Croatia Suspends Talks with Mol on INA Sale

October 31st 2008

The Croatian government has suspended talks with Hungarian oil and gas company on a sale or swap of shares in Croatian peer INA, Reuters reported on October 31st 2008.
Otvoreni Radio, a local news radio, reported after a cabinet session that the government has shelved talks with MOL.
It was said that Deputy Prime Minister Damir Polancec would announce the government's future moves at the next cabinet session.
After the five-year lock-up, Croatia will have the right of first refusal to buy back the shares if MOL decided to sell, or was itself a takeover target by some of the oil majors, Reuters reported.
MOL raised its stake in INA to 47.15 pct after buying a 22.15 pct stake in a public buyout offer closed in September.

EC Formally Proposes EUR 6.5 Billion Loan for Hungary

October 31st 2008

The European Commission on October 31st 2008 formally proposed making available a EUR 6.5 billion loan to Hungary to support the balance of its current account, spokeswoman Amelia Torres said.
The loan is expected to be approved by EU finance ministers on November 4th 2008, Ms Torres said.
The loan is part of a EUR 20 billion credit line from the EU, the IMF and the World Bank announced on October 29th 2008. The loan may be called in no more than five tranches and the average repayment period is five years.

Wabard Could Sign More Than 50,000 Mandatory Vehicle Contracts in Switch-Over Month

October 31st 2008

Recently established insurance company Wabard Biztosito expects to sign 40,000-50,000 mandatory vehicle insurance contracts this November - the only month Hungarian drivers may change insurance providers - in addition to contracts signed with road haulage company Waberer's, Wabard and Waberer's owner Gyorgy Waberer said at a press conference on October 31st 2008.
Mr Waberer set up Wabard in the summer, after the license of the insurance company that provided the Waberer's fleet with mandatory vehicle insurance was confiscated by financial market regulator PSZAF.

GE to Cut Production, Lay Off Staff at Hungary Lighting Unit – extended

October 30th 2008

General Electric will cut production at its lighting unit in Hungary and lay off 500 of its 10,000 staff, the company's Consumer and Industrial division announced on October 30th 2008.
The decision will affect eight of the unit's nine bases in Hungary. One factory, in Gyor, will be shut down. The measures will be carried out in Q4 2008 and Q1 2009. Other GE units in Hungary will not be affected.
GE employs about 15,000 staff in Hungary.

Quaestor Wins HUF 600 million EU Grant for Hotel Renovation

October 30th 2008

Hungarian investment group Quaestor has won a HUF 600 million EU grant for the renovation of a grand hotel shut down 30 years ago in the heart of Szeged, local daily Delmagyarorszag reported on October 30th 2008.
Sandor Molnar, who heads Regi Hungaria, the Quaestor unit in charge of renovating the hotel, told the paper that the company had been waiting for such an opportunity for ten years. The HUF 2 billion renovation will start at the beginning of 2009 and open in 2010, he said.
The hotel, built in 1916, was condemned and shut down in 1977. (HUF 100 = EUR 0.3917)

Industrial Producer Prices Rise 4.7 Pct Yr/Yr in September

October 30th 2008

Hungary's twelve-month industrial producer prices rose 4.7 pct in September, picking up from a 3.2 pct increase in August, the Hungarian Central Statistical Office (KSH) reported on October 30th 2008.
Twelve-month forint-term export prices dropped 1.3 pct, after a 3.9 pct decline in August. Twelve-month domestic sales prices rose 12.8 pct in September, nearly level with the 12.9 pct increase in the previous month.
In a month-on-month comparison, industrial producer prices were up 1.2 pct in September, picking up from a 0.7 pct increase in the previous month.

Budapest Airport to Build 250-Room Hotel at Ferihegy

October 30th 2008

Budapest Ferihegy International Airport operator Budapest Airport (BA) is planning to build a 250-room hotel at the airport, the business daily Vilaggazdasag reported on October 30th 2008.
BA Director of Property Development Rene Droese told Vilaggazdasag that the seven-floor hotel, which will include conference facilities, is scheduled to be completed in 2012. Mr Droese said that the hotel will be part of Ferihegy International Airport's business and commercial center and is primarily intended to accommodate conference tourists and business people.

Hungary to Pay 0.25 pct Stand-by Fee, 5-6 pct Interest on EUR 20 Billion Support Package

October 29th 2008

Hungary will pay an annual stand-by fee of 0.25 pct and interest of 5-6 pct on a EUR 20 billion credit line from the IMF, the EU and the World Bank, National Bank of Hungary governor Andras Simor said at a press conference on October 29th 2008.
Hungary may call the credit until the end of March 2010, Mr Simor said. The repayment term is 3-5 years. The purpose of the credit line is to strengthen the confidence of global money and capital markets in Hungary, as well as to help finance the current account balance, the governor said.

Government to Require Farmers to Participate in Relief System

October 29th 2008

The government decided at a cabinet meeting on October 29th 2008 to require farmers to participate in a system set up two years ago to provide relief for weather-related damages, Agriculture Ministry State Secretary Zoltan Gogos said.
Until now, farmers have participated in the system on a voluntary basis, but few have availed of the opportunity, Mr Gogos said. The change will be introduced at the beginning of next year, he added.
Requiring farmers to participate in the system is expected to boost the annual amount of relief paid out from the current HUF 400 million-500 million to HUF 2.5 billion. About HUF 5 billion will be available for relief payments.
Crop farmers will have to pay HUF 800 per hectare into the system, Mr Gogos said. Until now, farmers who have joined the system had to pay HUF 1,000 per hectare. (HUF 100 = EUR 0.3917)

Hungary's External Financing Requirement to Fall In 2009

October 29th 2008

Hungary's gross external financing requirement will fall in 2009 because of faster narrowing fiscal (to 2.6 pct of GDP from 3.4 pct this year) and current-account (to 2.0 pct of GDP from 6.25 pct) deficits, as well as because of EU structural funding and previously committed foreign direct investment, the government and the National Bank of Hungary said in a joint statement on October 29th 2008.
Hungary will aim to gradually raise its international reserves to provide a buffer in the case of a sudden outflow, the statement said. The resulting external financing requirement can be covered with the funds made available by the IMF, the EU and the World Bank, as well as with resources from other lenders, the joint statement said. General government primary spending will be cut by 2.5 percentage points of GDP in 2009 from 2008, and, to ensure continued fiscal consolidation, new mid-term fiscal targets will be set as part of the upcoming update of the country's convergence plan.

AKK Cancels Bond Issues for Rest of Year

October 29th 2008

The Government Debt Management Agency (AKK) on October 29th 2008 said that it was cancelling all remaining bond auctions previously scheduled in its 2008 issuance calendar, and it would set amounts offered at discount T-bill auctions according to actual market conditions in order to ease the imbalance experienced in the government securities market. The step is part of a series of measures taken jointly by AKK, the National Bank of Hungary and primary dealers to consolidate the operation of the government securities market, thus supporting the consolidation of the Hungarian financial and capital markets.