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Slovakia, Turkey to cooperate in nuclear energy.
Question: Good morning. Do you happen to have the text of this agreement (in English preferably but Slovak is fine). Just trying to get more colour around what it really means. Thank you.
Answers: Thank you for submitting your question. Please find below the results of our research. Unfortunately the full text of the memorandum was not published neither on the website of the Slovak government nor on the economy ministry’s website. The Slovak ministry only published a brief statement saying that the relevant memorandum between the two countries will be signed by the Slovak President Ivan Gasparovic during his visit to Turkey on Tuesday (Aug 20). We contacted the Slovak energy ministry and asked them to send us the full text of the memorandum if possible and we are waiting for them to reply. We’ll make sure to send it to you as soon as we get it. In the meanwhile here’s a link to the statement published by the ministry which is in Slovak http://www.economy.gov.sk/aktuality-slovensko-sa-snazi-s-tureckom-zintenzivnit-spolupracu-najma-v-energetike/10s141123c Our story from today http://www.intellinews.com/slovakia-1005/slovakia-turkey-to-cooperate-in-nuclear-energy-14077/?back=search&f=http%3A%2F%2Fwww.intellinews.com%2Fsearch%2F%3Fsearch_by%3Dslovakia%2Bturkey%26search_type%3D2 is based on the ministry’s statement which was cited by the main Slovak news agencies. The main point is that the Slovak government wants to support local firms willing to develop energy projects in Turkey hoping it could grab a share of the Turkish energy sector that is undergoing liberalisation. Turkey, which is expected to overtake Britain as Europe’s third biggest power consumer within a decade, is making its first steps in the atomic energy sector – an area in which Slovakia has experience as it generates more than half of its electricity from nuclear power plants. The coverage of Slovak President's Turkey visit in the Turkish media is very limited with nothing on the cooperation deal. The websites of the Turkish government and ministries of energy and economy have nothing on this. Sincerely, IntelliNews team
Show Full AnswerSerbia's 2013 maize crop seen at 5.5 million tonnes, 8% below average
Question: Good morning, I was wondering whether there are similar indications about "below average" harvest for other agricultural products, i.e. wheat. Would you know what are the shares of maize and wheat in the agricultural production/exports in Serbia? Also, how could this influence the central bank inflation projections which are largerly based on an assumption of good agricultural results this year?
Answers: Thank you for your question. Please find below the results of our research. So far there are indications that this year’s wheat harvest in Serbia could even beat the forecast – in contrast with the potential deterioration in the maize crop, which the recent heat wave in the region might cause. (Please note that even at 5.5 million tonnes the maize crop would still be bigger than last year’s 3.6 million tonnes.) In late June the statistics office issued an official forecast for this year’s wheat harvest, saying it would grow 21.8% y/y to 2.33 million metric tonnes (last year the wheat crop shrank nearly 8% because of extensive droughts). The 2013 wheat output will also be 18.5% above the 2003-2012 average. This year’s wheat harvest is expected to increase because of the more land put under wheat (557,596 hectares vs. 480,771 hectares in 2012) and higher expected yield per hectare (4.2 tonnes vs. 4.0 tonnes in 2012). You can check their statement here - http://webrzs.stat.gov.rs/WebSite/repository/documents/00/01/04/66/po13122013e.pdf. In July, local media quoted again the director of grain company Zita Srbije, Vukosav Sakovic, as saying that the results of this year’s wheat harvest are better than expected and according to him the crop will total some 3.0 million tonnes at a yield of at least 5.0 tonnes per hectare. Therefore, he added, with such a solid output, the wheat price is expected to remain low by end-2013. The office is expected to release its official forecasts for the late crops, including data for maize, sunflower, soybean and sugar beet at the end of September. Regarding the shares of maize and wheat in production/exports – the statistics office also gives data for the share of agriculture in exports every month though the more detailed data for different items such as maize and wheat is given only on annual basis. (http://webrzs.stat.gov.rs/WebSite/public/ReportView.aspx - here is the statistical database) In USD terms, the sector of agriculture, forestry and fishery contributed 8.5% of Serbia’s overall exports value in 2012, up from an 8.0% share in 2011. Maize accounts roughly about a half of the sector’s exports (USD 572mn in 2012, or nearly 60% of the sectors exports, vs. USD 456mn in 2011, or nearly 50%) – this is equal to 5% of the country’s overall exports in 2012 and 4% in 2011. The share of wheat is much smaller – of some 10% of the agriculture sector exports’ value. Maize worth USD 94.8mn was sold abroad in 2012 vs. USD 97.6mn in 2011. The share of maize and wheat in the agricultural production – unfortunately the latest available statistics data for their share in the value of the agricultural production dates back from 2009 when maize had a dominant share of 26.5% vs. 6.5% for wheat (for comparison in 2011 maize contributed 25.1% and wheat 7.1% to the agriculture output value). We expect that these percentages have remained roughly unchanged, taking in mind also the stable dynamics of maize and wheat share in agriculture exports. The c-bank inflation forecast – as you note the assumed drop in agriculture and food prices on an annual basis this year is among the main reasons for the central bank’s expectations that inflation would continue to decelerate by the end of 2013 and return within its target tolerance band of 2.5%-5.5% by October - after slowing to 8.6% in July from 9.8% in June. The movements in agriculture prices also hide the main risk for the inflation forecast, the central bank said in its latest Inflation Report published on Aug 14. We believe there are no threats yet regarding the inflation target linked to the latest reports of the ‘below-average’ maize harvest. Moreover, the central bank also says that it has taken into consideration the latest weather conditions but still sticks to its previous projection. It expects that the bigger outputs and exports of maize and wheat compared to 2012 – not only in Serbia but also globally – will lower prices on the international and domestic markets. The drop in primary agriculture products prices would lower the costs of food manufacturing and the central bank expects food prices to be the key disinflationary factor in the coming period. The central bank also notes that the wheat harvest ended in July and first estimates indicate it rose 30% on the year to some 2.5 million tonnes. The maize harvest begins in September and has been in good shape up until the second half of July when the period of high temperatures began. This ongoing period of hot weather and drought could have a negative impact on the maize and industrial crops – but the central bank still believes the likelihood of last year’s low yields repeating this year as well is small considering this year’s better soil qualities thanks to the bigger rainfalls in the winter and spring months. The central bank thus sees this year’s agriculture output rising 14% and contributing to the economic recovery with a positive 1.0pps. In particular, the central bank sees maize harvest rising 62% to 5.7 million tonnes this year (still below the ten-year average of 6.0 million tonnes).
Show Full AnswerRussian Rospotrebnadzor demands Kazakhstan to stop imports of Roshen products.
Question: interesting article- a follow up perhaps on similar incidences and some numbers on Roshen's confectionary imports to KZ etc...and Ukraine's exports to KZ and the Customs Union....
Answers: Thank you for your enquiry. We will definetly follow up on the related topic. In the meantime, we would like to point out that Kazakh sanitary services have not found benzopyrene in confectionery produced by Ukraine's Roshen Corporation. In addition, Moldova and Tajikistan also said that there are no hazardous substances in the products of the Roshen that are imported into their countries. At the same time, Belarus’s Minsk has decided to support its customs union ally Moscow and ban the transit of confectionary by the Ukrainian firm Roshen to Russia. In the meantime, the Ukrainian EconMin has created a workgroup to tackle the situation with restrictions on supplies of the Kyiv-based Roshen Corporation to Russia. Significantly, Roshen may lose up to USD 200mn from the ‘chocolate war’ with Russia according to Oleksandr Sokolov, director of analytics at Pro-Consulting. Some are interpreting the "chocolate war" as payback for Ukraine's decision to impose a special customs duty on cars imported from Russia. Moreover, Ukraine has also decided to back the World Trade Organization (WTO) in a trade dispute with Russia over a recycling tax imposed on used foreign automobiles. In addition, Ukraine is trying to sign FTA with EU already this November, which also ‘bothers’ Russia. Ukrainian First Deputy Prime Minister Serhiy Arbuzov addressed the chocolate ban on July 29 by denying that the countries were engaged in a "trade war," saying officials were looking into the matter and would issue a statement in the coming days. Significantly, this is not the first claim of Rospotrebnadzor to the products, which come from Ukraine. In particular, Rospotrebnadzor earlier imposed a ban on the supply of Ukrainian cheese. After several rounds of talks, cheese supplies resumed. Rospotrebnadzor has been accused numerous times of taking political decisions. Russia banned for several years the importation of wines and mineral waters from Georgia when relations between the two countries were at their lowest. Roshen operates confectionery factories in Kyiv, Vinnytsia, Mariupol and Kremenchuk, the Bershadmoloko dairy producer, a stud farm in Ukraine and also confectionary facilities in Klaipeda, Lithuania and Lipetsk, Russia.
Show Full AnswerBulgaria's fiscal reserve down 1.2% m/m to EUR 2.94bn in June 2013
Question: Could you point us to the current definition of the fiscal reserve? It is defined under the law on public finances that enters into force in 2014 (par. 1 section 41 of the additional provisions) but we did not find a definition under the current budget law. We are interested if there are any differences in the definition and/or composition. Thank you.
Answers: Bulgaria’s finance ministry has informed us that the composition of the government’s fiscal reserve is defined legally in a January 2013 statute on the execution of this year’s budget, which says the following: The fiscal reserve consists of the balances of all bank accounts that are part of the Treasury's single account*. It also includes the central government extrabudgetary funds and those funds of the state enterprises that are serviced by the central bank (the balances of municipalities and their budget spending authorities are excluded). *The accounts of public budget financed entities with the central bank are organized and handled in a single system for collection, keeping, clearing and reporting, referred to as “the Treasury Single Account”. Please follow this link http://www.minfin.bg/document/11960:2 to download a pdf versionof the statute in question. You can find the relevant text on page 19 under article 105. Bulgaria's 2013 Budget Law (promulgated in December 2012) does not include provisions that specify the purpose and composition of the government's fiscal reserve. There is only a provision saying the reserve must be above a BGN 4.5bn (EUR 2.3bn) minimum at the end of fiscal year 2013 (December 31).
Show Full AnswerTurkey’s crude steel production down 1% y/y in April.
Question: Are any of Turkeys export partners particulalry responsible for the decline? Also, can i assume the export nmbers referred to here are tonnes and not exprts by value? Thanks
Answers: In May 2013, Turkey’s crude steel exports fell 5.1% y/y (by value) to USD 1.3bn, while the decline was 3.4% y/y to USD 6.4bn in January-May, according data of the Turkish Exporters’ Assembly (TIM). Unfortunately, our main source TIM does not provide country breakdown data for steel exports. Thus it is difficult to trace which export partner is particularly responsible for the decline. Regards,
Show Full AnswerLebanese bank assets increase 7.4% y/y to USD 155.4bn at end-Q1 2013
Question: Please direct me to the data source for the reference in the first para to "lifted by strong GCC and expat inflows and a mild growth of Syrian inflows."
Answers: The paragraph referred to is our own analysis or assessment. The central bank and the association of Lebanese banks do not provide a detailed breakdown by deposit source in line with the banking secrecy. Inflows from the 8-mn Lebanese diaspora and the GCC states have traditionally been among the key growth engines of bank deposits in Lebanon. Since 1994, the central bank has strived to keep the Lebanese pound stable by indirectly pegging it to the USD at a rate of LBP 1,500 to USD 1. Lebanese banks have and still offer attractive interest rates on deposits to lure private-sector (resident and non-resident) deposits. Syrian inflows have also increased since March 2011 when the uprising erupted. Lebanon’s central bank has introduced precautionary measures to curb illegal inflows of Syrian capital, but Syrian deposits in Lebanese banks have rapidly increased over the past year. Given the bank secrecy, Syrian deposits hover around USD 2bn-USD 3bn, according to unconfirmed industry estimates. Lebanese banks operating in Syria have also downsized their activities in Syria and repatriated a large part of their capital to Lebanon. This is also lifting the banking sector deposits. The most recent example of deposit inflows into Lebanon is the Cyprus syndrome which we recently reported. You can see the story enclosed: Lebanese banks operating in Cyprus repatriated USD 1.2bn worth of deposits back to Lebanon following the central bank of Cyprus’ recent decision to allow foreigners to withdraw their money, Daily Star reported citing bank sources. Nearly 60% of bank deposits held by Lebanese nationals in Cyprus were reportedly withdrawn and Lebanese banks operating in Cyprus will likely close down or downsize their operations. Twelve Lebanese banks operate in Cyprus including Lebanon’s two largest banks, Blom Bank and Byblos Bank. The repatriation of Lebanese capital will also help boost bank assets and deposits. Please find the links to the banking sector balance sheets at end-March. http://www.bdl.gov.lb/edata/elements.asp?Table=q_BDLa_SID4 http://www.abl.org.lb/Library/Files/Files/Economic%20Letter%20March%202013.pdf If you have any further questions, please feel free to contact us.
Show Full AnswerTunisia gets USD 150mn Saudi loan for housing projects
Question: What is the level of Saudi investment in Tunisia? Has there been an increase since the Arab Spring?
Answers: This is a loan and not an official foreign direct investment (FDI) as per the methodology of Tunisia’s Foreign Investment Promotion Agency (FIPA). In 2012, Saudi-sourced FDI totalled a marginal TND 0.4mn (USD 243,500). In 2011, Saudi FDI were just TND 0.1mn. But in 2010, prior to the uprising that toppled the Ben Ali regime, Saudi FDI totaled TND 7.7mn. So yes, we can say that Saudi Arabia’s official investments in Tunisia have sharply dropped after the uprising. However, we should note that Saudi Arabia provides soft loans and grants to finance investment projects in Muslim countries like Tunisia. So such long-term soft loans with grace periods could be interpreted as investments as they create direct and indirect jobs and help the spur private consumption and thus spur economic growth. This is a link to the official FDI site where you can see the breakdown of countries investing in Tunisia at end-2012. http://www.investintunisia.tn/document/628.pdf
Show Full AnswerRomania’s Property Fund sells 1.1% of OMV Petrom for EUR 57mn.
Question: What is the effect on the implied NAV of this sale for Fondul?
Answers: 1. PF calculates and reports NAV on a monthly basis. 2. OMV Petrom is a listed company therefore its contribution to NAV is evaluated at shares' market price. The effect of the 1.11% sale on end-May NAV depends on what will be the price of OMV Petrom shares at the end of this month. If the end-May price is higher than the price paid by PF -- then the effect is negative. If the price is lower -- the effect is, conversely, positive. The effect is evaluated as positive or negative in comparison to the NAV at end-May under the "null" scenario of no OMV Petrom shares sale. Assume one calculates the NAV on a daily basis, then the mechanics of calculating the effect is the same. Namely, since PF sold the shares below the market price [6% below day's closing price], the deal diminished the NAV. By some 6% of the EUR 58mn price. Nonetheless, this is of minor importance. Increased liquidity in hand held by the Fund can be used in generating NAV in other ways on longer [or even shorter] term -- such as by buying back own shares that are traded at a 50% discount. Actually such a buy-back programme is currently carried by the PF.
Show Full AnswerEBRD expects Turkish economy to grow 3.7% y/y in 2013.
Question: How much do you expect the conflict in Syria has impacted the GDP growth?
Answers: We think the impact of the Syrian conflict is profound, and is likely to continue. We believe the EBRD’s growth estimate for 2013 may be in fact optimistic, but agree that 2014 numbers could increase substantially should things stabilize near term in Syria. There is lots of anecdotal evidence of the economic impact to exporters, and housing refugees alone is likely to be a drag on the economy. A protracted stalemate is probably the worst case scenario for Turkey’s growth prospects, particularly in the face of continued uncertainty and low growth in Europe.
Show Full AnswerRomania’s Property Fund picks up brokerages for buyback of own 8.2% shares.
Question: Can you tell us who was the party that did not agree to the share buyback scheme?
Answers: There was no massive resistance to the buy-back programme. The implementation of the programme approved by shareholders on 25 April 2012 was blocked due to the actions of a minority shareholder, Ioana Sfiraiala, who challenged with the Trade Registry the registration of the EGM Resolution no. 4 of 25 April 2012 for the approval of the buy-back programme.However, on 5 March 2013, the Court announced that it has rejected the litigant’s request of intervention and admitted the Fund’s registration request.As informed by the Fund itself: http://www.fondulproprietatea.ro/sites/default/files/current_report_buy-back_programme_6_march_2013.pdf
Show Full AnswerEBRD ups Serbia's 2013 GDP growth forecast to 2.2%
Question: Do you have data on the trends of no performing loans in Serbia?
Answers: The share of non-performing loans in Serbia declined to 18.6% of total gross loans at end-2012 from 19% at end-2011, on the back of falling corporate bad loans. However, the NPL ratio remains high compared to its pre-crisis level of 11.3% at end-2008.The NPL share in the corporate sector shrank by 2.9pps on the year to 19.5% at end-Dec 2012, while household loan arrears were 0.6pps higher at 8.6%.Data on default payments published by the Association of Serbian banks (UBS) also point to an improvement in the share of overdue payments on corporate loans in the first quarter of 2013, as the sector was supported by government-subsidised lending. The pattern will likely continue in the near term as banks are set to approve and extend some 3,000 subsidised housing loans to the corporate sector in 2013.
Show Full AnswerRomania’s Q1 exports up 4.6% y/y, trade gap narrows 54% y/y.
Question: How have consumption patterns looked over this same period...ie are imports down because people aren’t earning enough and therefore not buying imported good?
Answers: trictly speaking of the first quarter of 2013, the annual [1.1%] drop in imports was due to lower import of energy goods [natural gas, crude oil] in part driven by comparatively warmer weather – but also because structural changes in economy where the use of natural gas will decrease as the market liberalisation pushes prices up. Hydropower generation also returned to normal levels this year and the wind power expanded massively thus diminishing the need for gas – but this is again details. Fact is that the natural gas imports [volume] decreased by 24% y/y and the import of crude oil by 20%. In value terms, imports of fuels decreased from EUR 1.5bn [12% of total imports] in Q1/12 to EUR 1.1bn [8.8% of imports] in Q1/13 – and the EUR 400mn decline more than explains the EUR 140mn decline in total imports. Moreover, imports of non-energy goods actually increased by 2.5% y/y in Q. This might be more consistent with the 1.1% rise in retail sales and possibly certain strengthening of consumption. But I would say that this illustrates the weak correlation over longer period of time between the two [consumption and imports]. There are other drivers for imports, stronger than consumption – namely investments and industrial activity [most of which consists in processing imported parts for further exports]. Imports of transportation means [mostly cars] account for more than 30% of total imports and in recent years even the sale of automobiles is to companies [rather than households] meaning that they are actually investment. There is also a strong correlation between export and imports [than between consumption and imports] because of the low value the industry adds to the imported raw materials/parts. A very large part of imports is actually formed by raw materials and parts used by companies in their exports. In broader terms, consumption definitely plays a role in imports’ dynamics. And definitely plays a role in the dynamics of the trade/CA deficit. Weaker financial intermediation in recent years and slow rise in wages have visibly pushed down retail sales in 2009-2010 with a substantial impact on imports and the CA gap narrowing to current 3.8% of GDP [from 11.6% of GDP in 2008].
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