaller market share do not have a plan ready to fulfill thetasks and do not plan on hiring external consultants. Problems will be taken care of the departments themselvesas they arise, according to the survey. (Vg 15) E.C.

Csányi protests bourse’s planSándor Csányi, CEO of OTP Bank Rt, said on Friday that the Budapest Stock Exchange’s (BÉT) owners shouldconsult with the bourse’s most traded companies before making plans to move the exchange someplace else. Headded that the companies whose shares are traded the most on the exchange could set up their own exchange, if they wished. ‘It seems strange that one of the major investors of the Budapest Stock Exchange should makestatements on the future of the bourse without first sounding out the large issuers,’ Csányi told the press after thebank’s AGM on Friday. (Econews)

Nilfisk invests euro 5 mln nr BudapestNilfisk Advance, the leading Danish cleaning equipment maker, is set to build a plant in Szigetszentmiklós, southof Budapest, in a euro 5 million brownfield investment. The project is part of the company’s plan to set up itsregional hub in Hungary. The new production facility will initially operate with 250 staff and manufacture small-and medium-sized cleaning systems. Nilfisk has recently launched its first Hungarian plant in south-western townof Nagykanizsa to produce high-pressure cleaning equipment. (NG 1) S.F.

Cafeteria benefits on the rise According to a survey conducted by Mercer Human Resource Consulting Kft the so-called cafeteria system of employee benefits is rapidly gaining popularity among companies. In 2003 only 7% of the participating companieshad a cafeteria system, while this figure rose to reach 40% in 2004. The cafeteria system means that theemployee can decide how to spend the fixed annual amount provided by the employer in the form of differentbenefits such as health fund contributions, food tickets and travel vouchers. (NG 13) A.K.

Hungo-Croatian soccer EC 2012 bidThe application proposal for the organization of the 2012 European Championship in Soccer is to be completedby mid-May. Budapest and Debrecen are the most probable Hungarian locations for the sport event, to be jointlyorganized with Croatia. If the countries’ bid is successful, they will have to spent Ft 60-80 billion on stadiumconstruction and renovation, totaling Ft 200 billion if infrastructural development is also included. Playoffs need 30000-capacity stadiums, semifinals require a 40 000-capacity complex, and the final game has to be held in a 50000-capacity arena, all stadiums having to meet all UEFA criteria. At present, no stadiums in Hungary meet thesecriteria. (Vg 7) E.C.

Karsai plastics to build Romanian plant - VgKarsai Holding Rt, a Hungarian maker of plastic packaging materials, plans to build a plant to manufacturewrapping for medicines, food and cosmetics in Romania for Ft 500 million, daily Világgazdaság reported, citingthe company’s chairman. The company is building its second factory in a year, after opening a Ft 400 million plantin Hungary last year, Chairman Béla Karsai said, according to the newspaper. Karsai Holding will boost thenumber of its Romanian employees to more than 100 from the current 30, he said. Karsai said in 2003 that thecompany may sell new shares to the public this year to finance international expansion. Karsai Holding suppliescompanies including Royal Philips Electronics NV, Nokia Oyj and the Opel unit of General Motor Corp.(Bloomberg; Vg 11)

Pannonplast sets up HR company to save expensesPannonplast Rt, a Hungarian plastics maker, set up a human resources unit to help save costs as the companytries to return to profit. Pannonplast owns 74% of its new unit, Pannonplast-Human Kft, while the rest is in thehands of ‘experts,’ the company said in a statement on the stock exchange’s Web site. Pannonplast expects thenew company to save it Ft 50 million this year and as much as Ft 100 million in 2006. Budapest-basedPannonplast had its third annual loss last year, as faltering economic growth in Western Europe reduced demandfor products such as television sets, computer monitors and printer casings. The company has been selling units,real estate assets and equipment to stem losses and pay off debt. The company’s fourth-quarter loss was Ft 820million, compared with a loss of Ft 1.17 billion in the year-earlier period as sales fell 14% to Ft 6.46 billion.(Bloomberg; NG 10, Vg 13)

MNB suffers lossesThe National Bank of Hungary (MNB) suffered losses of Ft 42.8 billion last year according to the bank’s annual

report. The losses are mostly due to the strong forint, which appreciated by 6.2% last year, lowering the value of MNB’s foreign currency reserves by Ft 157 billion. The National Bank’s primary goal is to shape monetary policy,while profitability is less of an issue. (MH 12) A.K.

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Hungarian winemakers set up marketing bodyHungarian Wine Marketing Kht has been set up to improve the market position of Hungarian wines, NationalCouncil of Wine Communities (HNT) secretary András Urbán said yesterday. Hungarian Wine Marketing wasestablished by the Hungarian Wine Academy, the Hungarian Association of Grape Farmers and Wine Makers, thePannon Wine Guild and the HNT. Hungarian Wine Marketing will work to ensure that Hungarian wines enjoy abetter reputation abroad and more transparent market conditions. The marketing body will also confirm proper provenance tracking and quality assurance in the Hungarian wine industry. Urbán said the founders have signeda agreement which will allow members which join Hungarian Wine Marketing later on to have an equal say in the

decision-making process. (Econews; Vg 7, MH 11, NG 4)EconomicsIndustrial producer prices rise 5.0% yr/yr in MarchIndustrial producer prices rose 5.0% in the twelve months to March, and rose 0.8% from February, the CentralStatistics Office (KSH) reported yesterday. Industrial producer prices for domestic sale increased 9.9% yr/yr inMarch and rose 0.6% from February. Industrial producer prices for exports, in forint terms, increased 1.3% yr/yr inMarch and rose 1.0% from February. The twelve-month increase in producer prices for domestic sale included a12.6% rise in energy prices and an 8.9% increase in prices for manufactured goods. Prices for refined petroleumproducts rose 27.5%, prices for machinery rose 3.8% and prices for electrical equipment increased 5.0%.(Econews; NG 3)

PMI rises to adjusted 50.5% in AprilHungary’s Purchasing Manager Index (PMI) rose 1.8 to a seasonally adjusted 50.5 in April, Halpim, the companywhich compiles the index, reported yesterday. Unadjusted April PMI was 52.0, up 1.0 from March. Seasonally-adjusted PMI was over 50 in November and December last year before dropping to 48.2 in January andweakening further to an all-time low of 43.6 in February. In March, the index recovered somewhat to 48.7. A PMIindex over 50 reflects an expanding manufacturing sector and a PMI index under 50 means the sector iscontracting. (Econews; NG 3)

OECD survey on pensions According to a report published by the OECD, Hungary ranks fifth among OECD countries in terms of the ratiobetween net wages and pension payments standing at 90.5%. The comparison shows a much less favorablepicture looking at the absolute value of pensions received during the pensioners lifetime, where Hungary is 27thwith $55.000 versus the EU average of $200.000, the report states. (NG 1) A.K.

No layoffs in public sector Despite the government’s decision to reorganize the public sector, no massive layoffs are expected, said agovernment spokesman to Világgazdaság. There is no need for a central layoff program as the number of employees has been gradually decreasing: since last November, there are 9000 fewer public sector employees.(Vg 5) E.C.

PoliticsMemorial to Swiss diplomat inaugurated A memorial to former Swiss consul Carl Lutz, who used his consulate to give refuge to over 2,000 HungarianJews facing Nazi death camps, was formally opened yesterday. Lutz saved thousands more around the countryby issuing documents protecting Jews from deportation and Arrow Cross regulations. ‘While saving the lives of thousands by risking his own life Lutz saved the honor of the Hungarians as well,’ Chancellery Minister Péter Kisssaid at the opening ceremony. (MTI)

Saudi ambassador to return to Budapest

The Saudi foreign affairs spokesman stated on Sunday that Saudi Arabia’s ambassador to Hungary, FaisalHasem would soon return to Budapest, the internet page of Arab News daily reported yesterday. Saudi Arabiasaid it would fully restore relations with Hungary and end the diplomatic tension between the two countries, thedaily said. Saudi Arabia recalled its ambassador from Hungary last February, following a remark by Prime Minister Ferenc Gyurcsány the Saudis had found offensive. The prime minister repeatedly voiced his apologies for hisremark referring to Saudi football players as ‘Arab terrorists.’ (MTI; Nv 2, MH 8, Nb 8)

Larger opposition party MP acquitted of forgery A Budapest district court yesterday acquitted larger opposition Fidesz party MP Ferenc Papcsák of the charge of forging personal documents. However, former government commissioner Zoltán Sík was fined Ft 100,000 andlawyer Zoltán Ormos was fined Ft 115,000 for forging personal documents. The prosecutor appealed the court’sdecision to acquit Papcsák and Sík appealed against the fine. According to the charges, Ormos and Papcsák,who both worked as lawyers at the time, submitted forged documents proving that they had completedcommissions. (MTI; Nv 3, Nb 4, MH 6)

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DomesticUniversity of Debrecen to turn to courtThe University of Debrecen is planning to sue the Norwegian television network for libel, announced GyörgyParagh, the Dean of the Faculty of Medicine. The university’s internal investigation concluded that the organsdepicted in the report were not from the anatomy department. Prof. Miklós Antal the suspended head of theanatomy institute was reinstated in his position Paragh said. (Nv 16, MH 7) A.K.

Horseshoes warn of danger

Magnetic horseshoes warning of danger spots are to be installed in the asphalt in roads: 371 in Fejér county, 350in Veszprém county, and 165 in Komárom-Esztergom county. The warning system, known as Comguard, wasinvented by Sándor Hédl of Zirc in the early 90s and has been further developed so that the technology is cheapand can be widely used. The magnetic horseshoes, working on the barcode principle, are hidden in the asphaltand able to store and transmit information without any external energy source. The signals they transmit can beeasily interpreted by a decoder installed in a motor vehicle, thus indicating to the driver that there is a stop sign, arail crossing or a roundabout to come. The technology is under international patent and the expected cost of buying and installing a decoder into a car is Ft 14 000. (Nb 6) E.C.

StocksBUX Close: 16495.01 Change: +117.27 (+0.72%)Stock Closing price Daily change (%) Average price VolumeMOL 16,020 -0.5 16,033 198,745

Matáv 882 2.6 871 506,860OTP 6,067 0.9 6,068 481,184Richter 23,905 0.4 23,995 8,626Egis 15,220 -1.5 15,439 6,537 Antenna 4,590 0.4 4,611 37,082TVK 5,345 0.1 5,286 736Rába 700 0.7 689 430Budapest Stock Exchange

Exchange RatesFIXED MIDDLE RATE In forintsMay 2, 2005 National Bank of Hungary

EUR 1 252.25USD 1 196.09GBP 1 373.22CHF 1 163.79JPY 100 186.11CZK 1 8.27PLN 1 59.06

Weather Tomorrow: showersHigh 22°C (72°F)Low 11°C (51°F)

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04 May 2005BusinessGov’t gets stricter on travel agentsThe government has amended the decrees on travel agencies to protect passengers and adhere to EUguidelines. According to the changes, which are effective from May 13, travel agents must deposit 3% of their previous year net revenue, but at least Ft 500,000, to cover damages or justified claims of passengers. To datethere has been no lower limit to the deposit and some travel agents were able to present only a few thousandforints. The other major change is that passengers buying a trip into a country that is not recommended by theForeign Ministry as a destination will be allowed to reclaim their money or choose a safer destination if theychange their mind. (NG 3) M.K.

Gyulai meat processors to be soldMeat processing plant Gyulai Húskombinát (GYH) Rt is expected to be the next victim of the Hungarian meetindustry, which is being centralized in the hands of the 3 major meat processors - Délhús-Pick Group, CarnexGroup, and Debrecen-Hús Group - with an estimated turnover of Ft 65 billion, Ft 45-55 billion, and Ft 35 billion-Ft40 billion, respectively. GyH’s last year revenue was Ft 13 billion-Ft 14 billion, ranking 5th. According to GyHmajority owner HAGE Rt, the company may have to be sold as a result of market share loss and liquidityproblems. According to Világgazdaság information, GyH is planning on stopping its 180,000 yearly capacityslaughter line. (Tue Vg 13) E.C.

Citigroup-Deutsche Bank wins tender

Citigroup Global Markets Limited and Deutsche Bank AG have been picked in a tender to organize Euro 2.5billion-Euro 3 billion in financing for State Motorway Management Rt (ÁAK). Parliament passed an amendment tothe Motorways Act in March giving state-owned ÁAK the responsibility of financing the construction and operationHungary’s network of motorways, moving the cost off-budget. ÁAK invited 11 banks to participate in the tender. If ÁAK fails to negotiate a satisfactory agreement with Citigroup and Deutsche Bank, it will start talks with Lehmanbrothers, which was ranked second in the tender. Calyon was ranked third. (Econews; Nv 5)

NABI reaches wage agreementThe management of busmaker NABI Rt has reached a wage agreement with its workers after five weeks of negotiations, the company announced on the website of the Budapest Stock Exchange yesterday. NABI wouldprovide no further details to MTI. Workers held an 8-hour strike on Friday. (Econews)

Erste Bank profit 4.4% lower under IFRSErste Bank AG lowered its 2004 profit by 4.4% to comply with changes required by International Financial

Reporting Standards. Net income for 2004 was restated as Euro 520.8 million, the bank said in an e-mailedstatement. Last year’s earnings per share were restated to Euro 2.18. IFRS rules require Erste Bank to changethe way it accounts for its securities portfolio, and reduced profit at the business by Euro 27.9 million last year, thelender said. (Bloomberg)

Synergon faces anti-trust investigationHungary’s anti-trust regulator started a probe into whether computer services company Synergon Rt and three of its rivals formed a cartel to bid for a contract with Paks Nuclear Power Station Rt, Világgazdaság said, withoutciting anyone. Synergon said it did not engage in any wrongdoing, the newspaper reported. The company’sshares fell Ft 22, or 4.2%, to Ft 501 on the Budapest Stock Exchange yesterday. (Bloomberg)

TV2 earns Ft 1.2 bln from Megasztár Commercial TV channel TV2 has earned a total of Ft 1.2 billion through its music talent show Megasztár, whichhas just come to an end, commercial director Zoltán Várdy announced. The revenue came through text-message

votes over several rounds of the competition, as well as a Megasztár book with a print run 10,000, a CD featuringthe competitors of the show and other merchandising articles. TV2 sold the 10,000 tickets for the last show inPapp László Sports Arena in two weeks. The last few rounds were watched by 800,000 people from the 18-49age group. (NG 7) M.K.

Asbestos still available illegallyWhile a ban on the production and sale of materials containing asbestos took effect January this year and thelong-delayed campaign to replace asbestos in insulating materials used in prefabricated residential houses andpublic buildings put up between 1960 and 1980 finally kicked off last year, more and more reports of illegalvending are being registered with the authorities, according to the Environment and Water Ministry. Asbestos,which was used widely during the 60s-80s for insulation until it was banned in 1988, is still present in some200,000 sqm of insulation. (Nv 12) S.F.

Employers to be jailed for illegal labor

The government plans to amend the penal code and introduce prison sentences of up to eight years for employers who regularly fail to pay health insurance contributions and other taxes on their employees,government spokesman András Batiz said. Many employers employ people without a work contract or only with a

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fake contract, Batiz said. Last year approximately 200,000-300,000 people had temporary jobs, but only 132,000of them were reported legally, Batiz said. (NG 3) M.K.

MKB launches Hozamvadász open-end fundThe Hungarian Foreign Trade Bank (MKB) Rt has launched a new open-end investment fund calledHozamvadász. The new fund will not operate with the traditional share, bond or other base categories, but willactually invest into the broadest possible range of assets, from shares through bonds to foreign currencies. Thesales commission of the fund will not be higher than Ft 500, no matter how much money is invested and themaximum annual charge of the fund manager may not be higher than 2.5%. (NG 11) M.K.

ABLON opens malls outside capital in autumnReal estate developer ABLON Kft announced yesterday it has started building two strip malls, in Dunakeszi, northof Budapest, and in Soroksár, just south of the capital. The malls will cost a combined Euro 44 million to build. ABLON has already rented out 40% of the shops in the malls and is in talks to rent out another 40%. Amongbusinesses which have signed contracts to rent spaces in the malls are a fitness centre, a restaurant and abowling alley. The mall in Dunakeszi has 20,000 sqm of retail space and the one in Soroksár has 12,000 sqm.Both structures will be completed in autumn of this year. Ablon is owned by Immoconsult GmbH, a real estateproject financing company owned by Austria’s Volksbank. (Econews)

KDB Bank Hungary to pay no dividendKDB Bank Hungary Rt will put all of 2004’s after-tax profit of Ft 1.292 billion into reserves, the bank announcedyesterday. Including the retained earnings, KDB Bank Hungary’s net assets increased to Ft 14.3 billion. KDBBank Hungary announced when it purchased Daewoo Bank Hungary Rt in 2002 that it would reinvest all of itsprofits for five years. KDB Bank Hungary also anticipates another capital raise from its owner, the KoreanDevelopment Bank, in 2006. The bank ended 2004 with registered capital of Ft 8.82 billion. KDB Bank Hungaryhad total assets of Ft 79.33 billion at the end of 2004, 38% more than a year earlier. At the end of 2004, KDBBank Hungary’s stock of corporate loans was Ft 32 billion with retail loans of Ft 19 billion. KDB Bank Hungary willopen a fifth branch in Budapest in the second half of 2005. (Econews; NG 4)

KDB Bank sells investment arm to Buda-CashKDB Bank Hungary Rt announced yesterday it will sell its investment arm, with 970 clients and a Ft 8.8 billionportfolio, to brokerage Buda-Cash Brokerage Rt. The transaction will be completed eight days after it is approvedby financial market regulator PSzÁF. The heads of KDB Bank and Buda-Cash Brokerage said the costs of thetransfer will not be passed on to clients. Also, clients will enjoy the same conditions offered by KDB Bank for atleast three months after the sale. (Econews; NG 12)

Hungarotherm fair opens

The 3rd International Hungarotherm Trade Fair has opened its doors to visitors. The five-day showcase isfeaturing over 300 exhibitors from fifteen countries this year with a wide variety of heating, ventilation, air-conditioning technologies and sanitation solutions from Hungary and abroad on display. This year for the first timethe biennial trade fair is organized independently of the Construma construction fair. (Nv 5) S.F.

Hungarians shy of restaurants - surveyFast-food chains in the country are not popular according to the Eating Habits 2005 survey which shows that 83%of the respondents disapproved them and 57% had never even crossed the doorstep of a McDonald’s. Theprospects of traditional restaurants scored no better results either, the survey showed that 80% of those polledconsider eating out a waste of money and almost half of them never frequented a restaurant at all. Hungariansenjoy cooking at home, find eating out a waste of time and are satisfied with their weight, according to the study,released by the market research firm GfK Hungária Rt yesterday. (MTI)

Szeged train station to be revitalized

A consortium of Délépíto Rt and Ornament 2000 Kft started the renovation of the Szeged train station and itsservice facilities yesterday. The station will remain in operation during the revamp. As a result of MÁV Rt’s publicprocurement tender, the consortium won an assignment worth Ft 980 million. The renovation is expected to befinished by late 2006. (Vg 13) E.C.

Mafilm needy of capitalState Privatization and Holding (ÁPV) Rt and Hungarian Motion Picture Public Foundation (MMK) are stilldebating the future of the two movie companies Mafilm and Filmlaboratórium, as discussed during aParliamentary committee meeting yesterday. According to ÁPV Rt CEO Márton Vági, both companies weresubsidized with a sum of Ft 400 million over the past 5 years to help revitalize them. Since the subsidy injection,Filmlaboratórium has been operating successfully, but Mafilm still needs Ft 3 billion-Ft 6 billion for development. ÁPV Rt recommends privatization. According to MMK CEO Ferenc Grunwalsky, capital should only be injectedinto Mafilm under the guidance of the majority owner MMK, to prevent it slipping out of Hungarian film industry

control. (Vg 4) E.C.

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Ft 1.5 billion available for cross border cooperation Almost Ft 1.5 billion is available for cross-border cooperation projects, mainly to promote tourism and developenvironmental protection along the Hungarian-Romanian border, a regional development company official told aconference in Gyula, south-eastern Hungary, yesterday. A total of 18 projects will receive funding under the PhareCBC program for the development of the economy and infrastructural networks for environmental protectionlaunched in 2003, Magdolna Kalapáti of the Hungarian Regional Development and Urban Development Companysaid. The projects to be financed by Phare CBC include setting up touch-screen terminals at the main touristsights in Szeged, the installation of ultrasound water yield measuring devices on the River Körös and themodernization of communication devices to improve flood prevention. (MTI)

Economics7.1% unemployed in Q1The unemployment rate reached 7.1% in the first three months of 2005 - 1% higher than in the same period of lastyear, the Central Statistics Office (KSH) reported. According to the KSH, 54% of the 15-74 age group was presenton the labor market. The number of employed people was 3.871 million on average in January-March, 21,000less than a year before, while the number of unemployed was 297,000, which is 45,000 more than a year before,KSH said. Almost 44% of Hungarian unemployed people have been looking for a job for longer than 12 months,KSH reported. (NG 2) M.K.

2-month foreign trade deficit revised downwardsHungary’s foreign trade deficit amounted to Euro 467.6 million in Jan-Feb as against Euro 368.4 million in the

same period of 2004, the Central Statistics Office (KSH) reported yesterday. The deficit is slightly less than thepreliminary figure of Euro 478 million reported on April 8. Jan-Feb exports were worth Euro 7,038.2 billion, up10.4% in twelve months. Imports were worth Euro 7,505.8 billion, up 11.3% yr/yr. (Econews; MH 11)

PoliticsHungarian differs from EU on Ukraine, BalkansHungary’s position on Ukraine and the Balkans is not identical to the majority of EU member states, ForeignMinister Ferenc Somogyi said yesterday. Hungary would like the EU to provide Ukraine with a Europeanperspective without limiting its future options, Somogyi told Parliament’s European affairs committee. ‘Ukraine’songoing radical democratic transformation and internal stability requires the EU to send an unambiguouslypositive message to Ukrainian policy-makers and society, going beyond the original goal of privilegedpartnership.’ Informing the committee about the EU’s neighborhood policy, the minister said Hungary’s approachto the Balkan region also differed from that of the EU mainstream. ‘It is in Hungary’s best interest that as many

countries of the region as possible meet the entry criteria and join the EU and NATO as soon as possible,’Somogyi said, pressing for the EU to resume accession talks with Croatia. (MTI)

DomesticDebrecen airport to receive first scheduled flightThe first scheduled flight will land at Debrecen Airport, Hungary’s third international airport, on May 9 and fly toMunich on the next day, a board member of the airport’s operator told the press yesterday. The operators expecttraffic at the airport to pick up by the end of the summer, László Takács said. The airport is planned to handle3,000 passengers this summer, 10,000 by the end of 2005, and 30,000 in 2006, Takács added. The Debrecen-Munich service is operated jointly with the German airline OLT. Tickets range from Euro 199 to Euro 815 a piece.Debrecen airport is also in talks with Lufthansa about offering connecting flights for long-haul flights. Debrecenairport is Hungary’s third international airport after Ferihegy in Budapest and Sármellék, near Lake Balaton inwestern Hungary. (MTI)

Fertö Lake area gets water treatment plant A Ft 5 billion investment is soon to be started in the Sopron region to reconstruct and modernize the Sopron water treatment plan. Using the by-product of dross, the sewerage reconstruction will enable the region to gain biogas,which will fully supply the plant with energy, and to produce compost material, which is used in agriculture. The21,000 cubic meter-per-day capacity plant will manage to reduce the odour to a minimal level. The clean water will then be let back to the Ikva River. Over half of the investment costs have been supplied by the EU ISPA fund,40% is covered by the state, and 10% will be contributed by the Sopron municipality. (Nb 7) E.C.

MTA chairman re-electedIncumbent Szilveszter Vizi E. was yesterday re-elected as chairman of the Hungarian Academy of Sciences(MTA) at the body’s general meeting yesterday after winning the overwhelming majority of the votes. The 69-year-old brain researcher has received several state decorations and has been nominated this year for the Nobel Prizefor the second time. He has been a member of MTA for nearly two decades. The meeting also named AttilaMeskó as MTA’s new chief secretary, replacing Norbert Kroó in the post. Kroó will act as MTA’s deputy chairmanin future. (MH 7) S.F.

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StocksBUX Close: 16,496.37 Change: +1.36 (+0.01%)Stock Closing price Daily change (%) Average price VolumeMOL 16,005 -0.1 16,018 158,712Matáv 867 -1.7 866 2,017,766OTP 6,021 -0.8 6,050 495,385Richter 24,785 3.7 24,374 39,778

Egis 14,905 -2.1 15,198 9,871 Antenna 4,595 0.1 4,596 22,992TVK 5,390 0.8 5,349 6,404Rába 680 -2.9 680 9,084Budapest Stock Exchange

Exchange RatesFIXED MIDDLE RATE In forintsMay 03, 2005 National Bank of HungaryEUR 1 251.60USD 1 195.58GBP 1 370.31

CHF 1 163.06JPY 100 186.07CZK 1 8.29PLN 1 59.21

Weather Tomorrow: rainHigh 16°C (61°F)Low 11°C (51°F)

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05 May 2005Business

Steps to whitewash black economy

Prime Minister Ferenc Gyurcsány yesterday announced further measures to tax the country's extensive blackeconomy as part of his "Hundred Steps" program launched last month. The prime minister noted that untaxedlabor is especially widespread in the construction industry, the tourism sector and the catering industry. The

government therefore plans to oblige restaurants and other catering businesses to indicate the tip on their invoices, Gyurcsány said. (MTI; Wed Vg 1, NG 3, MH 3, Nb 2, Nv 4)

Pannonplast may buy Bulgarian company

Hungarian plastics maker Pannonplast Rt, which supplies Groupe Danone with yogurt cups, plans an acquisitionin Bulgaria early next year to help bolster sales. "In Bulgaria we are eyeing two companies, though we are not intalks yet," said Chief Financial Officer Dénes Gyimóthy said yesterday. "If the talks don't lead anywhere, our onlychoice would be to build a factory there, maybe as early as the fourth quarter of this year." Budapest-basedPannonplast is looking to expand in Bulgaria and Romania, ahead of the countries' entry into the EU in 2007.(Bloomberg; NG 1)

MÁV aims for fast tender completion

Hungarian railway company MÁV Rt said yesterday that it aims to complete a disputed tender for suburban railvehicles as soon as possible. MÁV made the announcement after the Public Procurement Arbitration Committeeon Tuesday declared the result of the tender null and void. Bombardier and the consortium of Stadler andTranselektro were competing for a contract to supply MÁV with 30 light suburban rail vehicles with an option tosupply a further 30. After MÁV announced Stadler-Transelektro the winner by a razor-thin 7 of 1,000 points onMarch 18, Bombardier contested the evaluation of the bids and appealed to the procurement arbitration authority.(Econews; MH 11, Wed Vg 13)

Nokia, Siemens to supply Vodafone 3G

Vodafone Hungary Rt has announced that it selected suppliers for its 3G network. The 3G radio network andrelated services will be provided by Siemens Communications. Nokia Oyj has concluded an agreement for thesupply of the complete 3G core network and related services. Nokia has been Vodafone Hungary's sole supplier of GSM infrastructure since it began developing its network in 1999. (BBJ Online; Nv 5)

Aussie telco tipped for Antenna bid According to business daily Világgazdaság, the Australian Macquarie Communications Group (MCG) is rumoredto be among the throngs of potential bidders for the 75% state-owned stake in broadcasting company AntennaHungária Rt. MCG, whose European subsidiary Ntl:broadcast is the UK's leading broadcaster, is not yet presentin the CEE region. The Macquarie Group manages a corporate and infrastructure portfolio worth Euro 15 billionworldwide. (BBJ Online)

Synergon confirms Cisco split

Systems integrator Synergon Rt yesterday acknowledged earlier news reports that Cisco Systems InternationalBV. has terminated their partnership agreement pending 90 days because Synergon signed a contract todistribute the IT solutions of its Chinese rival Huawei Technologies Investment Co. According to market analysts,the decision is unlikely to affect. Synergon's long term relationship with Cisco, who has recently entered into talks

with the US networking equipment & network management supplier on a future cooperation between the twocompanies. (NG 8) S.F.

Richter to build USD 62 Mln facilities

Gedeon Richter Rt, the largest drug maker in the new EU countries, said it will build two research facilities worthFt 12 billion. The Budapest-based company expects to finish setting up a research laboratory in 2006 and to startusing a new chemical research building in 2007, the company said today in an invitation letter to the ceremonyannouncing the investment, which will take place on May 9th. (Bloomberg)

Leniency for late record submission?

Union Insurance Rt has asked financial market regulator PSzÁF whether it may allow third-party compulsoryvehicle insurance policy holders who recently switched from a different company more time to transfer their insurance records. Under the law, drivers with third-party policies who switch insurance companies must submit

their insurance records from their old company within 90 days of the change. About 5,000 of Union Insurance'sclients have failed to meet the deadline, CEO Miklós Zsoldos said yesterday. In theory Union Insurance could

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charge these clients premiums for the highest-risk drivers, costing an average-rated driver an extra Ft 83,000 thisyear, Zsoldos said. (Econews; Nv 1)

TNT reports revenue up 14% in 2004

TNT Express Worldwide, the Dutch express delivery and logistics company, recorded revenue of Ft 7.89 billion inHungary last year, 14% more than in 2003 and well over the 10% average expansion rate of the express freightmarket, Marton Jarosi, who manages TNT Express's Hungarian unit, said yesterday. Jarosi said TNT ExpressWorldwide Hungary Kft paid its parent company a dividend from last year's profits, but would not provide a

specific figure. He said that the company would spend Ft 655 million on investments in Hungary this year. TNTExpress is market leader in Hungary controlling 40% of the express forwarding market. (Econews; NG 5)

Ft 5 mln fine for Volánbusz

The Public Procurement Arbitration Committee (KDB) has imposed a Ft 5 million fine on Volánbusz Rt, thenational bus transport company, in connection with a construction tender to upgrade its central station in Népliget,Budapest. Following a public procurement tender, Volánbusz signed a contract with Hídépíto Rt in Sept. 2004, torefurbish and expand its station for Ft 527 billion, however, later a number of technical adjustments had to bemade, to which end Volán contracted Hídépíto again, this time for Ft 173 million, without calling a public tender,which KDB said runs counter to competition regulations. (NG 15) S.F.

MTV's upcoming HQ tender

Hungarian Television (MTV) Rt will announce the construction tender of MTV's new headquarters building in May,chairman of the board László Czeglédi said. Parliament authorized MTV recently to have its new HQ built. Thewinner of the tender will be announced in September or October and construction works can start at the end of this year, Czeglédi said. The Ft 21 billion HQ will be built in Dist. 3, Bojtár utca in a public private partnershipsystem. (Nv 3) M.K.

ÁPV to sell Budapest Airport soon

State Privatization and Holding ÁPV Rt plans to announce the privatization tender of Budapest Airport Rt in thenext few weeks, member of ÁPV's board István Salgó said. Budapest Airport's privatization is included in ÁPV'sbusiness plan for this year, the company's privatization consultant has already been selected, Salgó said. ManyWestern European airports have been privatized from London to Vienna, but Budapest Airport will be the first inthe region that goes to a professional investor, Salgó said. (Nv 5) M.K.

New leadership for Hungarian Tourism

Zoltán Somogyi, president of National Tourism Office (MTH) has resigned from his position as president of thetourism development agency, Hungarian Tourism Rt. György Karikás, chairman of the supervisory board has alsohanded in his resignation. István Kolber, minister without portfolio in charge of tourism has accepted theresignations and also decided on further personnel changes on 1st May. (Vg 5) M. A.

EHEP pays no dividend

Hungarian energy company First Domestic Energy Portfolio Rt (EHEP) pays no dividend for 2004. The companyhas produced a Ft 13.87 million loss at Ft 24.3 million in revenues last year. At the AGM, which had a 68%participation rate, one of the shareholders, Kaposszerdahely's local government suggested the liquidation of thecompany as the proposed goals have not been achieved since its establishment in 1996. (Wed Vg 17) M. A.

Foreign owners of co's get 16% more

Companies listed on the Budapest Stock Exchange will pay combined dividends of Ft 143 billion to foreignshareholders this year, about 16% more than a year earlier. The rise is largely the result of bigger dividends paidby OTP Bank Rt and oil and gas company MOL Rt. Both companies paid twice as much out of profits this year aslast year. As for the bourse's other two blue chips, telco Matáv Rt paid exactly the same dividend as last year (albeit out of profit reserves) and drug maker Richter Rt paid a 13.6% bigger dividend. Foreign investors will take83% of all dividends paid out by Hungary's listed companies this year. (Econews)

Philip Morris - new delivery system

Philip Morris Hungary Kft has finished setting up its own Ft 2 billion direct sales network, CEO Árpád Könye saidtoday. Philip Morris decided to stop selling its cigarettes through wholesalers last year and start building a directsales network. Philip Morris now employs 300 people to distribute its cigarettes, including 50 in Eger, the citywhere the company shut down its cigarette factory at the end of last year. Philip Morris laid off 348 people after the shutdown, but many started working as distributors for the company. The company runs a fleet of 200 vehicles

to deliver the cigarettes. (Econews)

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Economics

MKK to handle tax debt collection

After a 3-year hiatus, the National Tax Office's (Apeh) debt collection activity is due to be directly conducted againby the Hungarian Asset Management Rt (MKK), according a government proposal currently under considerationby Parliament. As of 2002, debt collection for the tax authority has been outsourced through public tenders. Themove is expected to enhance debt collection efficiency by cutting out the often lengthy tender procedures. Theproposal would also allow the collector to initiate civil proceedings against the debtor. (NG 1) S.F.

Járai: No more room for fast paced rate

Hungary's central bank governor Zsigmond Járai has said the central bank has no room to continue cutting thebase rate as quickly as it has over the past year. The central bank reduced the base rate from 12.5% in March of 2004 to 7.50% by April 2005. Speaking to a joint meeting of the British Chamber of Commerce and the CanadianChamber of Commerce yesterday, Járai warned that Hungary must make the necessary economic reforms if itaims to adopt the euro by the 2010 target date. Járai said the current account deficit would be 8-9% of GDP thisyear, mainly because of the big general government deficit. (Econews; NG 3)

Less cash for crisis wine distillation

A reform plan by the European Commission is to limit financial assistance provided for crisis wine distillation, thusputting an end to the problem of excess wine and the wine sector's generous financial assistance. Crisisdistillation- the transformation of excess wine into fuel and industrial alcohol- is necessary due to last yearsoverflowing vintage of 450-460 million liters and the previous years' retained supply. Hungary is expected to applyto the EU for financial assistance of Ft 50 per liter on average for 25 million liters of wine. (Wed Vg 3) M. A.

Diesel price - no reduction

The Economy Ministry will not reduce the excise tax of Diesel oil, as it was demanded by the representatives of freight forwarders in Hungary. Freight forwarders earlier threatened the government that they would fill up truckswith Diesel abroad, causing serious tax losses in the government budget, if the government did not reduce pumpprices. According to press information, the government rather mulls over giving a subsidy to freight forwarders for the high price, rather than changing the excise tax, however, this may violate EU competition rules. (MH 1) M.K.

Hungarian wins Romanian twin tender

First amongst the Hungarian civil service institutions, the Central Financial and Contracting Unit (CFCU) won the

European Union's twinning tender as an independent applicant. Within the euro 800,000 tender Hungarianprofessionals are to prepare their Romanian colleagues for joining the EU. The twinning program was establishedin 1998 for the candidate states by the European Commission in order to facilitate smooth joining. (Wed Vg 3) M. A.

Results of Lake Balaton development outlined

The ministers of the environment and regional development outlined the results of development in Lake Balatonregion at the government session yesterday, a government spokesman said after the session. The water qualityof the lake has become an important issue for the first time since the late sixties, András Batiz said. He referred tothe current water levels in the lake following recent heavy rains and said that re-channeling waters to the Sio-channel in the southeast of the lake will take place only if the levels rise to 110 centimeters. (MTI)

Politics

Extra constitutional judgeSpeaker of the Parliament Katalin Szili said Parliament could have more chances to elect four constitutional judges than three in September. Currently the Constitutional Court operates with eight members instead of eleven, as parliamentary parties could not come to an agreement about the third candidate. The mandate of judge András Holló will expire in November, but Parliament could already approve his successor in September, thusapproving two people from the right and two from the left, Szili said. (Nv 3) M.K.

Fidesz demands resignation of state secretary

The main opposition Fidesz party yesterday called upon András Tóth, state secretary of the civilian state securityservices, to resign as the protocols containing the tapped phone calls of Attila Kulcsár, chief suspect in amultimillion-dollar embezzlement case, had been shredded. "Tóth was aware of the destruction of documents.This fuels the suspicion that the protocols of the tapped phone calls contained sentences and pieces of information implicating PM Ferenc Gyurcsány and his government," Fidesz MP Ervin Demeter said. Demeter served as minister of civilian security services in Viktor Orbán's center-right government until 2002. (MTI)

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Domestic

Bp hosts conference of EU House Speakers

Parliament Speakers of EU countries will hold their annual conference for the first time in Budapest on May 6-7,the Parliament's press office reported yesterday. This year parliament speakers from 49 countries including EUaspirants and the west Balkan countries have been invited to attend the annual conference. Participants willdiscuss the expanding role of the national parliaments, the experiences of the ratification process of the EUConstitution and the integration of the west Balkan countries. (MTI)

Hung/Rom/Irish municipalities'joint bid

Three local councils of Hungary, Romania and Ireland have submitted a joint bid with the EU's Interreg economiccooperation program, Hungarian and Romanian officials told the press after their meeting in Nyíregyháza (EHungary yesterday. The joint project of the eastern Hungarian Szabolcs-Szatmár-Bereg county, the Irish district of Fingal and the Romanian Maros counties will focus on improving the training of professional workforce andadopting the Irish educational reform experience, the Hungarian county head László Gazda said. (MTI)

Stockwatch

BUX Close: 16414.54 Change: -81.83, (-0.50%)

Stock Closing price Daily change (%) Average price Volume MOL 15,780 -1.4 15,845 503,894 Matáv 866 -0.1 866 1,823,001 OTP 6,020 0 6,078 725,750 Richter 24,805 0.1 24,749 32,124 Egis 14,605 -2 14,725 8,718 Antenna 4,600 0.1 4,592 54,877 TVK 5,350 -0.7 5,325 246 Rába 665 -2.2 670 8,247

Exchange

FIXED MIDDLE RATE In forints

May 4, 2005 National Bank of Hungary EUR 1 250.89

USD 1 193.80 GBP 1 368.10 CHF 1 163.06 JPY 100 185.21 CZK 1 8.28 PLN 1 59.17

Weather

Tomorrow: rain

High 15°C (59°F)Low 8°C (46°F)

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06 May 2005BusinessGrain surplus may go to PortugalHungary could send 450,000 tons of its vast grain surplus to drought-stricken Portugal, with the EU subsidizingtransport costs, Minister for Agriculture and Regional Development József Graf said yesterday. Fülöp Benedek,state secretary at the ministry, negotiated the transfer of the grain in Portugal last week, the minister said. Graf said Hungary has capacity available to store 3.5 million of intervention grain, and contracts to store 2.2 milliontons have already been signed. (Econews; NG 1)FHB’s Q1 profit increasesLand Credit and Mortgage Bank Rt (FHB) said first-quarter profit rose 51 % as new clients lifted revenue and thebank curbed costs. Net income at the Budapest-based bank, rose to Ft 2.25 billion from forint 1.49 billion a year earlier, the company said in a statement. Net interest income rose 39 %, while costs were up 10 %. FHB mayhave to control costs further after the government cut housing subsidies at the end of 2003, stifling demand for borrowing in the country of 10 million people. The mortgage market expanded 27 % last year, less than a third of the pace of the previous 12 months, and is slowing again in 2005, FHB said. (Bloomberg; NG 11, MH 12, ThursVg 13)

OTP offers bridging loan for farmersOTP Bank Rt said yesterday that it would start offering bridging loans to farmers waiting for EU land-basedsubsidies. Farmers will be able to borrow up to 80% of the value of their EU subsidies and state top-ups under the

scheme. This year farmers are expected to be eligible for Euro 86.2 per hectare in EU financing and a Ft19,000state top-up. Farmers must borrow at least Ft 500,000 under the loan scheme, which means they must bereceiving EU subsidies and state top-ups for at least 18 hectares, according to OTP Bank’s calculations. OTPBank expects to grant Ft 30 billion worth of the loans. (Econews; NG 5, Nv 5, MH 12, Nb 13)

VCP : TVK needs capital raiseThe capital of Hungarian chemicals company TVK Rt should probably be raised, because of its high level of debt,Heinrich Pecina, the head of Vienna Capital Partners (VCP), which holds a 31.39% stake in TVK, said yesterday.TVK had about Ft 91 billion in short- and long-term liabilities at the end of 2004. When asked whether VCPintends to sell its stake in TVK, Pecina said his company could sell the shares this year, or in five years. The salewill depend on when TVK finishes expanding its capacity—which has added to its debts—and start generatingcash, he added. Pecina noted that VCP has already sold a 2.8% stake in MOL Rt, TVK’s other big owner.(Econews; NG 4, Nv 5, MH 11)

Privatization of FHB tender calledThe State Privatization and Holding Company (ÁPV) said yesterday it would publish today a public single-roundtender to select an advisor for Land Credit and Mortgage Bank’s (FHB) privatization. The advisor will beresponsible for organizing the sale of a 50%-plus-one-share stake in the bank. The sale will aim to achieve thehighest revenue possible and ensure FHB’s market position, allowing the bank to continue its strategy and retaina stable ownership structure, according to ÁPV’s statement. (Econews; NG 11, Nv 5)

Hormann Hungária turnover of Ft 4.5 blnGerman-owned Hormann Hungária Kft, the market leader for garage doors and industrial doors, recordedturnover of Ft 4.5 billion (not including VAT) in 2004, managing director László Szujó said yesterday. This year thecompany expects a 5% revenue rise, helped by increased industrial demand. Last year, Hormann Hungária’srevenue was unchanged from 2003 because of stagnation on the home construction market. About 45% of Hormann’s revenue last year came from sales of garage doors, 25% came from sales of industrial doors and 30%

from sales of parts and services. Hormann Hungária spent Ft 250 million to expand its warehouse outside of Budapest from 3,200sqm to 5,500sqm. (Econews; NG 5)

Interior decorating plaza opensMax-City the first interior decorating shopping mall in Hungary opened its doors in Törökbálint. The 30,000 sqm.site was built by Swiss-Hungarian owned Tisri Rt at a cost of Ft 6 billion. The complex groups together 103 small-medium sized interior decorating firms, that ensures a varied selection of products, enabling Max-City to efficientlycompete with established rivals said Zoltán Disznós, Tisri CEO. (Nb 12) A.K.

Pannonplast Q1 loss narrows on cutsPannonplast Rt, said its first-quarter loss narrowed as the company’s new management cut costs. The loss wasFt 86 million, compared with a loss of Ft 405 million in the same period last year, the company said in an e-mailedstatement. Sales fell 11 % to ft 5.4 billion from a year ago, partly because Budapest-based Pannonplast has soldfour units, and the forint has strengthened. Cost of sales fell 6 % to Ft 4.2 billion. Pannonplast last year had its

third consecutive annual loss as slowing economic growth in Western Europe cut demand for products such astelevision sets and computer monitors. (Bloomberg; Thurs Vg 13)

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Master-Good opens plant in KisvárdaFood processor Master-Good Kft opened its poultry processing and packaging plant in Kisvárda yesterday.Master-Good invested Ft 650 million in the development of the site, which it recently purchased from bankruptcompetitor Hajdú-Bét Rt. The facility is the largest of its kind in Hungary with a capacity to process 14 millionchickens annually. The company expects to reach a 10-12% market share and turnover of Ft 17.5 billion this year said CEO László Bárány. (Vg Thurs. 12) A.K.

ACNielsen remains market leader

Market research firm ACNielsen Market Research Kft increased its turnover by 2% last year to reach Ft 1.63billion, which was enough to retain its position as market leader. The bulk of ACNielsen’s revenue came fromretail market research, over 85% of the total, but the most dynamic growth segment was consumer behavior research. (Vg Thurs. 11) A.K.

Dunaferr marks Euro 275 mln for developmentsSteelmaker Dunaferr Rt plans to spend Euro 275 million on developments over the coming six years, Sushil Trika,Dunaferr’s recently-appointed CEO and member of the board, said yesterday. Of the total, Euro 140 million willspent on upgrading equipment and Euro 60 million will be used to introduce new products. Euro 75 million will beused for environmental and technology projects. The company will finance the developments from cash flow andloans. Dunaferr expects to see a 15% return on the investment over ten years, Trika said. Dunaferr will spendEuro 46 millin on investments this year, Euro 56 million next year and a further Euro 65 million in 2007. (Econews;Thurs Vg 11)

Playhouse franchise goes nationwideFirst Hungarian Child-park Kft is planning on building a nationwide playhouse network. After the 3 Budapest sites,the first such playhouse outside the capital has been recently opened in Pécs, and more are to follow soon inSzeged and Debrecen, which will be operating within a franchise system. The first such playhouse was opened in1998. The Pécs site is being rented, however, the investment cost Ft 30 million. These parks also claim toimprove childrens’ coordination and balance, since they mainly have corridors, ropes, and slides constructed inthem. It costs Ft 400 for 30 minutes, the daypass including two meals is Ft 2500. (NG 5) E.C.

Pannon GSM finedHungary’s Competition Office (GVH) has fined mobile services company Pannon GSM Rt, Ft 5 million for misleading advertising, GVH said yesterday. In an advertising campaign started in September 2004, PannonGSM failed to inform clients that reduced tariffs available under the company’s ‘By popular request’ packagewere, in fact, available only during certain times of the day, GVH noted in its announcement. Pannon GSM hasappealed the decision. (Econews; MH 2, NG 4)

Hungarotel finedHungarotel Rt has been fined for Ft 13 million by the Sopron Board of Directors of the NationalTelecommunications Authority (NHH) for limiting customers’ choice in selecting a service provider on the basis of their phone usage habits. The company imposed these limitations by only allowing customers to use thealternative providers in a package, and the prices of the packages, being well aware of consumer habits, weredetermined in a way that they did not offer real alternatives, NHH said. (NG 5, NV 5) E.C.

Hung-Rom 400 kV transmission lineHungary and Romania agreed on building a 400kV power transmission line between Békéscsaba and Oradea (WRomania) yesterday. The related agreement was signed by the Hungarian Electricity Works Rt (MVM) andRomania’s Transelectrica company in Budapest. The second transmission line connecting the two counties will becompleted by the first half of 2008. The 93-kilometre-long power lines will boost the two countries’ cross-border capacities in the region, Its construction will cost Hungary Euro 20 million and Romania Euro 30 million. (MTI)

EconomicsFM: combating untaxed labor serves allNew rules to be introduced in the building and catering industries to combat untaxed labor will serve the interestsof all law-abiding market participants, the finance minister said in Nyíregyháza yesterday. The planned changeswill eliminate the disadvantages suffered by those who comply with regulations and they are also expected toprevent the loss of tax revenues in the budget, János Veres said. PM Ferenc Gyurcsány said on Wednesday thatthe government plans to oblige restaurants and other catering businesses to indicate the tip on their invoices. Inaddition, the authorities will check whether all invoices related to material and labor costs are available beforeissuing permits for the use of newly built houses. (MTI; NG 3, Nb 3, Thurs Vg 5)

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Veres pledges spending cutsHungarian Finance Minister János Veres, who took office nine days ago, said he will curb government spendingto keep the budget deficit from breaching targets for a fourth year and stay on course to adopt the euro in 2010. ‘Iwould like Hungary to keep going along the path of gradual deficit reduction aimed at meeting the conditions of joining the euro zone,’ said Veres, 48, in an interview yesterday in Budapest. ‘The strict spending and wage policythat began in the summer of 2003 must be continued.’ (Bloomberg; Nv 5, MH 2)

Queues expected as tax deadline looms

The National Tax Office (APEH) announced that despite the extension of the tax return deadline to May 20 andthe creation of the possibility to submit returns electronically taxpayers are leaving returns submission to the lastminute, just as before. Until last weekend 1.15 million returns were filed leaving another million taxpayers, whowill crowd the post offices in the coming weeks. 60% of returns filed were prepared using APEH’s software, butonly 81 were submitted electronically. (Nb 11) A.K.

Forint volatilityForint has been showing major volatility: after last Friday’s 11-month record high, the Ft-Euro rate dropped backto 249. The strong movements can be explained by international reactions, yesterday’s escalation, for example,has been initiated by the fact that the number of ‘yes’ votes which the French cast on the European Constitutionhas gone up significantly. Despite such events, analysts do not expect the forint to go significantly stronger butvolatility to slowly settle down. (NG 1) E.C.

Health-care system to be reformed.

Despite PM Ferenc Gyurcsány not finding it timely last fall to reform the healt-care system, the goverment is nowkeen to make changes, accoding to Napi Gazdaság information. Proposals about the amendments are currentlybeing discussed, however, some say the resemblances to the Health-care Management System (IBR) developedby the Medgyessy era earlier are striking. The most important chage to be made is the introduction of the three-level health-care system, which aims to provide emergency care, maternity and child care, and public health careto everyone in their own right. (NG 3) E.C.

Joint tourism promotionHungarian Tourism Rt, national airline Malév Rt, Budapest Tourism Service Kht and Budapest Airport Rt start a joint campaign to promote Hungary abroad, Minister without portfolio for Tourism, István Kolber said. 11 worldfamous Hungarian sportsmen and women, artists and specialists will be on posters and advertisements in 21countries with a slogan ‘Talent for entertaining’. Last year’s campaign can be considered successful, the number of tourists visiting Hungary reached 12 million for the first time, the Minister added. (Nv 11) G.R.

Deficit figures out todayThe Finance Ministry is going to publish the four-months state budget deficit figures today. According topreliminary estimations about Ft 730 billion is expected, which is 71% of the whole year plan of Ft 1022 billion.This means that the deficit increased by an extraordinary Ft 244 billion in April. This is because the Tax Officepaid back about Ft 200 billion VAT-dues to companies, which was withheld in December. The Ministry’s planscontain slowing the pace of the deficit but some market analysts doubt that such plans can be fulfilled. (MH 3)G.R.

Project evaluation process to speed upIn the frameworks of the National Development Plan (NFT), there have been 18 160 project proposals submitteduntil March 31, 2005, 2100 of which have arrived in Q1. Signs show that the evaluation process has been spedup: 69% of the total proposals have already been processed, as opposed to the 55% of the 16 000 by the end of last year. For the 6257 successful projects, Ft 317.72 billion has been awarded, which is about 47% of the totalfinancial assistance secured for 3 years. (NG 4) E.C.

Several companies to fill potholesBudapest Municipality selected several companies to patch up potholes in Ft 400 million public procurementtender. The results were announced yesterday, the winners will carry out the operation for Ft7,200 - Ft 7,350 per sqm. The largest part of the work will still be done by Budapest Public Site Maintenance (FKF) Rt but because of the number of potholes further companies must be involved, vice-major Pál Vajda said. (Nv 4, MH 6) G.R.PoliticsOrbán: EU entry hinders ethnic kin tiesEthnic Hungarians in Vojvodina, Serbia, have found it more difficult to maintain ties with their mother-countrysince Hungary joined the EU a year ago, opposition leader Viktor Orbán said yesterday. ‘In the long term,Hungarians living in that north Serbian province will benefit from EU enlargement as this strengthened their mother-country. In the short term, however, ethnic Hungarians have become the losers of Hungary’s EUaccession,’ Orbán said. referring to the reintroduction of visa obligations and the difficulties of university studentsand other youth in entering Hungary. (MTI)

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09 May 2005Business

PM outlines new employment policies

Prime Minister Ferenc Gyurcsány, speaking at the governing Socialist party MSzP's national congress, outlinedtwo new policies concerning young people needing help to enter the job market for the first time and measures tocombat bogus employment contracts. Under the government's new Start program, entrants to the labor market

should pay just 15 % income tax in the first year rather than the current 34 %, while in the second year this shouldrise to 25 %, Gyurcsány said. Gyurcsány noted that while Hungary's level of unemployment is below the EUaverage, the number of people getting jobs for the first time was low and the jobless rate for young people worse.(MTI; NG 1, MH 1, Nb 2)

Richter Q1 net rises on East Europe

Gedeon Richter Rt said first-quarter profit rose 13 % as revenue picked up in Eastern Europe. The Hungariancompany said U.S. sales declined 40 %, and would probably fall this year. Net income rose 13 % to Ft 8.61 billion,or Ft 450 a share, from a restated Ft 7.59 billion, or Ft 404, in the year-earlier period, the Budapest- basedcompany said yesterday. Earnings were helped by a 54 % increase in Central and Eastern Europe sales. Thecompany, which expects sales to rise 10 % in dollars this year, is facing increased competition in the U.S.,analysts said. (Bloomberg; NG 7)

Contintl Teves wins GM/Toyota contractsCar parts manufacturer Continental Teves Hungary Kft has won contracts worth billions of Forints to producesensor clusters for General Motors and Toyota, Lukács Szalontay said on behalf of Continental. The Veszprém-based company will start the delivery of the three million car parts in a few months, Szalontay said. Continentalemploys almost 1,000 people in Hungary and the company projects a net revenue of Ft 55 billion and a profit of Ft10 billion for this year, Szalontay said. (Ng 4) M.K.

BorsodChem/Linde Ft 32 bln investment

Chemicals company BorsodChem Rt and industrial and medical gas maker Linde Gaz Hungary Rt will launch a joint Ft 32 billion investment in cooperation with the Economy and Transport Ministry, the minister János Kókaannounced. The high-tech investment will result in the creation of 100 new jobs. Test-production of the highlydeveloped industrial equipments may start as early as the end of this year, Kóka added. Additional details of the

investment will be published next week. (MH 2, Nv 3, Nb 12) P.O.Démász Q1 profit down on power costs

Electricité de France SA's Démász Rt unit, the biggest power distributor in Hungary, said first-quarter profit fellmore than expected as the government limited prices the company could charge to less than its cost increases.Net income at Szeged, Hungary-based Démász declined to Ft 1.055 from Ft 1.118 billion a year earlier, thecompany said in a statement today. The company was expected to earn Ft 1.1 billion, according to the medianestimate in a Bloomberg survey of five analysts. Profit margins shrank at Démász after Hungary in Februarycapped the price power suppliers can charge households. (Bloomberg; NG 7)

Gyermely wins lawsuit against Mary-Ker

Budapest Court of Appeal approved the decision of Budapest City Court in the lawsuit of pasta producer Gyermely Rt against Mary-Ker Kft. Gyermely launched the lawsuit, because Mary-Ker sold its Korona pasta in a

package that was almost identical with Gyermely's package. According to court decision, Mary-Ker must removeall Korona products from each shop in Hungary. As the lawsuit has been going on since 1998, Gyermely will alsodemand a huge financial compensation from Mary-Ker for dishonest market behavior over the years. (Ng 5) M.K.

Herukon to close, 600 laid off

Garment trade firm Herukon Rt closes its doors in Sátoraljaújhely, north eastern Hungary, laying off 600 people,chairman and CEO Csaba Pétervári announced Saturday. Several customers failed to pay to Herukon, owing thecompany some Ft 80 million by the beginning of this year. Meanwhile, Herukon's own debt has run up to Ft 70million. The company's management is mulling the relocation of production to Slovakia or the Ukraine, wherecircumstances are more favorable for a garment trade firm. (Nb 12) P.O.

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Tatabánya to build Ft 4 bln plaza

The municipality of Tatabánya, west Hungary, has given a green light to a Ft 4 billion investment to build acommercial and entertainment center in the city. The investor will be Bischoff Hungary Kft, which will build the25,000 sq.m. facility near the railway station. Besides shops, the plaza will host a multiplex movie, severalrestaurants, a bowling court, an Internet café and a wellness center. The plaza is expected to be finished bySeptember 2006. (Ng 17) M.K.

Le Belier Ft 1.5 bln new plantBV Hungary Metal Works Kft, majority owned by French aluminum conglomerate Le Belier, is planning to moveproduction from a downtown location in Szolnok, eastern Hungary, to the industrial park of the town, Deputy PlantManager András Dekovics said. The company will invest Ft 1.5 billion in a new plant; the general contractor for the construction is N+N Kft. An additional Ft 1.5 billion has been earmarked for production lines. If it were not for a15-year agreement with the local municipality in which the French group agreed to employ a staff of 400-450 inthe long run, the company would probably have chosen to move the plant to another Le Belier subsidiary inKikinda, Serbia, where labor costs are considerably lower, Dekovics added. (Vg 8) P.P.

MÁV may face penalty

Hungary may risk a full inquiry and a possible penalty of several billion forints because the Hungarian StateRailways Rt (MÁV) has violated principles of railway liberalization, according to a letter by Arnold Vinois, the EU'stransportation commissioner. Vinois pointed out that the local authorities should guarantee similar conditions for private and state-run railroad companies. Private railroad company Floyd Kft has appealed to the commissioner,claiming MÁV prevented Floyd's container train to reach its target in time, which resulted in a hefty loss for thecompany's Austrian client. Moreover, the Austrian client plans to make Floyd pay for its losses of around Euro40,000. According to the Economy and Transport Ministry, Hungary is prepared to give satisfying answers to allquestions raised by the commissioner. (Nb 1) P.O.

Auchan agrees to negotiate

French-owned hypermarket operator Auchan Hungary Kft started negotiations with suppliers about overdueliabilities last Friday after six companies initiated the liquidation of the retail giant at the Budapest City Court. Thesuppliers believe this could mark the beginning of a successful agreement regarding the disputed payments,which they believe occurred as the result of problems in the invoicing process, according to István Kovács, topexecutive of Debreceni Hús Rt and Szole-Meat Kft, both owned by meat industry investor Gyula Román. Auchanowes Ft 30 and Ft 17 million to these, respectively, in addition to a Ft 71 million overdue payment to Immobilia1904 Kft, another Román interest. (MH 12) P.P.

Feeble share market creeps 1.2% forward

Hungarian shares inched up at the end of a week that saw sideways and lackluster trading and a mixed bag of earnings. The bottom fell out of Friday's session, which recorded among the bourse's lowest turnovers. Mortgagebank FHB Rt's first quarter earnings inspired investors in the penultimate session and proved to be the main outperformer during a week that saw major losses in the tech sector and aimless trade in top caps OTP bank Rt andMOL Rt ahead of their quarterly reports next week. Plastics firm Pannonplast Rt sharply narrowed its losses andkept its share price stable, while drugmaker Richter Rt's uneven results failed to produce any notable reaction byinvestors, though the stock had risen substantially in advance of its report out on Friday. (MTI; Nv 5)

5 hopefuls for BKV chip tender

By the end of May, only five of the current six companies, including Electronic Data Systems (EDS) Hungary Kft,MÁV Information Technology Kft, Sagem Hungary Kft, the German Scheidt&Bachmann GmbH, the SpanishTelvent GIT SA, and the German T-Systems, can hope to win the Ft 20 billion tender for chip cards and e-ticketsannounced by Budapest Transport Rt (BKV). The winner will be published by mid-August, and the test run of thenew system may take place on the yellow subway line from the beginning of next year. (Fri.'s Vg 1) P.O

Strabag to build dorm in Gyöngyös

Construction company Strabag Rt has signed an agreement with Károly Róbert College of Gyöngyös, northeastHungary, to build a student hostel in the city for 600 people. The construction of the hostel's first building will startthis spring and will cost Ft 1.5 billion to be finished by January 2006. The average rental fee of the rooms will beFt 36,000 per month. The rooms of the new hostel will vary from 2-3 bed rooms without bathroom to 1-2 bedrooms with bathroom. (Ng 18) M.K.

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Deloitte moves to new HQ

Consulting firm Deloitte Kft has moved to a new HQ building from today, the company announced. The company'smanagement decided to move from Nádor utca, Dist. 5, to Dózsa György út, Dist. 6, due to the increasing number of staff. Deloitte will rent the 3,300 sq.m. office with a deep garage for five years. (Ng 17) M.K.

Matáv changes name to Magyar Telekom

Matáv Rt, Hungary's incumbent telco, officially adopted its parent company's moniker on Friday: the company will

now be called Magyar Telekom Rt. Matáv's majority owner is Germany's Deutsche Telekom. Matáv Pont shopsbecame T-Pont shops from Friday, and Matáv's subsidiaries also adopted new names: Matáv's internet subsidiary Axelero became T-Online Magyarország, and cable TV company MatávkábelTV was renamed T-KábelMagyarország. (Econews; Budapest Business Journal)

Anomaly in Paks power plant

Hungary's only nuclear power plant said that there had been an anomaly in its block No. 1, shut down for maintenance operations in April. The block was put offline on April 9 and the anomaly occurred during the coolingprocess, the company said in a statement on Friday. An expert team, set up to investigate the affair, concludedthat the disparity in water temperatures in two pieces of equipment exceeded the limit specified in the technicalrules of operation. The team, composed of company staff and experts of the National Atomic Energy Office,qualified the event as an anomaly, the lowest level on the seven-grade International Nuclear Event Scale (INES),having but an insignificant impact on safety. (MTI; MH 17)

Economics

40% of waitstaff's tips for gov't

Under a government plan to start requiring catering businesses to add a gratuity to their receipts -- compellingthem to pay tax on this income as well -- 60% of tips will stay in the apron pockets of waitstaff, and the rest will goto the state. Waitstaff will pay 20% of their tips as VAT and 25% as personal income tax, Zoltán Somogyi, whoheads the Hungarian Tourism Office, said on Friday. Workplace cafeterias will not have to add tips to their receipts, Somogyi said. But other restaurants and catering businesses will have to list a 0-15% gratuity. Somogyisaid the new rule would not cause a big rise in prices, discouraging people from eating out, lowering restaurants'turnover and, in turn, tax revenue. (Econews; NG 1, Fri Vg 1)

Industrial output up adjusted 3.9% yr/yr

Hungary's industrial output rose by a seasonally- and working day-adjusted 2.1% in March from February andwas up 3.9% from March 2004 according to working-day adjusted preliminary figures of the Central StatisticsOffice (KSH) published on Friday. According to unadjusted figures industrial output in March 2005 rose 1.4% froma year earlier. In February 2005, industrial output was down 0.6% from January according to seasonally- andworking-day adjusted figures and rose 1.3% yr/yr according to working-day-adjusted figures. On an unadjustedbasis, February output was up 1.0% yr/yr. (Econews; NG 7)

EIB hesitant to ink Metro loan agreement

The European Investment Bank (EIB) is reluctant to sign the planned financing agreement to extend a loancovering 75% of the Metro 4 project costs until the government and the Budapest city council reach consensus asto how to split the costs of the second phase of the subway construction, broadsheet Népszava reported. A fewyears back, the state and the city agreed to pay a respective 70% and 30% of the costs associated with the firstsection between the Kelenföldi and Keleti railway stations and not covered by the EIB loan, however the financing

of the next section from Keleti to Bosnyák tér is still unsettled. Without such an agreement, EIB reportedlybelieves there is no guarantee that the project will be realized in its entirety, the only way it makes senseaccording to the bank. (Nv 4) P.P.

Szolnok gets Ft 600 mln for E-admin

The municipality of Szolnok, central Hungary, has received around Ft600 million in state subsidy to set upelectronic administration, head of the Organization and Legal Department, Andrea Rácz, said. As part of theproject, the municipality will be getting a new computer network, with a direct link to the local land registry, thedocument office, and governmental portals. Users can log onto the network in public institutions with Internetaccess. Similar development projects will get underway in 40 cities all over the country during the upcomingmonths. (Nb 6) P.O.

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April public finance deficit Ft 225.1 bln

Hungary's public sector, excluding local councils, registered a GFS cashflow-based deficit of Ft 225.1 billion in April, bringing the four-month deficit to Ft 710 billion, Finance Ministry figures published on Wednesday show. Thefour-month public finance deficit was equal to 69.4% of the full-year target. The central budget deficit was alreadyat 84.2% of the full-year target of Ft 700 billion. The figures are better than the ministry's earlier forecast of a Ft244.6 billion deficit for April and a Ft 729.2 billion four-month deficit. The central budget deficit was Ft 215.9 billionin April, compared to the ministry's Ft 222.4 billion forecast. (Econews)

Politics

Fidesz/Christian Democratic win

Mátyás Firtl, an MP representing main opposition party Fidesz and chief ally the Christian Democratic People'sparty, won by a huge margin the second round of a by-election held yesterday in the northwest town of Sopronand its outlying areas, an official of the county of Gyor-Moson-Sopron's election office said. Firtl won the electionwith 72 % of the vote and on a turnout of 27 %. The governing MSzP's candidate came second with 18 %. (MTI;Nb 1, MH 3, Nv 3)

New Generation supports Hempseed Assoc.

The liberal youth organization New Generation yesterday joined a demonstration by the Hempseed Association, alobby group for the decriminalization of soft drugs on Margaret island. The youth wing of the governing party

SzDSz wants to protect society rather than punish it, New Generation's leader László Csozik said. It is time tounderstand that a network of wide-scale preventive, educational and treatment programs are needed to helpHungarian youth rather than strict punishments, Csozik said. (MTI; MH 6)

Domestic

Trade Unions: new airspace control structure unsafe

The new airspace management structure that will replace the current system at Ferihegy International Airport onThursday seriously threatens aviation safety, two control staff trade unions claim in a petition submitted to PrimeMinister Ferenc Gyurcsány. HungaroControl, the company that operates the air traffic control system at theairport, have announced measures aimed to allow aircraft to take off and land more frequently to accommodatefast growing traffic, as Budapest is becoming an ever more popular travel destination. These include reducing theminimum distance between airplanes from 5 miles to 3, new designated routes, and designating a higher waitingarea for aircraft preparing to land to reduce noise on the ground. The trade unions claim that HungaroControl didnot conduct any risk analyses before approving the plan, the control tower is short-staffed, and the personnelwere not trained properly for the new procedure. (Nv 5) P.P.

Stockwatch

BUX Close: 16570.48 Change: +33.87; (+0.20%)

Stock Closing price Daily change (%) Average price Volume MOL 15,795 -0.5 15,968 155,930 Matáv 870 1.2 868 693,277 OTP 6,125 0 6,150 220,498 Richter 25,100 0.8 24,861 25,021 Egis 15,000 1.4 14,871 11,383 Antenna 4,185 -10 4,167 93,530 TVK 5,400 1.5 5,363 7,762 Rába 665 0 672 2,805

Exchange

FIXED MIDDLE RATE In forints

May 06, 2005 National Bank of Hungary EUR 1 249.58 USD 1 192.68 GBP 1 365.57 CHF 1 161.27 JPY 100 183.98 CZK 1 8.34

PLN 1 60.15



7days, 2005. május 9

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