7days, 2004. október 11

7/28/2019 7Days, 2004. október 11.

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

Morning 05/10/2004Business Crew of damaged airplane fined

MAV picks four in pre-qualifying roundCape Clear Aviation to run Balaton WestFrench budget hotels in HungaryVodafone capital increaseLegal action over paper titleFinMin offers sub's to firms going publicNew construction softwareMatáv, T-Mobile launch WLAN servicesInvestors buy out stake in forestry company ErdértConstruction company finedWizz takes off Diners lose appetiteInsurance tax break cap

Textile maker sagsÁPV invites new bids for agribusinessesHungary sells Ft 25 bln of bills dueHungary to close gap with EU

Economics Ecostat puts Q3 GDP growth near to 4%Politics Gov't parties on anti-privatization motion

Democratic Forum for privatizationDomestic First Lady opens new British International School

No smokingMother and kidnapped daughter return from Turkey

Stockwatch BUX index: BUX Close: 12,666.16 Change: +136.35 (1.09%)Exchange Fixed Middle RateWeather Tomorrow: p/cloudy

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7/28/2019 7Days, 2004. október 11.



Morning 06/10/2004Business Pig farming loss-making business

PSzÁF fines Erste BankStrabag cement site not concreteIT company Kürt plans to expandOTP's cash cow still in HungaryMicro loans fall shortBratislava-B'pest exchange cooperationPoland's clearing house opens KELER accountSony to produce DVD player-recorders in GödölloTV2 revenue upWater pipelines to be replacedRWE name change44 Hungarian companies at Bucharest fair

Economics GDP growth prediction, rising consumptionHungary's borrowing costs drop at auction

Politics Parliament authorizes signing of EU ConstitutionTone of Hungarian politics "too sharp"CoE warns Serbia over ethnic violence in Vojvodina

Domestic FinMin wants cooperat'n with Slovakian customsOutpatient privatization planDialysis treatment feels the pinchPower producers seek higher emissionsGov't spending on water Action against dialing virusesNo to airport devlp't

Stockwatch BUX index: BUX Close: 12824.87 Change: +158.71 (1.25%)Exchange Fixed Middle RateWeather Tomorrow: p/cloudy

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Morning 07/10/2004Business AgMin seeks extra storage due to bumper harvest

László Némethy named new AmCham chairmanSale of VCP's BorsodChem stake completedMatáv's signs with T-Com and T-MobileDorotheum buys Orex jewellery storesNo punitive U.S. tariffs for HungaricumCytRx purchases assets of BiorexMagyar Posta's Ft 5.1 bln pre-tax profitPick to dismiss 198 instead of 450Premier outlets center to openLidl to open next weekMOL eyes North Africa with INASemilab buys SemiTest stocks and tech.Wind power park to be built in BakonyMagyar Posta calls car fleet tender Pannonplast expects losses of Ft 1 bln

Economics ESA gen gov't deficit target setBudget: real wages to rise 3-4% in 2005Gyurcsány promises fair taxation in 2005Ft 1,052 billion invested in SMEsSept fiscal deficit Ft 91.8 bln

Politics New Bp Admin head sees conflict of interestMedgyessy to become roving ambassador New gov't spokespeople named

Domestic PM congratulates Hungarian Nobel winner Stockwatch BUX index: BUX Close: 12799.04 Change: (-25.83; -0.20%)Exchange Fixed Middle Rate

Weather Tomorrow: rain

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Morning 08/10/2004Business Microsoft picks Hungary for service center

BUX at world-class record highEuro 11 mln for Hungary's wine growersPSzÁF rejects Amstel's offer for BrauNabi to cut a fifth of work forcePSzÁF fines Hamilton Ft 3 mlnÁPV denies rumors of secret privatization planIT alliance elects new presidentPrivate jet hire in HungaryFt 5 bln worth of MKB II bonds for salePSzÁF to take two-pronged approachDémász opens Ft 1 bln transformer in BajaCourt gives go ahead for subway constructionRecord rise in DVD sales

Economics 2005 budget a step toward eurozoneIncentives to hire young staff 2005 motorway funding in PPP constructionsIndustrial output up, rate downBankcards gaining popularityOverwhelming applications for EU grantsHotel occupancy up yr/yr

Politics Demszky resigns MEP postHungary, New Zealand to boost cooperationHouse Speaker joins anti-fascist demoCenter-left leaders to meet in Hungary

Domestic Healthcare workers hold warning strikeStockwatch BUX index: BUX Close: 12993.61 Change (+194.57, +1.52%)

Exchange Fixed Middle RateWeather Tomorrow: rain

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Morning 11/10/2004Business 6 motorway sections to be built in a concession

PBS to invest Euro 5 mln in BudapestBUX flirts with 13,000-point markHamilton offers Euro based planBorsodChem debuts on Warsaw exchangeShare delistings pending court decisionHungarians wary of mobile bankingHungarian to head INTOSAIHungary reconnects with BalkansBilfinger wins Euro 188 Mln orderMusashi progressive social schemes Trade corporations to launch academy

Economics Hungary's dynamic growthAugust trade deficit Euro 370 mln

Central bank net foreign assets fallGrowth of monetary base slows in Sept.No agreement on wage risesFarmgate prices rise 2.6% yr/yr in Aug.International reserves Euro 10.476 bln

Politics Cabinet meets informally in BalatonoszodDomestic Bor presented Bolyai Award

Hungary to introduce universal EU driver's licensesHungarian author gets German book awardEx-National Police chief for Europol's director

Stockwatch BUX index: BUX Close: 12954.69 Change: (-38.92, -0.30%)Exchange Fixed Middle RateWeather Tomorrow:sunny

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05/10/2004Business

Crew of damaged airplane fined

A Budapest court fined three senior officers of a Hungarian airlines MALÉV Rt crew for jeopardizing an airliner

with 91 people on board, MTI reported yesterday. The accident, in which no one was hurt, happened atThessalonica airport in July 2000. Legal proceedings were initiated against the pilot, the co-pilot and the flightengineer on charges of directly jeopardizing the plane, as they had not read out the mandatory checklist beforelanding and did not realize that the landing gear was not in place. The court fined the pilot Ft 135,000 (approx.euro 535), while the co-pilot and the engineer were fined Ft 105,000 (approx. euro 400) each. The defendantsalso have to pay Ft 1.4 million (approx. euro 5,400) in legal fees. (MTI; Nb 1, MH 20, Nv 12)

MAV picks four in pre-qualifying round

Hungarian railways MÁV Rt has picked Stadler-Ganz, Siemens AG, Bombardier Transportation and AlstomTransport in the pre-qualifying round of a tender to provide 30 multiple units worth around Ft 40 billion, MÁVannounced yesterday. The electrical multiple units, which must have automatic doors, a low-floor platform and air conditioning, will be used on MÁV's commuter routes into Budapest. MÁV intends to spend Ft 500 billion on athree-phase commuter rail expansion program by 2010 in order to accommodate the 40-50% increase incommuter passenger numbers from the current 124,000 passengers a day. (Econews; MH 10)

Cape Clear Aviation to run Balaton West

The owners of Balaton West Airport, located in Sármellék, near Lake Balaton, have changed their contract withthe airport's new operators, Cape Clear Aviation, which is owned by Irish investors. Cape Clear will rent theairport from the Sármellék local council and Danubius Hotels from November 1, under a contract originally signedin May. Cape Clear has placed a euro 300 million deposit to cover development costs at the airport. Cape Clear will also have to cover the Ft 10 million in losses the airport generates each month it is out of operation.(Econews; NG 5, MH 11)

French budget hotels in Hungary

French budget hotel chain operator Akena said is looking for potential franchise partners in Hungary to open low-cost no-frills hotels. Currently operating in France and Belgium, Akena is hoping to set up a batch of hotels atmotorway exits and in downtown areas offering accommodation for as low as euro 30-50 per night at three gradelevels. Under the franchise contract, hotel operators will have to pay up a one-off Euro 380,000, 4% of their annual revenues, plus another percentage as marketing contribution. (Vg 1) S.F.

Vodafone capital increase

Mobile operator Vodafone Hungary Rt's registered capital was increased by almost Ft 11 billion from Ft 51.88billion to 62.76 billion recently. Vodafone's former minority owner, Antenna Hungária Rt, which has recently soldits stake in the company, did not take part in the capital increase. According to Attila Vitai, CEO of Vodafone

Hungary, the launch of a new billing system, developments necessary to possible future 3G services and a partialreimbursement of a euro 350 million loan will be financed from the capital increase. (NG 1) R.G.

Legal action over paper title

Ringier Publishing House Kft is again suing Híd Rádió Rt publishing house of tabloid Színes Mai Lap, demandingFt 1 billion in compensation for using a brand name very similar to Ringier's former publication Mai Lap withoutRingier's permission. In April the Budapest municipal court ruled in favor of Ringier demanding that Híd Radio Rtshould change the name because of the similarity. Although Híd Radio Rt changed the newspaper's logo inNovember, it did not change the name. (NG 1) R.G.

FinMin offers sub's to firms going public

The 2005 budget bill earmarks Ft 100 million in subsidies for listing fast-growing medium-sized companies inHungary on the Budapest Stock Exchange, according to an announcement by the Finance Ministry yesterday.

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Companies will be able to apply to the Ministry of Economic Affairs and Transport for the funds, which will be usedto help defray the costs of going public. The government is expected to submit the bill for next year's centralbudget to parliament on Thursday. (Econews; Nv 5, MH 13, Vg 14,)

New construction software

Hungarian software company Graphisoft NV issued a new software package called Virtual Construction, claimingthe application to be the first 5-generation construction supporting software in the world. In addition to the usual 3-dimensional modeling design program, Virtual Construction also provides construction scheduling services andcash-flow analysis for projects. The company claims that by using Virtual Construction, realization costs can becut by 2-3%. (NG 11) R.G.

Matáv, T-Mobile launch WLAN services

Matáv Rt and its subsidiary T-Mobile Magyarország Rt, a mobile phone service operator, will allow their customers to use wireless LAN (WLAN) public access points, or hot spots, around the city free of charge, the twocompanies announced yesterday. Customers with the right equipment will be able to access the internet at 28 T-Mobile and 53 Matáv WLAN points, such as Ferihegy airport and Vörösmarty Square in the city center. Matáv and

T-Mobile plan to set up more WLAN points in the future and will start offering commercial WLAN services from thespring of next year. (Econews; Nv 5, MH 9)

Investors buy out stake in forestry company Erdért

Erdért Befektetési owned by György Nagy, former head of Hungarian investment giant Wallis, and FerencKedves, managing director of PET Hungária Kft, has purchased an 89.05% stake in forestry and wood processingcompany Erdért Rt for an undisclosed price. Erdért Befektetesi purchased the stake from Erdert's employees andsmall investors, who still retain some of the company. Erdért recorded net sales revenue of Ft 11.968 billion in2002 and Ft 12.125 billion in 2003. The company projects net sales of Ft 12.854 billion in 2004. (Econews; MH10, Nb 17)

Construction company fined

The Budapest City Court upheld a Competition Office (GVH) judgment that had imposed an additional Ft 112million fine on Austrian-owned Strabag Rt in May for hindering justice in a high-profile price-fixing case whichended with a combined Ft 7 billion fine for five highway construction companies including Strabag. The latter is topay a supplementary fine for failing to produce the original copy of a document that could have been used asevidence of the illegal agreement. In daily broadsheet Magyar Hírlap's information, the Competition Office hasturned down the cartel members' appeal for an exemption from the hefty penalties until a higher-level courtdecision is passed down. (MH 1) P.P.

Wizz takes off

Only three months after becoming operational, Hungarian-based Wizz Air Kft became the most popular no-frills

airline offering flights from Ferihegy International Airport, with 37,000 passengers flying from/to Budapest in August. The company accounted for nearly one third of the airport's 121,000 budget passengers in the samemonth, during which conventional carriers reported 740,000 flyers, according to airport operator Budapest AirportRt. In August Wizz Air also became the leading discount airline in Poland and celebrated its 100,000th passenger internationally. (MH 10) P.P.

Diners lose appetite

Apart from popular high-end Budapest restaurants, which managed to increase their income by 10%, Hungary'scatering outlets saw their revenues slide by an average of 13% in Jan-Aug compared to the same period lastyear, according to a poll by the Caterers' Trade Association. In regional terms, Budapest catering suffered theleast with revenues falling 11% on average, while at the other end of the scale the drop was 26% in southwestern

Hungary. The industry's flagging performance can largely be put down to the unusually cool weather in thesummer months and lower tourist numbers. (Vg 11) S.F.

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Insurance tax break cap

A new bill currently in the legislative pipeline proposes a Ft 100,000 tax break cap on individual insurance policiesand stipulates an annual Ft 6 million personal income limit in the eligibility criteria. Last year 1 million middle-classHungarians deducted a total of Ft 17 billion from their taxes based on insurance policies. They would not besignificantly affected by the changes, but imposing new restrictions goes against European guidelines of

promoting self-sufficiency, Secretary General of the Association of Hungarian Insurance Companies (MaBiSz)said. Those who lose eligibility for a tax allowance might prefer foreign insurance companies, he added. (MH 10)P.P.

Textile maker sags

Lurotex Kft, the ailing textile manufacturer, said it will lay off another 100 staff (half of its total workforce) and closedown one of its plants in the months ahead in an effort to recoup massive losses caused by low demand and cut-throat competition. Based in Szentgotthárd, western Hungary, Lurotex was forced to cut 100 jobs and sent 270workers on vacation for a month last year. The textile maker posted losses of Ft 150 million on Ft 2.5 billion insales in 2002. (Vg 12) S.F.

ÁPV invites new bids for agribusinesses

The State Privatization and Holding Company (ÁPV Rt) has again advertised the sale of four agriculturecompanies - Alcsiszigeti Mezogazdasági Rt, Komáromi Mezogazdasági Termelo es Szolgáltató Rt, Bácsalmási Agráripari Rt and Tokaj Kereskedoház Rt, ÁPV announced yesterday. ÁPV is looking for other Hungarianagribusinesses to buy the companies. Price, a capital raise, and the buyer's clients will be the major factors in theevaluation of the bids, but ÁPV will also consider any buyer's plans to integrate the companies' labor, suppliersand customers. The deadline for bidding for the four companies is November 4, 2004. (Econews; MH 2)

Hungary sells Ft 25 bln of bills due

Hungary sold Ft 25 billion ($125 million) more of its Treasury bills due on Dec. 8 at an average yield of 11.01%,the Debt Management Agency ÁKK Rt said. The maximum yield was 11.03% and the minimum 10.80%. Bills withsimilar maturity also were sold to yield 11.01% last week. The agency received 96 bids worth Ft 56.3 billion andaccepted 61 of them. Hungary first sold Ft 40 billion of the same three-month bills to yield 10.96% on Sept. 7. Theyield on three-month bills, the shortest maturity included in Hungary's benchmark debt securities, was 10.82% onFriday on the secondary market. (Bloomberg; MH 13)

Hungary to close gap with EU

By 2020, Hungary could reach 78% of the old EU members' average GDP per capita level as against today'sroughly 50%, market researcher Ecostat said in a fresh report. According to Ecostat's estimates, the real benefitsof EU membership will kick in from 2007, boosting Hungary's GDP growth to as high as 5.2% by 2010, andkeeping it at a steady 4.5% for the next decade. The budget gap could narrow to 3% in the next 3 years anddisappear altogether by 2020. The government debt to GDP ratio will contract from 60% to 40% in the next

decade and a half, while FDI levels could to stay in the region of Euro 3-3.5 million per annum. (Vg 4) S.F.

Economics

Ecostat puts Q3 GDP growth near to 4%

Economic research institute Ecostat in its September prognosis put the yr/yr growth of Hungary's GDP close to4% in Q2 after a 4% increase in Q1 2004. Exports and investments continue to fuel growth, but Ecostat noted thathousehold consumption has also risen faster than expected, which will damage the trade balance. Personalconsumption rose by 4.7% yr/yr in Q2 and is growing faster despite the fact that real net wages rose by only 0.3%in the first half of the year. A rise in additional income on top of base salaries may also have boostedconsumption, Ecostat notes. Ecostat says that the Finance Ministry's new general government deficit target for the year of 5.1-5.3%, compared to the earlier 4.6%, seems achievable. (Econews)

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Politics

Gov't parties on anti-privatization motion

An initiative by the main opposition Fidesz party for a referendum to halt privatization elicited sharp commentsfrom the government parties in Parliament on Monday. "Privatization will be continued in a controlled manner,"

said Gábor Kuncze, the parliamentary group leader of the junior coalition partner Alliance of Free Democrats(SzDSz). Prime Minister Ferenc Gyurcsány said that while Fidesz was demanding a halt to privatization, it mightas well take the next step and "propose nationalization" too. Fidesz MP Zoltán Pokorni said Hungary had endedthe age of privatization, which had fulfilled its historical mission. (MTI; Nb 1, Vg 1, MH 1, Nv 1)

Democratic Forum for privatization

The leader of the junior opposition party MDF does not back senior partner Fidesz' initiative yesterday to hold areferendum aimed at halting privatization. Ibolya Dávid said yesterday afternoon that as head of a conservativeparty she believed in private ownership and rejected all forms of collectivism or socialism. "This initiative putsFidesz onto the same platform as the (communist) Workers' Party, demanding a stop to privatization today, andpossibly fighting to abolish all private property tomorrow," Dávid said. The real privatization issues, she said,concerned what should be privatized and where the income was used. (MTI; Nb 1, MH 1, Nv 8)

Domestic

First Lady opens new British International School

First Lady Dalma Mádl, wife of President Ferenc Mádl, officially opened the new building of Budapest's BritishInternational School (BIS), MTI reported yesterday. Mádl himself sent a letter to mark the occasion, read aloud byBritish Ambassador to Budapest John Nichols. The president wrote that the multi-ethnic BIS was a spot of color inBudapest academic life. Nichols said that building the new school had exemplified the kind of cooperation that willbe needed by tomorrow's Europe. BIS was opened in Budapest in 1992. (MTI; MH 5)

No smoking

The Association of Tobacco Producers (MDSz) is spending Ft 30 million this year on a campaign to preventunder-age smoking, according to unnamed sources. MDSZ, in association with the Educational Ministry, theEconomic Ministry and the Consumer Protection Office is attempting to reduce the amount of cigarettes retailerssell to underage consumers. As a result of the campaign, the ratio of retailers serving tobacco to children under 18 decreased from 50% to 10% this year. (NG 5) R.G.

Mother and kidnapped daughter return from Turkey

A Hungarian mother and her three-year-old daughter, kidnapped by the child's Turkish father, have returned toHungary after a Turkish court nullified an earlier prosecution ruling, said a Foreign Ministry press release issuedyesterday. "Emese Raskó and three-year-old Szofi returned to Budapest on Saturday," Foreign Ministryspokesman Viktor Polgár wrote. Szofi Raskó was taken to Turkey by her father, Fatih Ozbas, a former wrestler and European Championships participant, in January without the consent or knowledge of the mother. It issuspected that he used a forged German passport for the child. The mother traveled to Ankara this March to findher daughter, where the father confiscated both Emese's and Szofi's Hungarian passports. Emese had beentrying to leave Ankara with Szofi since August with temporary documents supplied by the Hungarian consul. (MTI)

Stockwatch

BUX index: BUX Close: 12,666.16 Change: +136.35 (1.09%)

Stock Closing price Daily change (%) Average price VolumeMOL 9,840 2 9,796 205,038Matáv 830 1.5 826 1,736,333

OTP 4,487 1.1 4,482 438,003Richter 23,605 0 23,711 18,495Egis 9,750 0 9,721 30,488

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Antenna 3,845 -0.1 3,858 18,648TVK 4,450 0 4,454 2,680Rába 660 -0.8 652 4,181

Exchange

In forints, Oct 5, 2004FIXED MIDDLE RATE

EUR 1 247,02USD 1 200,52GBP 1 360,27CAD 1 157,67CHF 1 159,03JPY 100180,99CZK 1 7,81PLN 1 56,34Weather

Tomorrow: p/cloudy

High 23°C (73°F)Low 12°C (54°F)

06/10/2004BusinessPig farming loss-making business

Hungary's pig farmers expect to remain in the red this year after racking up around Ft 8 billion in losses last year,Secretary of the Hungarian Farmers' Association István Tóth said on Tuesday. The number of pigs sold for slaughter fell from 80,000 a week in Q2 to 65,000 in Q3. The average farm gate price for live hogs was Ft 258 per kilogram, with a Ft 20-per-kilogram subsidy going to farmers whose pigs meet special EU regulations. But the

price is still well under the Ft 301-per-kilogramme cost of raising pigs. (Econews; NG 1, Vg 5)

PSzÁF fines Erste Bank

Hungary's financial market regulator PSzÁF announced it has imposed a Ft 1 million fine on Erste BankBefektetési Rt for exercising unfair influence on share prices. PSzÁF also fined the broker who made thetransactions Ft 200,000 and struck his name from the list of brokers for five years. An audit by PSzÁF found thatone of Erste Bank Befektetési's brokers had exercised unfair influence on the share price of BorsodChem Rtshares by making eight cross-trades between May 30 and June 17, 2003. BorsodChem shares were stagnating or moderately rising prior to the transactions, which then resulted in sharp increases. (Econews; NG 12, Vg 18)

Strabag cement site not concrete

Three new possible sites are being considered by construction company Strabag Rt for its upcoming Ft 27 billioncement factory project, which suffered a setback in early August after the residents of Bükkösd, southernHungary, voted against the plan. All the three target sites have been picked in the neighboring area, whereStrabag believes residents would be more willing to support the investment. A final decision on the location isexpected within a month, Ottó Zimmerman, the project's PR manager said. (NG 1) S.F.

IT company Kürt plans to expand

Data security and recovery company Kürt Computer Rendszerház Rt is in talks about setting up subsidiaries in Asia and America, owner and CEO Sándor Kürti announced on Tuesday. Kürt had pre-tax profit of Ft 100 millionon revenue of Ft 1 billion in 2003, and the firm expects revenue to exceed Ft 1 billion in 2004. Secure dataservices account for around half of Kürt's revenue, with consulting services generating 25% and data recovery

services for 15%. 18% of Kürt's data recovery business comes from big companies and the government. Mr Kürtisaid that Kurt needed to draw in capital in order to expand in line with demand. (Econews; Vg 1)

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OTP's cash cow still in Hungary

Around 85.2% of the assets of banking giant OTP Rt were in its Hungarian subsidiaries at the end of June,according to the bank's detailed consolidated IFRS unaudited report for H1 2004. These subsidiaries generatemost of the bank's revenue and account for most of its expenditures too. The OTP group had 813 branches at theend of June, including 430 in Hungary, 323 in Bulgaria and 60 in Slovakia, employing a total of 16,950 people.

Additionally, OTP purchased a small Romanian bank at the end of July, and is currently screening the Serbianbank Jubanka. (Econews; MH 13)

Micro loans fall short

Over Ft 5 billion remained unspent in the National Micro Loan Fund since the beginning of this year. The total sumof loans granted is just over Ft 1 billion. The failure is due to the conditions of the program being too strict,Világgazdaság reported. The loan has a maximum value of Ft 3 million, not enough even for small enterprises,and should be raised to at least Ft 5 million-Ft 6 million, experts say. However, terms can only be changed after EU's audit, which will be completed around November-December. (Vg 1 ) G.R.

Bratislava-B'pest exchange cooperation

As of December, players of the Slovak commodity exchange, the Komoditná Burza (KBB) Bratislava will be ableto trade in crop futures at the Budapest Commodity Exchange (BÁT), as laid down in the contract signed by thetwo parties yesterday. The cooperation is hoped to bolster the exchanges' market position in the EU and tap intothe structural similarities between the two Central-European commodity markets. KBB generated turnover of korona 304 million in H1. (NG 11) S.F.

Poland's clearing house opens KELER account

Poland's central depository and clearing house KDPW opened a securities account with Hungary's centraldepository KELER Rt on Oct. 4. KELER announced yesterday that by signing the contract, the two institutions hadagreed on the technical conditions enabling Hungarian issuers to appear on the Warsaw Stock Exchange.BorsodChem Rt will be the first Hungarian firm to list its shares on the Polish bourse, from Friday. MOL Rt hasalso taken the first steps toward a listing, registering as a public company in Poland on September 24. (Econews;MH 10)

Sony to produce DVD player-recorders in Gödöllo

Japanese electronics giant Sony plans to make 320,000 DVD player-recorders at its plant in Gödöllo, next year,MTI reported from Tokyo on Tuesday citing local press reports. The plant, which just started production of thedevices in September, will produce 170,000 DVD player-recorders yet this year. The Gödöllo plant was set up in1996 and, following a Ft 100 million investment, began making DVD players in 2001. Gradually, the plant'sproduction will be switched over to only DVD player-recorders, the report said. (Econews; MH 11, Vg 16)

TV2 revenue up

TV2 Rt, Hungary's second largest commercial TV channel, saw its revenues jumping more than 10% to Ft 2.57billion in July-Aug yr/yr. The company's advertisement takings were up 13.5% and 10.6% in July and Augustrespectively. This was due to a growing advertising market and TV2's enhanced ad sales strategy, which hasincreasingly relied on alternative advertising media, like text messages and the word wide web. (NG 7) S.F.

Water pipelines to be replaced

The Budapest Waterworks Rt will spend this year a record Ft 3.3 billion on upgrading old water pipelines in thecapital, double the amount of 2003, the company said in a statement. By the end of October, 50 km of rustypipelines will have been replaced by new ones, while another 20 km is set to go down by the end of the year.Budapest's obsolete water pipeline network is notorious for major bursts, which occur almost daily. (NG 5) S.F.

RWE name change

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RWE Umwelt Hungary Kft has been renamed AVE Hungary Kft, general manager József Hartdégen said.Hungary's largest waste management company was bought by Austrian Energie AG Oberösterreich for Euro 11.2million from German RWE group in May. AVE Hungary Kft has majority share in RWE Umwelt Miskolc Kft, RWEUmwelt Tatabánya Kft and AKSD Kft and minority share in Kaposvár Town Management Kft. The company groupemploys over 700 people and its turnover was Ft 4,84 billion last year. (Vg 6) G.R.

44 Hungarian companies at Bucharest fair

A capital goods fair opened in Bucharest yesterday and was attended by 44 Hungarian companies occupyingnearly 700 sqm. János Halász, who represents Investment and Trade Development Hungary (ITD Hungary) inRomania told a press conference that participants included small and medium enterprises as well as major manufacturers. Trade turnover between the two countries may reach a new record of $2 billion this year, Halászsaid, adding that currently 4,700 Hungarian companies were active in Romania, with an overall FDI value of $600m-670m, focusing on both Bucharest and the regions close to the Hungarian border. Top areas are theprocessing industry, IT, infrastructure, real estate, the automotive industry, textiles, and tourism. (MTI)

EconomicsGDP growth prediction, rising consumption

Market research firm Kopint-Datorg Rt stayed with its June prediction of a 4% GDP increment in 2004 but uppedits personal consumption growth forecast to 2.9% from 2.4% in a report publicized yesterday. It also predicted thatthe public-sector deficit would amount to 5.5% of GDP in 2004 (compared to the 4.9% it had predicted in June),calculated according to the European System of Accounts (ESA), the report says. It forecast a 4.8% of GDPdeficit for 2005. Kopint-Datorg set its estimate for 2004 inflation at 6.9%, up from its June figure of 6.8%, andstayed with its 4.6% inflation prediction for 2005. (MTI; NG 3, Nv 5, MH 9)

Hungary's borrowing costs drop at auction

Hungary's borrowing costs fell at a sale of Ft 30 billion of three-month bills. The securities were sold at an averageyield of 10.86%, 10 basis points less than at a sale a week ago, the State Debt Management Rt (ÁKK) said on its

Bloomberg page. A basis point is 0.01 percentage point. The average yield was 2 basis points higher than that onsimilar securities on the secondary market yesterday. The maximum yield at today's auction was 10.87% and theminimum 10.80%. The agency received 159 bids worth Ft 105.6 billion and accepted 73 of them. (Bloomberg; NG1, MH 13)

PoliticsParliament authorizes signing of EU ConstitutionBoth the government coalition (MSzP and SzDSz) and the opposition (Fidesz and MDF) voiced support for a billin parliament which would authorize the government to sign the European Constitution, MTI reported on Tuesday.In a keynote speech to the Parliamentary debate on the issue András Bársony, secretary of state at the ForeignMinistry said the treaty would be signed in Rome on October 29 by Prime Minister Ferenc Gyurcsány and ForeignMinister László Kovacs. (MTI; Nv 3)Tone of Hungarian politics "too sharp"

Ambassadors of the EU and NATO accredited to Hungary told Prime Minister Ferenc Gyurcsány they find thetone of Hungarian home politics "too sharp". "The ambassadors were slightly disappointed over the sharp tonethat occasionally characterizes Hungarian politics, saying that this is unusual in Europe," Prime Minister Gyurcsány said after the meeting, held in the Parliament building yesterday. Gyurcsány said this tone can bechanged with "patience, a great deal of calm and with due understanding shown for the efforts of the socialgroups behind the parties." "The ambassadors consider the economic growth in Hungary to be impressive," theprime minister added. (MTI; MH 6)

CoE warns Serbia over ethnic violence in Vojvodina

The Council of Europe's Parliamentary Assembly has warned Serbia over the anti-Hungarian attacks committed

in the Vojvodina region. In a resolution adopted at its meeting in Strasbourg yesterday, the assembly urged theBelgrade government to fully investigate the ethnically motivated incidents, punish the perpetrators and

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strengthen dialogue with the minorities' representatives. The CoE Parliamentary Assembly reviewed a report onthe Serbian situation yesterday, including the issue of ethnic tensions in Vojvodina. The part of the reportconcerning Vojvodina was more strongly worded than the original document due to proposals by some Hungariandeputies. (MTI; MH 7)

DomesticFinMin wants cooperat'n with Slovakian customs

Hungary has called for a closer cooperation with Slovakian customs authorities to combat the flow of cheap goodsbrought by private individuals, evading excise duties, from Ukraine and Romania through Slovakia into Hungary,the Finance Ministry announced yesterday. Finance Minister Tibor Draskovics has written a letter to his Slovakiancounterpart Ivan Miklos on the matter. Finance Ministry spokesman Ferenc Pichler said Hungary expected to fallFt 90 billion short of its VAT target set at the start of the year, partly because of the sale of cheap products fromRomania and Ukraine. (MTI Econews; Vg 5)

Outpatient privatization plan

The Health Ministry is planning to offer Ft 25 billion in low-cost credit through commercial banks to assist

healthcare employees interested in buying outpatient facilities. The ministry is to launch its Employee ShareOption Program next year in hopes that employee ownership could become dominant in the sector in three to four years. An opportunity for medical workers to acquire ownership in clinics will mark a new era in Hungarianhealthcare, but some of the financial aspects of the plan require clarification, said Dr Imre Varga, President of theMedicina 2000 Polyclinic and Outpatient Care Association. (Nv 4) P.P.

Dialysis treatment feels the pinch

Dialysis centers have warned that scarce funding is jeopardizing adequate care of their patients. The number of kidney failure patients requiring dialysis is growing by an annual rate of 8% in Hungary, but funds earmarked bythe National Health Administration Fund (OEP) for 2005 are only 1.5% higher than this year, President of theHungarian Nephrology Association Sándor Túri said. The euro 89 paid by OEP to private and non-profit clinics per dialysis treatment is the lowest among EU members and the rest of Europe. Kidney transplants, which offer along-term solution to the problem, are performed at state-of-the-art level in Hungary, but only 300 surgeries takeplace each year due to a shortage of donors. (MH 5) P.P.

Power producers seek higher emissionsHungarian electricity generators, such as the power plants of Aare-Tessin AG für Elektrizitat and AES Corp, areasking the government to increase the allowances for carbon dioxide emissions they have been given as thecountry prepares to join a EU emissions-trading program. The government will discuss the requests companiesmade last week, when they received a draft plan for allocating the allowances. Hungary handed out 29.4 millionmetric tons of allowances credits, worth as much as euro 250 million ($309 million), including 15.8 million tons toenergy producers. That was about 2 million tons less than the companies expected. The allowances in effect arelicenses to emit carbon dioxide. (Bloomberg; NG 1)Gov't spending on water

Ft 129.3 billion was spent on National Environmental Program from the state budget in 2003, report of Environmental and Water Ministry says, about 55.5% of the sum originally planned. Ft 51.9 billion was dished outfor water protection, of which Ft 37.8 billion on wastewater management. Ft 19.2 billion went on environmentalsafety, Ft 14.9 billion on improving quality of environment in towns and Ft 8.2 billion in rural areas. This last figureis less than 20% of the originally planned sum. The most successful area of the program was the shaping of environmental regulation to comply with EU norms. (Vg 7) G.R.

Action against dialing viruses

Eighteen Hungarian telephone service providers agreed with the National Telecommunications Authority (NHH)yesterday not to connect expensive international calls automatically while using internet. This will help protect the

clients from giant telephone bills due to viruses dialing overseas numbers. Although such programs haveappeared in Western Europe in Hungary they have as yet caused less damage. However, providers were spurred

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to action by phone bills of several million forints. The companies compile a list of numbers dialed by viruses, andinstead of connecting them automatically, ask the client first. (Nb 16) G.R.

No to airport devlp't

Life in Szigethalom will become unbearable if the government approves the State Privatization and Holding Rt's

(ÁPV) proposal to upgrade a former military airfield in nearby Tököl into an international airport for low-costcarriers, said Mayor László Fáki, speaking for the 14,000 local residents. Concerned about increased noise andpollution levels, Szigethalom, a satellite town south of Budapest, is determined to go into battle against ÁPV over their plan to license the 470-hectare airbase as a public civil aviation facility, the Mayor said. (Nv 16) P.P.

StockwatchBUX index: BUX Close: 12824.87 Change: +158.71 (1.25%)Stock Closing price Daily change (%) Average price VolumeMOL 9,985 1.5 9,912 31,308Matáv 838 1 837 2,504,560OTP 4,505 0.4 4,528 1,069,752Richter 24,100 2.1 24,038 66,937

Egis 9,780 0.3 9,762 31,468 Antenna 3,810 -0.9 3,820 13,594TVK 4,600 3.4 4,563 19,933Rába 660 0 654 2,754Budapest Stock Exchange, Oct 6

ExchangeIn forints, Oct 6, 2004

National Bank of Hungary

Fixed Middle RateEUR 1 245,74USD 1 200,07GBP 1 356,82

CAD 1 157,14CHF 1 158,23JPY 100 180,36CZK 1 7,83PLN 1 56,87

Weather Tomorrow: p/cloudyHigh 21°C (70°F)Low 9°C (49°F)

07/10/2004

BusinessAgMin seeks extra storage due to bumper harvestThe Agricultural Ministry is looking for extra storage because of the record grain growth this year, announcedFülop Benedek, public administration state secretary of the Ministry. The Defense Ministry has offered spaceapproximately 35,000 - 40,000 sq meters, but only 13-15% of that was found appropriate for grain storage byConcordia Rt and the Agriculture and Rural Development Office. Without ample storage space at hand a part of corn grown this year might be stored on the ground covered by foil, Benedek added. (Vg 1) R.G.László Némethy named new AmCham chairmanCEO of consultancy Euro-Phoenix Kft László Nemethy was elected chairman of the American Chamber of Commerce (AmCham) in Hungary at a general meeting to mark its 15th anniversary, AmCham said on Monday.Nemethy replaces Péter Hegedus, managing director of ABB. Nemethy said AmCham's goal remains to improvethe Hungarian business environment and boost the competitiveness of Hungarian markets. (Econews; Vg 4, Nv 5)

Sale of VCP's BorsodChem stake completedThe sale of a 62.6% stake in chemicals company BorsodChem Rt by Vienna Capital Partners has beencompleted, BorsodChem announced late yesterday. The value of the stake on offer was Ft 88.245 billion,

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excluding an over-allotment option of 4 million shares held by the sale's organizer HSBC. As a result of the sale,VCP's stake in BorsodChem was reduced to 23%, and no other individual investor has more than 5%. The sale'sprice valued BorsodChem to Ft 140.93 billion. (Econews; Vg 17, Nb 16)Matáv's signs with T-Com and T-MobileTelco Matáv Rt said yesterday that it will soon sign a cooperation agreement with two other Deutsche Telekomgroup members, T-Com and T-Mobile International. The agreement will come into effect from the start of next

year. T-Com, which provides fixed-network products and services, will share its development, marketing andstrategic expertise to assist Matáv with its fixed-line services, and T-Mobil International will assist Matáv's mobileservices subsidiary T-Mobile. The partnerships will build on the companies' synergies, but will not in any wayaffect Matáv's ownership structure, its company charter or its boards, according to the statement. (Econews; Ng12)Dorotheum buys Orex jewellery stores Austrian auction house and jewelry seller Dorotheum has bought Hungarian jewelry retail chain Orex Rt for Euro4 million. Orex shareholders approved a Ft 715 million capital raise in the company, and Dorotheum owner Onetwo Beteiligungs GmbH will acquire the newly issued shares. Buying the shares is the condition to Dorotheumacquiring Hungarian Investment and Asset Management (MBV) Orex stake. After the capital increase OneTwoBeteiligungs will hold a 75% stake in Orex. The Orex shares will be issued at their nominal value of Ft 4,600. Thecapital will be used to finance current assets and developments. After the transaction is closed Dorotheum is to

make an offer on the remaining Orex shares at the price agreed on in the deal with MBV. The price has not beenmade public. (Econews; Vg 13)No punitive U.S. tariffs for HungaricumUnique Hungarian products, such as Tokay wines and paprika which carry the "Hungaricum" designation, are noton the list of products the U.S. had threatened to place punitive tariffs on from November 1, the Ministry of Foreign Affairs said yesterday. The European Commission and the U.S. have agreed to extend negotiations ontariffs by six months, and the EU has moved back the date for introducing the tariffs until the end of the talks. TheU.S. had threatened to put the tariffs in place because of the effects EU expansion had had on the U.S. markets.(Econews; Vg 5, MH 10)CytRx purchases assets of BiorexLos Angeles-based pharmaceutical company CytRx announced that it has purchased assets of Veszprém-basedpharmaceutical research company Biorex Research and Development Rt for USD 3 million. The company, whichcurrently employs 100 people, was founded in 1988. British and US owners raised the company's registeredcapital by USD 4.75 million in 1997. US pharmaceutical Abbott Laboratories also bought stakes in the companythe same year. (Vg 13) R.G.Magyar Posta's Ft 5.1 bln pre-tax profitMagyar Posta Rt will probably reach a Ft 5.1 billion pre-tax profit in 2004, which is Ft 3 billion higher thanprojected before, CEO Pál Szabó told Hungarian News Agency MTI. Magyar Posta's net revenue will be Ft 155billion this year, which is Ft 15 billion more than in 2003, Szabó said. This year only 650 employees have been or will be let go from Magyar Posta, Szabó said, but the professional trade unions say this number may be as highas 3,000. (Ng 4) M.K.Pick to dismiss 198 instead of 450Meat processor Pick Szeged Rt will dismiss only 198 people instead of the planned 450, Hungarian Radioreported. Pick could find other positions within the company for 200 people and 50 others can not be dismissedfor legal reasons that have not been revealed. Pick announced the dismissals, when the company stopped its

own pig breeding branch earlier this year. (Ng 4) M.K.Premier outlets center to openRaiffaisen bank Rt's real estate arm and Miller Developments will open a Euro 25 million outlet mall, calledPremier Outlets Center, outside Budapest on November 11, Raiffeisen's Jozsef Takács and Miller's David Carver said yesterday. Both of the companies own half of the project. The 13,000sqm outlet mall is located on a 7-hectare lot in Biátorbágy and comprises 46 retail units, of which 28 have now been leased to, among others,Levi's, Adidas, Nike, Tom Tailor, Camel Active and Mexx, for 5 to 10 years. The leases for a further 18 stores areunder negotiation, and nine of the interested companies have already signed preliminary contracts. (Econews: Ng4, MH 10, Vg 13)Lidl to open next weekGerman food retailer Lidl plans to open its network of shops in Hungary in the middle of October, according tounnamed sources. Lidl is constructing 1,600-2,000 sq.m. stores in 12 towns in Hungary, these will be opened at

the same time. Lidl's Hungarian subsidiary has recently opened its 30,000 sq.m. logistics center inSzékesfehérvár. Lidl announced last year to open a chain with 30 shops in Hungary within two years. (Ng 5) M.K.

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MOL eyes North Africa with INAHungary's major oil and gas company MOL Rt will join forces with Croatian peer INA to examine exploration andproduction in north Africa, MOL's Chief Strategy Officer Michel-Marc Delcommune told Reuters at an investor conference in Austria yesterday. "INA is active in Syria and Egypt and together we are looking at Libya and Algeria," Mr. Delcommune told Reuters. When asked whether MOL was interested in acquiring explorationlicences in Libya he said MOL was looking at such possibilities and it could take one-two years to close a deal.

MOL holds a 25% stake in Croatian oil company INA. (Econews; Ng 11)Semilab buys SemiTest stocks and tech.Hungarian-owned semi-conductor production company Semilab Rt has purchased the stocks and technology of American SemiTest Inc., according to press information. Semilab plans to sell its products in the U.S. and in Asia.Semilab did not disclose the value of the transaction. Previously Semilab used to be owned by Videoton HoldingRt and Flexpert Technical Consulting Kft, but Semilab did not reveal its present owners. (Ng 5) M.K.Wind power park to be built in BakonyIrish SWS and Fleming Construction Ltd plans to build a wind power park in the Bakony mountains, near Veszprém, west Hungary, Veszprém local council confirmed. The Irish investors established Euro Green EnergyKft some months ago to carry out the euro100 million construction. The produced energy will be sold to localpower grid operators. The wind power plant will employ 50 people and will supply energy for 50,000 households.(Ng 5) M.K.

Magyar Posta calls car fleet tender Magyar Posta Rt has announced a public procurement tender for the long-term rental of 190 cars and the fleetmanagement of the company's vehicles. Bidders must own 165 medium-size cars and 25 vans and participantsare allowed to make consortia. Bidders with a reliable fleet management background will be preferred, as theymust have one-year fleet management experience in the previous three years and also have an ISO qualitycertificate. (Ng 10) M.K.Pannonplast expects losses of Ft 1 blnPannonplast Rt's recently appointed chairman Balázs Bokorovics made statements yesterday suggesting that thecompany would end the year with net losses of Ft 1 billion or more, but would also have financial profits of Ft 450million or more in the second half. The company issued a profit warning in August saying it expected to finish2004 with losses of Ft 1 billion. Bokorovics said that he was "moderately pessimistic" about the figure. Thefinancial profits will come from the sale of Pannoplast assets, already under way, part of a mid-termreorganization program launched by the company's old management in the spring. A group of shareholders, ledby István Torocskei, made replacements to the (Econews; Ng 12)

EconomicsESA gen gov't deficit target setThe 2005 budget proposal set an ESA'95 general government deficit target, including local governments, of Ft1,046.7 billion, MTI Econews reported based on Finance Ministry information. The ESA deficit figure correspondsto 4.7% of next year's nominal GDP, projected at Ft 22,250 billion in the budget calculations. Including theposition of local councils, this year's ESA deficit target was revised upwards, from 4.7% to 5-5.3% of the GDP inSept. The GFS general government deficit target is Ft 1,033.1 billion for 2005. This year's GFS deficit target,excluding local councils, was upped from Ft 1,184.7 billion (5.8%) to Ft 1,335.1 billion in Sept. (Econews; Nv 1,MH 1,9)Budget: real wages to rise 3-4% in 2005

Prime Minister Ferenc Gyurcsány stated that the draft budget forecasts a 3-4% rise in real wages next year.Gyurcsány told reporters after a cabinet session yesterday this will bring the rise in real wages to 30% during thefour-year government cycle. He said the real value of pensions rose by 17% in 2002-2003, and will rise by afurther 24% in 2004-2005, under the draft. "We shall spend Ft 2,085 billion on pensions next year, 53% more thanplanned by the previous government in 2002," the prime minister said. (MTI; Nv 5, MH 1,9)Gyurcsány promises fair taxation in 2005The aim of the 2005 Budget is to make taxation more fair, Prime Minister Ferenc Gyurcsány said at the pressconference after the cabinet meeting yesterday. Gyurcsány said the government aimed to make tax burdens onfamilies with children more just, and improve the chances of young people buying their first homes. Gyurcsánysaid the budget allocates Ft 217 billion for home loan subsidies, and added that home buyers would be able to getgovernment subsidized home loans with a down payment of as little as 10% in 2005. (Econews; Nv 1, 5 MH 1,9)Ft 1,052 billion invested in SMEsState-owned SME development agency KVFP has pumped Ft 1.052 billion into businesses so far this year, CEOKrisztina Arato and chairman Viktor Deri said yesterday. KVFP has already decided to invest a further Ft 384million in five other businesses, and four investments worth Ft 315 million are under preparation. KVFP plans to

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make investments totaling Ft 1.9 billion by the end of the year. KVFP introduced a new, simplified product in August, which requires less data from applicants than normal capital investments. (Econews; Vg 4)Sept fiscal deficit Ft 91.8 blnHungary's fiscal deficit was Ft 91.8 billion in September, bringing the nine-month deficit to Ft1.284 trillion,according to the preliminary Finance Ministry report published late yesterday. The fiscal deficit was Ft 120 billionin August. The September deficit, calculated according to GSF, is well over the ministry's forecast of Ft 85.6

billion, as is the nine-month deficit, compared to the Ministry's forecast of Ft 1,277.9 billion. The Ministry recentlynamed a new deficit target of Ft 1,335.1 billion for the year, upping its target in terms of GDP from 5.8% to 6.5%.The nine-month preliminary deficit is already equivalent to 6.25% of this year's estimated GDP. (Econews; MH 9)

PoliticsNew Bp Admin head sees conflict of interestIt is a conflict of interest for Budapest Mayor Gábor Demszky to simultaneously hold an office as MEP, accordingto newly appointed head of the Budapest Public Administration Office Imre Forgács, who may elect to take legalaction in a few days. The fact that Forgács seconds the opinion of his predecessor László Felkai comes as asurprise, as the political motive behind latter's sudden and unexplained loss of favor with then-Prime-Minister-designate Ferenc Gyurcsány may have been to protect Demszky's position, opposition members of the Budapest Assembly suggested. Meanwhile, Free Democrat Demszky is losing popularity within its own party, unnamedsources claimed. Sensitive issues include a Ft 20 million windfall for BKV Rt CEO Botond Aba while the public

transport company is staggering under a Ft 43 billion debt, lack of progress and Ft 1.3 billion overspending in theMetro 4 project, the tram tender fiasco of picking the most expensive products that were all faulty, and Demszky'spenchant for perquisites such as cheap SUV rental from a municipally-owned company. (MH 2) P.P.Medgyessy to become roving ambassador Former Prime Minister Péter Medgyessy will become Hungary's roving ambassador, under a cabinet decisionyesterday, the government spokesperson told reporters. Boglár László, speaking after the first session of PrimeMinister Ferenc Gyurcsány cabinet, said the former premier will be in contact with international participants of economic life, for instance, in OECD and the EU institutions, and with scientific and professional organizations.She said the government has asked the ministers dealing with EU affairs to also involve Medgyessy in their work.(MTI; Nv 3)New gov't spokespeople namedPrime Minister Ferenc Gyurcsány introduced newly appointed government spokeswoman Boglár László and

spokesman András Batiz after the new government's first Wednesday cabinet meeting. László has worked ascommunications director at the Hungarian Development Bank (MFB) Rt for the past two years, and previouslyworked in broadcasting. Batiz presented commercial television channel RTL-Klub's Fokusz program. (Econews;Vg 5)

DomesticPM congratulates Hungarian Nobel winner Prime Minister Ferenc Gyurcsány yesterday congratulated Avram Hershko, born Ferenc Hersko in Hungary, onbeing awarded the Nobel Prize in Chemistry in 2004, thus becoming the 14th Hungarian winner of the prize. Theprime minister, referring to a telephone conversation with Hershko at a press briefing after the cabinet session,said Ferenc Hersko was born in Karcag in 1937 and has preserved his Hungarian roots both in his name and as alanguage. The scientist's family left Hungary in 1950. The Royal Swedish Academy of Sciences awarded theNobel Prize in Chemistry for 2004 jointly to two Israelis -- Avram Hershko and Aaron Ciechanover -- and an

American, Irwin Rose, "for the discovery of ubiquitin-mediated protein degradation", their work related to how thehuman body singles out unwanted proteins for destruction to defend itself from disease. Avram Hershko lives inHaifa, Israel and works at Technion - Israel Institute of Technology. (MTI; MH 1,20, Nv 12)

StockwatchBUX index: BUX Close: 12799.04 Change: (-25.83; -0.20%)Stock Closing price Daily change (%) Average price VolumeMOL 10,190 2.1 10,026 355,350Matáv 815 -2.7 819 1,460,189OTP 4,470 -0.8 4,480 518,375Richter 23,995 -0.4 23,879 40,408Egis 9,870 0.9 9,818 45,876 Antenna 3,830 0.5 3,846 34,043TVK 4,630 0.7 4,591 7,820Rába 640 -3 636 14,734

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Budapest Stock Exchange, Oct 7

ExchangeIn forints, Oct 7, 2004Fixed Middle RateEUR 1 245,83

USD 1 200,2GBP 1 356,44CAD 1 158,31CHF 1 158,16JPY 100 179,89CZK 1 7,82PLN 1 57,06

Weather Tomorrow: rainHigh 21°C (70°F)Low 12°C (54°F)

08/10/2004Business

Microsoft picks Hungary for service center

Software giant Microsoft has picked Hungary as the site for a new software service center, CEO Steve Ballmer said yesterday. Ballmer cited good business opportunities and qualified labor as the reason for choosing Hungaryout of several other countries as the site for the center. The center, which will correct software bugs andweaknesses, will employ 40 people at the start and as many as 300 people within three years, IT andCommunications Minister Kálmán Kovács said. (Econews; Nv 5, Ng 5, Vg 16, Nb 16)

BUX at world-class record high

The BUX index of the Budapest Stock Exchange Rt (BÉT) closed at a new record high of 12,994 points yesterdayfollowing a 38.52% gain in 2004. This means that Budapest has been one of the best performing stock marketsworldwide this year in close competition with the Vienna bourse, which rose 37.03% since Dec. 31. BUX'sspectacular march of progress was primarily driven by OTP Bank Rt and MOL Rt, both of which have gainednearly 70% this year; meanwhile the stock price of Matáv Rt and Richter Rt, the two other blue chips traded atBÉT, stagnated. In addition to BÉT, several other bourses in Central and Eastern Europe outperformed New York(?2%), Frankfurt (1.97%), London (4.8%) and Tokyo (6.35%), including the Bucharest Stock Exchange, whichincreased by almost 50%. BUX may rise to 13,400 by the end of 2004, but next year will see a more moderategain of 10%-20%, analysts opined. (Vg 1) P.P.

Euro 11 mln for Hungary's wine growers

Hungary's grape growers will be eligible for Euro 10.86 million in EU subsidies in the 2004/2005 marketing year -more EU subsidies than their wine-growing peers in any of the new EU member states, the EuropeanCommission said yesterday. The Commission has approved subsidies totaling Euro 450 million for 14 grape-growing member states, including 6 new EU members, only slightly more than the Euro 443 million allocated tothe EU-15's 8 wine-growing countries last year. (Econews; Nv 5, Vg 3)

PSzÁF rejects Amstel's offer for Brau

State Financial Institutions Supervision (PSzÁF) rejected the public purchase offer presented by brewery AmstelRt, a member of the Heineken group, for the buy-out of small investors in Brau Union Hungária Rt. The decisioncomes after the conclusion of a court case put forward by minority shareholders who attested that the offeredprice was too low in comparison with the price Amstel paid for the shares of Brau's Austrian parent company Brau

Union AG. Analysts say that Amstel will issue a new offer before the upcoming Brau AGM at the end of October,as a result Brau share prices skyrocketed. (MH 11, Vg 18) A.K.

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Nabi to cut a fifth of work force

Bus maker Nabi Rt said yesterday that it would cut 21% of its workforce, or 180 employees, in 2005. The cuts willbe made in two phases, the first in January and the second in April. Nabi said as well that it will streamline itsproduct portfolio, but this would not affect ongoing orders. In the future, the company will focus on a smaller number of products. It will also reduce production volume. (Econews; Ng 11, Vg 18)

PSzÁF fines Hamilton Ft 3 mln

Financial market regulator PSzÁF has imposed a Ft 3 million fine on brokerage Hamilton International Brokeragefor breach of regulation on activities and operation, PSzÁF announced in Magyar Tokepiac yesterday. PSzÁFdetermined that Hamilton's portfolio management and government securities deals were not in compliance withthe law. It also found that in certain cases such transactions were made from clients' accounts that fall in thecategory of financial services requiring PSzÁF's approval, which Hamilton did not possess. (Econews; Ng 12, MH13,)

ÁPV denies rumors of secret privatization plan

State Privatization and Holding Rt (ÁPV) issued a statement yesterday denying rumors concerning the upcomingprivatization of Hungarian postal services, Magyar Posta Rt and gambling monopoly Szerencsejáték Rt. ÁPVplans Ft 250 - Ft 300 billion revenue from privatizations in 2005, a level similar to 2004 the statement says. ÁPVissued the statement in response to Antal Rogán opposition party Fidesz MP's allegations that ÁPV has a secretbusiness plan for the next two years. (Nv 5) A.K.

IT alliance elects new president

Ákos Reszler, CEO of IT company Scansoft Recognita Rt was elected president of the Alliance of IT Enterprises,after his predecessor János Kóka was appointed Economy and Transport Minister of the newly formed Gyurcsánygovernment. (MH 10) A.K.

Private jet hire in Hungary

Netjets, the worlds largest private airways company starts offering its services in Hungary, PR-associate RobertDraniczki said. The American firm is owned by Berkshire Hathaway insurance company. It has 440 business jetsin America and 53 in Europe and offers them for rent. The planes are available within ten hours at any airport. Theclients can buy pre-paid cards containing a specified amount of hours flown. (NG 1) G.R.

Ft 5 bln worth of MKB II bonds for sale

Hungarian Foreign Trade Bank Rt (MKB) will hold an open auction for Ft 1 billion worth of its MKB II five-year floating-rate bonds on October 11. MKB has said that it will accept over subscription up to Ft 4 billion. Netminimum price at auction will be 99.99% of nominal value. The bonds, which pay up on September 10, 2009 willcarry an annual interest rate of 11.27% (three-month BUBOR +0.25%) for the period between September 10,2004 and December 10, 2004. (Econews)

PSzÁF to take two-pronged approach

Hungary's financial market regulator PSzÁF will apply its resources equally to supervising the market as well as tosupervising market players, creating two separate divisions within the authority responsible for each area, PSzÁFsaid yesterday. PSzÁF supervisory board chairman István Farkas said the authority's aim with the change was toinclude companies which do not hold a license to provide financial services, but do in fact provide them. Over thelast several years many Hungarians have lost their savings after putting their money into investment schemes runby just such companies, and have then found legal recourse difficult because the companies - which legallyneeded no license to provide their services - were outside of PSzÁF's jurisdiction. (Econews)

Démász opens Ft 1 bln transformer in Baja

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Regional electricity distributor Démász Rt has opened a Ft 1 billion transformer station in Baja (South Hungary)yesterday. The two 25MVA-stations will ensure an uninterrupted electricity supply for 20,000 of Baja'shouseholds, and will also provide enough extra power for the city's industries and its future electric railway,Démász CEO Attila Dervarics said. Dervarics said the transformer would meet the region's growing electricityneeds for the next ten years, noting that demand grows 1.5% every year in the region. (Econews)

Court gives go ahead for subway construction

The Municipal Court of Budapest rejected the lawsuit filed by various civil groups representing residents livingalong the planned route of the M4 subway line. The civil groups attacked the building permit of the line on thegrounds that it does not contain instructions for the minimum distance the line should be away from residentialbuildings. The groups also disputed the imposition of a Ft 1.7 million proceedings fee. The court decision givesthe final go-ahead for the construction of the M4 line. (Nv 4) A.K.

Record rise in DVD sales

DVD player sales shot up by over 100% in H1 yr/yr from 53,000 to 124,000, a trend mostly due to a 20%-50%drop in prices in the same period. With still only 9% of Hungarian households owning a DVD according to market

research company GfK Hungária Rt, vendors are hopeful that the sales will continue to grow at a similar rate. Thetwofold increase in DVD player sales was paralleled by the number of music DVD's sold in H2, which totaled218,000. Meanwhile, VHS equipment is becoming less popular, with 52 of 100 households boasting a videotapeplayer last year, down from 55 in 2002. (Vg 1) P.P.

Economics

2005 budget a step toward eurozone

Finance Minister Tibor Draskovics called the government's 2005 budget another step towards introducing theeuro in 2010, before submitting the budget to the Speaker of the House Katalin Szili. Other priorities of the budgetare the creation of new jobs, supporting younger people and families with children, developing infrastructure and

making the state thriftier, Draskovics stressed. Draskovics said that the budget would be tight in most areas, butsome would in fact be better off, citing a 6% rise in health care spending and a 13% increase in agriculturesubsidies to Ft 328 billion, of which half is expected to come from EU coffers. (MTI-ECONEW; Ng 1, Nv 1, MH 2)

Incentives to hire young staff

From Jan 1, Companies may get half of the social security charges back if they hire new staff below the age of 25years or women returning from maternity leave, according to a government draft. The refund will be available after nine months of employment and the employees must be kept for further nine months. The gross salary may be upto Ft 90,000. The social security charge is 29% of the gross payment now. (NG 1) G.R.

2005 motorway funding in PPP constructions

The 2005 budget continues funding for motorway construction projects in the form of Public Private Partnerships(PPP), Finance Minister Tibor Draskovics said yesterday after submitting the budget to parliament. PPPconstructions are already being used in both the construction of a stretch of the M5 motorway, and another stretch, soon to start, of the M6. By granting concessions to private companies to operate the motorways, theexpenses become leasing costs in the budget, Draskovics said, adding that the state would pay Ft 22 billion in2005 for upkeep of the M5. (Econews; Ng 1, MH 3)

Industrial output up, rate down

Hungary's industrial output rose by 6.2% yr/yr in August, according to unadjusted figures of Central StatisticsOffice preliminary report. Working-day adjusted growth rate was 3.6% yr/yr that is less than half of July's 7.6%. In August alone, seasonally- and working-day adjusted rate even decreased by 1.7% compared to July. Industrial

output of the first eight months was by 9.2% higher than in the same period of 2003. Analysts expect industrialoutput growth of about 9% - 11% for the whole year. (NG 3) G.R.

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Bankcards gaining popularity

The proportion of bankcard usage is increasing. For the first time in Hungary over 40% of bankcard transactionswere made at POS-terminals of shops in the first half of 2004, according to a report of National Bank Rt (MNB).55% were withdrawals from ATMs and 3% pre-paid cell phone payments. The number of POS-terminals alsoincreased from 24,395 of Dec 31 to 27,241 of June 30. The number of ATMs decreased by 66 to 2,909, 29.4% of

them is in Budapest. MasterCard has 62.2% market share, with over 4 million bankcards while Visa has 34.2%.(NG 4) G.R.

Overwhelming applications for EU grants

The National Development Bureau (NFH) has been inundated with over 11,000 applications for EU grants sinceJan 1 when central funding sources opened to Hungarian companies and NGO's, according to József Veress, asenior executive with the office. 36 of the 63 funds for 2004 had to be closed for the year due to the large number of applications, with grants totaling Ft 110 billion already approved and approximately the same amount stillavailable. Unfortunately, potential recipients based in less developed parts of the country still do not believe thatthey could succeed, Veress said. Another problem is the high ratio of formal errors, which occurred in 40% of submissions in certain categories. (Vg 1) P.P.

Hotel occupancy up yr/yr

The occupation rate of three or more stars hotels was 72% in September, according to a report of CentralStatistics Office (KSH). That is higher than 66.8% of July but slightly lower than 75.8% rate of August. In first ninemonths of 2004, 62% of the hotel rooms were occupied on average. The number of guest nights increased by4.5% yr/yr in September while gross incomes of hotels grew by 5.3% yr/yr. (NG 3) G.R.

Politics

Demszky resigns MEP post

Budapest Mayor Gábor Demszky said yesterday that he would resign from his post as a Member of the EuropeanParliament. The move follows a heated dispute in the municipal council over whether the mayor could legally holdboth posts and the opposition demands that he resign as mayor. On Wednesday, the head of the Municipal Administrative Bureau, the legal arm of the city, stated that the bureau considered the two posts incompatible.Demszky has been mayor of Budapest since 1990. (MTI; Nv 1, MH 1, Ng 3)

Hungary, New Zealand to boost cooperation

Hungary and New Zealand will intensify inter-parliamentary cooperation to boost two-way trade and tourism,Hungarian House Speaker Katalin Szili said after talks with New Zealand Governor-General Silvia Cartwright inBudapest yesterday. Cartwright is in Hungary for a five-day official visit at the invitation of President Ferenc Mádl.Earlier yesterday, she exchanged views with Supreme Court President Zoltán Lomnici on the structure andadministration of Hungary's judicial system. (MTI; Nv 3)

House Speaker joins anti-fascist demo

Speaker of Parliament Katalin Szili yesterday added a flower of her own to a huge bouquet in front of Budapest'sHouse of Terror Museum, symbolizing flower power as part of an anti-fascist demonstration initiated by a dailypaper. "We cannot allow the crimes of the past to poison the present or stifle our future," Szili wrote on asignature-collecting poster outside the building. The ongoing demonstration, organized by the daily Népszava,followed an announcement by a neo-Nazi group that it planned to hold a demonstration at the museum onOctober 15, to commemorate the start of a period of Nazi rule in Hungary in 1944. (MTI; Nv 1)

Center-left leaders to meet in Hungary

Center-left heads of state and governments of 14 countries will be attending the Progressive Governance summitto be held in the Hungarian government's holiday home in Balatonoszod on October 14-15, the government

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spokespersons told reporters yesterday. The presidents of Poland, Chile and South Africa, the German chancellor as well as the prime ministers of the Czech Republic, Romania, Great Britain, Spain, Sweden, Canada, Ethiopia,South Korea and New Zealand will be the guests of Hungarian Prime Minister Ferenc Gyurcsány, governmentspokespersons, Boglár László and András Batiz, said. (MTI)

Domestic

Healthcare workers hold warning strike

Healthcare workers in several cities held an eight-hour warning strike yesterday, demanding higher pay, better working conditions, and increased staffing. Staffs in hospitals and clinics in Szeged (S), Kistelek (S), Pécs (S),Miskolc (NE), Dunaújváros (S), Székesfehérvár (W), Szentes (E) and Veszprém (W) went on strike from 8 a.m. to4 p.m. but kept up all services needed for patient care. In some places hospital management wore blue arm-bands overtly symbolizing their support for the strikers. (MTI; MH 1, Nv 1)

Stockwatch

BUX index: BUX Close: 12993.61 Change (+194.57, +1.52%)

Stock Closing price Daily change (%) Average price VolumeMOL 10,650 4.5 10,511 994,615Matáv 820 0.6 826 1,209,091OTP 4,480 0.2 4,455 386,494Richter 24,150 0.6 23,840 50,802Egis 10,050 1.8 9,960 35,140 Antenna 3,860 0.8 3,838 16,724TVK 4,600 -0.6 4,570 8,608Rába 640 0 632 50,802Exchange

In forints, Oct 8, 2004

FIXED MIDDLE RATEEUR 1 245,82USD 1 200,1GBP 1 355,78CAD 1 158,83CHF 1 158,26JPY 100 179,9CZK 1 7,84PLN 1 56,82Weather

Tomorrow: rain

High 18°C (64°F)Low 6°C (43°F)

11/10/2004Business

6 motorway sections to be built in a concession

The government plans to have six motorway sections built in a concession to save on construction costs,according to press information. Winners of the concessions may sign 20-25-year agreements with the government

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to gain the money back that they have invested in the motorways. The sections for concession will be Görbeháza-Nyíregyháza (M3), Görbeháza-Debrecen (M35), Zamárdi-Balatonszárszó (M7), Balatonszárszó-Ordacsehi (M7),Ordacsehi-Balatonkeresztúr (M7) and the Danube bridge at Dunaújváros (M8). The total construction cost of these sections may be Ft 403 billion. On related news, motorway stickers will get 15% more expensive next year,four-day stickers will cost Ft 1,120, while 10-day stickers Ft 2,300. (Vg 4, MH 9) M.K.

PBS to invest Euro 5 mln in Budapest

Austrian office supply provider PBS Holding wants to invest Euro 5 million into building a new logistics center inBudapest, managing director of PBS-Hungária Kft Balázs Iván said. PBS will spend the first Euro1 million onextending its current warehouse base, Iván said. PBS wants to serve the Hungarian market and other Central andEastern European countries from the new logistics center, Iván said. PBS-Hungária reported a Ft 5.2 billion netrevenue last year. (Vg 5) M.K.

BUX flirts with 13,000-point mark

The Budapest Stock Exchange's BUX index rose by 3.39 points last week and closed at 12,955 points on Friday.On Thursday, the BUX closed at a record 12,993.61 points, and Friday a.m. sales flirted around the 13,000-point

mark until negative U.S. macro data came out. Overall, the blue chips firmed during the week, with oil group MOLRt finishing at a historic high of Ft 10,695/share on Friday, up by 10.83%. Telco Matáv Rt firmed by 0.86% to Ft825, drug maker Richter Rt by 0.42% to Ft 23,700 and retail bank OTP Rt by 0.20% to Ft 4,449. (MTI; Nv 5, Ng 7)

Hamilton offers Euro based plan

For the first time in Hungary, brokerage Hamilton International Brokerage Rt offers Euro-based Managed Futureswith earnings level of 15%, as well as 25%-30%, depending on risk factors. Hamilton's goal was to come up witha product, which promises higher earnings than deposit rates, securities, and stocks, with an optimal risk level.The brokerage was recently fined by financial market regulator PSzÁF for breach of regulation on activities andoperation. (Nv 5) P.O.

BorsodChem debuts on Warsaw exchange

Plastics manufacturer BorsodChem Rt's stocks debuted at the Warsaw Stock Exchange on Friday following anIPO of 7.3 million shares at an issue price of 32.89 zloty. The first ever Hungarian listing on the Polish boursewas, however, eclipsed by the forthcoming PKO Bank issue; trading volume on the first day totaled 124,000, notquite half of the corresponding figure at the Budapest Stock Exchange Rt (BÉT). The new stock opened at 34.7zloty and fell 3% to 33.5 zloty by closing time. The 14th largest company listed in Warsaw, BorsodChem isexpected to be included in the bourse's WIG-20 blue chip index and reach a trading volume comparable toBudapest, CEO László F. Kovács said. With a 13-year presence in Poland, the company is looking to participatein the privatization of Polish state-owned chemical industry players, most notably TDI maker Zachem. (NG 7) P.P.

Share delistings pending court decision

Ongoing lawsuits have continued to hold up the delisting of shares in regional electricity distributors owned by theHungarian subsidiary of German power giant E.ON. E.ON made public purchase offers for shares in electricitydistributors Édász Rt, Dédász Rt and Titász Rt in spring of this year, gaining stakes of more than 90% in eachone. E.ON then exercised its purchase option on all remaining shares. However, small shareholders in thecompanies protested the "second" buyout offers and took their cases to court. Shareholders in one of thecompanies, Titász, lost their case and were forced to accept E.ON's original offer for their invalidated shares, butcases filed by Édász and Dédász shareholders are ongoing. (Econews; Ng 7)

Hungarians wary of mobile banking

Although 7.7 million mobile phones are in use in Hungary, only half a million owners subscribe to mobile bankservices. According to financial institutions, many mobile phone users find the subscription fees to these services

too high; others do not trust mobile banking. Currently, only three banks offer services that can be initiated by theclient, but these transactions are all WAP-based. At OTP Bank Rt, Hungary's largest lender, one in every ten

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retail client subscribe to mobile banking, while at CIB Bank Rt, almost half of the 200,000-strong retail clientele isa subscriber. (MH 1) P.O.

Hungarian to head INTOSAI

State Audit Office (ÁSz) President Árpád Kovács will head the Governing Board of the International Organization

of Supreme Audits Institutions (INTOSAI) for three years from the second half of October. The organization holdsits international congress in the Hungarian capital from October 10 until this Saturday, after which Kovács willofficially become the president of the organization's Governing Board. INTOSAI announced in 1999 that the nextEuropean president leading the organization would come from Hungary. (MH 4) P.O.

Hungary reconnects with Balkans

Cut into two by the Balkans war, the united electricity grid of continental Europe (UCTE) has been recentlyreunited after four years of preliminary work, Hungarian grid operator Mavir Rt said. Seven of the countriessevered from the main trunk of the network back in 1991, including Bosnia and Herzegovina, Serbia andMontenegro, Macedonia, Albania, Greece, Bulgaria and Romania, are to be reconnected partly through Hungaryafter the trial run; this will boost the import potential for Hungarian consumers by 200MW, Mavir said. As an added

bonus, the extension of the system will increase power supply stability and reliability in Hungary, since the newmembers have also joined UTCE's mutual assistance agreement. (NG 4) P.P.

Bilfinger wins Euro 188 Mln order

Bilfinger Berger AG, Germany's second-largest builder, won an order worth Euro 188 million euros to help build atoll way in Hungary. The total value of the project is 470 million euros, the Mannheim-based company said in afaxed statement. Austria's Porr Infrastruktur GmbH and Swietelsky International Bauges mbH will also take part inthe project, Bilfinger said. The companies will plan, finance and operate the toll way for 22 years, Bilfinger said.Hungary will pay a monthly fee for the operation of the toll way, the builder said. (Bloomberg)

Musashi progressive social schemes

Auto parts maker Musashi Hungary Ipari Rt spends more than Ft 100 million, or almost Ft 400,000 per employee,on social allocations annually, CFO Krisztina Gulyás said. Employees can choose from three menus for a dailyfee of Ft 100, while those working the night shift can have free sandwiches from the vending machines. Work-clothes, protective garments and regular medical check-ups are also part of social allocations. Company busestransport employees between their homes and the factory, and Musashi offers trainings, as well as languagecourses. The Japanese subsidiary just recently started operating with Euro 15 million worth of new productionequipment at its plant in Ercsi, south of Budapest. (Nv 5) P.O.

Trade corporations to launch academy

The national confederation of Hungarian trade corporations (IPOSZ) plans to launch an international businessacademy next year jointly with partner organizations in Slovakia and Poland. IPOSZ vice-president Robert Kassai

said that two- year courses will be offered to owners of small businesses and will include five subject areas --finance, IT, marketing, designing business plans, and networking. Kassai also said that negotiations with theCzech guild were underway about joining the project. The EU is expected to recognize the academy's degree.(MTI)

Economics

Hungary's dynamic growth

Hungary's economy is on a dynamic growth trajectory, with yr/yr GDP growth expected to accelerate from 2.9%last year to 3.6% in 2004 and 3.7% in 2005, a report by the European Commission (EC) concluded based on Q1capital investment figures in the processing and construction industries. Economic growth in Hungary will be

propelled by exports for years ahead with domestic consumption sagging, according to the EC. The 4.0% inflationtarget set by the Finance Ministry and the Central Bank of Hungary (MNB) for Dec. 2005 is not considered

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realistic anymore; 4.2% is a more likely estimate with inflation expected to gradually decrease from 6.9% this year to 2.8% in 2007, leading to Euro zone entry in 2010 or 2011. Unemployment is likely to stabilize around 5.8% for years, while Hungary's budget and current account deficit and may respectively diminish from 5.1% to 3.2% andfrom 8% to 6.5% of GDP between 2004 and 2007. (NG 3) P.P.

August trade deficit Euro 370 mln

Hungary's foreign trade deficit was Euro 370 million in August, with exports rising 14.3% yr/yr to Euro 3.1 billionand imports rising 12.2% to Euro 3.47 billion, according to preliminary figures published by the Central StatisticsOffice (KSH) on Friday. According to final figures, the July trade deficit was Euro 380 million as against apreliminary Euro 360 million published on September 7. According to preliminary figures, exports amounted toEuro 27.437 billion in the first eight months and imports came to Euro 30.784 billion, resulting in a trade deficit of Euro 3.347 billion, as against a deficit of Euro 3.023 billion in the same period last year. (Econews; Ng 3)

Central bank net foreign assets fall

Net foreign assets of the central bank fell by a slight Ft 37 billion in September, including the effect of exchangerate changes, figures published by the National Bank of Hungary (MNB) Rt on Friday show. The MNB's net

foreign assets stood at Ft 2.1 trillion at the end of last month, up Ft 120 billion from the end of last year as theresult of Ft 319 billion fall in gross foreign liabilities and a Ft 198 billion fall in assets. Net debt of the generalgovernment owed to the central bank rose by a marginal Ft 2.4 billion in September to Ft 43.6 billion, down Ft304.8 billion from the end of last year. (Econews)

Growth of monetary base slows in Sept.

The annualized month-on-month growth index of the monetary base (M0) stood at 107.2% in September, up 2.8%age points from August, the National Bank of Hungary reported on Friday. In September, the monetary base fellby Ft 6.1 billion to Ft 1,876.2 billion. The monthly average stock of currency in circulation rose Ft 0.9 billion to Ft1,437.4 billion and the monthly average current account balances of financial institutions 19/64 grew by Ft 3.4billion to Ft 437.1 billion. The monthly average stock of overnight deposits of other monetary financial institutionsfell Ft 10.4 billion to Ft 1.8 billion. (Econews; Vg 10)

No agreement on wage rises

The National Interest Coordination Council (OET), an interest group for employers and employees, failed to reachan agreement on wage rises and the new minimum wage for next year at a meeting on Friday. Trade unions wereasking for a 6-8% gross wage rise and a new minimum wage of Ft 62,000. Employers were offering a 4.5% grosswage rise and a Ft 55,400 minimum wage. Representatives of the government argued that any wage rise over 4%would jeopardize programs intended to boost employment. However, the government proposed reducing thedifference between the net minimum and net average wage, to bring the ratio closer to that in the EU. (Econews)

Farmgate prices rise 2.6% yr/yr in Aug.

Farmgate prices rose 2.6% yr/yr in August 2004 and 5.9% in the first eight months of the year, the CentralStatistics Office (KSH) reported on Friday. Farmgate prices for crops, excluding fruits and vegetables, rose 5.0%yr/yr in August and 0.3% yr/yr in the first eight months. Including price changes of fruits and vegetables, cropprices fell 4.2% yr/yr in August and rose 8.2% yr/yr in the first eight months. Farmgate prices for livestock rose10.6.% yr/yr in August and 3.3% yr/yr in the first eight months. (Econews)

International reserves Euro 10.476 bln

Hungary's international reserves were Euro 10.476 billion at the end of September, according to preliminary MNBfigures published on the central bank's website. Foreign reserves fell Euro 118 million in September anddecreased Euro 194 million in a year, but rose Euro 335 million in nine months. In dollar terms, internationalreserves were USD 12.906 billion at the end of September, up USD 110 million in September and up USD 115

million in nine months. (Econews)

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Politics

Cabinet meets informally in Balatonoszod

The ministers in PM Ferenc Gyurcsány new cabinet are shaping the outlines of the work they expect their ministries to do in conformity with the government's platform, at a two-day informal meeting which began inBalatonoszod, W Hungary, on Saturday, a government spokesperson said. Boglar László said that after consulting the ministers, the prime minister would himself determine the duties and priorities for the governmentover the next 20 months. In related news, according to daily newspaper Népszava, three new political statesecretaries will be named during the upcoming week: former privatization minister Tamás Suchman will join thenewly founded ministry of rural development, the state secretary of the Agriculture Ministry Tibor Szanyi will workfor the Economy and Transport Minister, while a chief advisor of National Development Office (NFH) József Veress will become the political state secretary at the Prime Minister's Office. (MTI; Nv 1, Vg 4, Nv 1, MH 1) P.O.

Domestic

Bor presented Bolyai Award

Laser physician Zsolt Bor, a member of the Academy of Sciences, was awarded the prestigious Bolyai Award for outstanding achievement in scientific research and development. Bor also heads the Department of Optics andQuantum Electronics at the József Attila University of Szeged. Former Pharmavit Rt owner Imre Somody foundedthe award with his wife back in 2000, when the first bronze statuette was awarded to neurobiologist TamásFreund. The board of trustees, which named Bor as the third winner in the history of the award, was lead byPresident Ferenc Mádl. (MH 1, *Nv 1) P.O.

Hungary to introduce universal EU driver's licenses

Hungary, along with other EU member countries, will introduce new driver's licenses, which will now have auniform design all over the EU, state secretary of the Ministry of Economy and Transport Zoltán Kazatsayannounced. The new plastic card licenses will be valid for ten years, Kazatsay said. Currently there are 110

different driver's licenses int he EU, some of them are life-long valid. The new licenses will now always require amedical check-up as well as a new photo. Ng 1, Vg 3) M.K.

Hungarian author gets German book award

The German book industry's Peace award, the country's highest literary and social prize that can also be given tonon-residents, was presented to Hungarian author Péter Eszterházy in Frankfurt yesterday. He is the secondHungarian writer to win the honor, which was founded in 1950 and carries a cash prize of Euro 15,000, after György Konrád won it in 1991. (MTI; Nb 1, MH 1, Nv 6)

Ex-National Police chief for Europol's director

Ex-head of the National Police László Salgó is a candidate for the position of director of European Union policeorganization Europol. Since a French and a German candidate split the votes in the competition, the lucky winner can be Salgó who used to work for the Hungarian embassy in The Hague. Salgó speaks English well and wishesto continue his career in an international position. (Nb 7) M.K.

Stockwatch

BUX index: BUX Close: 12954.69 Change: (-38.92, -0.30%)

Stock Closing price Daily change (%) Average price VolumeMOL 10,695 0.4 10,635 412,721Matáv 825 0.6 825 1,086,382

OTP 4,449 -0.7 4,462 490,679Richter 23,700 -1.9 23,835 14,459Egis 10,115 0.6 10,089 32,504

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Antenna 3,850 -0.3 3,816 21,535TVK 4,515 -1.8 4,542 5,453Rába 640 0 629 6,174

Exchange

In forints, Oct 11, 2004

FIXED MIDDLE RATEEUR 1 245,82USD 1 200,1GBP 1 355,78CAD 1 158,83CHF 1 158,26JPY 100179,9CZK 1 7,84PLN 1 56,82Weather

Tomorrow: sunny

High 10°C (50°F)Low -1°C (30°F)



7days, 2004. október 11

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