Central
Bank fools the analysts
Prior to
the Monetary Council’s rate decision last Monday, analysts were almost
unanimous in expecting that the Central Bank would not lower the base rate in
June from 8.0%. Although analysts predicted a total rate cut of around 0.75% to
1.0% in the remainder of the year, the timing of the current 0.25% cut came as
a surprise.
An MSZP councillor in
the southern county
of Bács-Kiskun was named
as a suspect in a case of misappropriation of funds amounting to some HUF 50
million (EUR 200,000) by weekly news magazine HVG last week. The State
Prosecutor’s Office has been investigating seven foundations and organisations
that applied for and received government funding, of which over HUF 50 million
(EUR 203,205) seems to have disappeared.
29 June
2007, Budapest – The Italian Chamber of Commerce
in Hungary took the
opportunity of the annual boat cruise on the Danube
to ceremonially hand over the presidency of the EU Chambers after two years to
the German-Hungarian Chamber of Industry and Commerce (DUIHK). The outgoing
president of the EU Chambers, Alessandro Stricca who held this post for a year
and a half as president of the Italian chamber, can draw a positive balance.
Â
Government
gives hefty subsidy to Vodafone
Vodafone
will receive HUF 1.3 billion (EUR 5.25 million) in subsidies and tax breaks
from the government to support its new Budapest service centre, Prime Minister
Ferenc Gyurcsány said last Wednesday as Vodafone chief executive John Bond
signed the contract with the government.
Vodafone
announced in early May that it would invest HUF 9 billion (EUR 36.38 million)
to set up a service centre to handle financial processes and transactions for
18 countries. The centre will create 746 jobs. Bond said Vodafone looked at setting up the centre in
20 different countries but plumped for Hungary because of its skilled
workforce.
Hungary’s gas giant hostile toward apparent
OMV takeover bid
MOL
Hungarian Oil and Gas last week bought back over 6 million of its own shares as
it attempted to strengthen its position against an apparent takeover bid by
Austrian counterpart OMV.OMV
announced last Monday it had spent about EUR 1 billion to increase its stake in
MOL from 10% to 18.6%. The Austrian company then said that it wished to invite
MOL to have “an open and constructive dialogue” on strategic cooperation.
Car manufacturer to build new A3 Cabriolet in HungaryGerman car
manufacturer Audi AG will manufacture its new A3 Cabriolet at its plant in
Gy?r, western Hungary, the
company’s chairman Rupert Stadler told journalists in Budapest last Friday.
Stadler
said that it was an easy decision to manufacturer the car in the Hungarian
plant because of its previous good record. While he refused to give exact
details on the planned production figures, he said that the vehicle would hit
the markets in the spring of 2008.
Get with the programs
The head of
the American Chamber of Commerce in Hungary (AmCham), Gusztáv Bienerth
and the chairman of AmCham’s IT committee, Dr Péter Pál, at a press
conference last Wednesday introduced a document calling on the
Hungarian government to improve the local business environment by
computerising the country’s bureaucratic machinery.
Electricity in the air
Air
conditioners have been in overdrive in response to the heatwave,
prompting the managers of Hungary’s electricity grid to hold emergency
talks. At the same time, there are numerous projects, both concrete and
theoretical, aimed at addressing the problem of electricity supply.
Mopping up, moving on
Magyar
Telekom, the German-owned telco is still reeling from revelations of a
HUF 2 billion corruption scandal at its unit in Montenegro. Last week,
the company sought to assure the Hungarian press of its commitment to
being open and accountable from now on.
External factors outweigh good news at home
The
volatility of the forint intensified markedly since the start of June
with the domestic currency hovering in a 1.5-2.0% wide range. Hungarian
bonds were also down (the yields rose by 15-25 base points compared to
the levels in the previous month) in tandem with the depreciation of
the forint, which reflects a worsening of the risk assessment of forint
instruments. Taking into account the market environment which is more
unfavourable than earlier, in our opinion the weakening of the forint
exchange rate was triggered not by worsening domestic macroeconomic
processes, but by inflation fears in the USA affecting international
markets and growing rate increase expectations in the eurozone.
