- The Deputies passed a parliament-proposed amendment to the Commercial Code again, this time though without a clause suggested by Ivan Pilip (deputy for the Freedom Union) to lift no mandatory stock buy-out to be offered to minority shareholders in the privatization of companies. The amendment was required by CSSD and backed also by ODS deputies. CSSD assumed that the clause could have incurred great damage to the state in the sale of companies. Premier Milos Zeman put the damage at some CZK 100bn.
Head of the Czech Telecoms Office (CTU), David Stadnik, said that the state lacks will to speed up the privatization of the telecoms sector due to the upcoming sale of 51 % of Cesky Telecom. Stadnik explained that quicker liberalization and a consequent entry of competitors onto the market would bring problems to the dominant carrier. On Wednesday the government asked Transport and Communications Minister to submit the outlines of the amended telecoms law by May 2002. The amendment should regulate the entry of alternative telecom carriers into Cesky Telecom's networks and CTU's powers over carriers.
- Defence Minister Tvrdik is going to ask Aero Vodochody´s board chairman Antonin Jakubse to extend the year-long warranty for the L-159 combat aircraft for the Czech Army and to deduct fine of CZK 309m from the agreed price. Tvrdik said that he would be the first to promote L-159s if problems with them were removed. The army is to pay about CZK 50bn for the planned supply of 72 L-159s that is now largely lagging behind schedule. The contract with Aero Vodochody, signed by a previous government, has been widely criticized as extremely disadvantageous to the state, also because it does not have a clause protecting the army from changes in the dollar's exchange rate.
- The cabinet should discuss the reserve price of the approaching auction of three UMTS licences next week and the Czech Telecoms Office (CTU) will announce the price by November 24. The one-round auction will start on November 30 when domestic mobile operators and other bidders are to submit their bids. The CTU should announce the result of the auction on December 7 and grant the licences to the winners by December 14. The first round of the tender for the licences failed as Czech mobile operators refused to pay CZK 6.7bn per licence – telecom analysts considered that only a third of that amount was realistic in view of the current situation in the market.
- The Czech crown had opened at 33.22 CZK/EUR on Thursday and was slightly weakening in the morning up to 33.28, mainly due to technical factors. In the afternoon, partly owing to no action adopted by CNB Board Members at their regular meeting, the crown gradually re-firmed back to its opening level. Against the dollar, the crown had opened at 37.72 CZK/USD and then oscillated within a narrow band of 37.62-72 most of the day in weak trading. CZK/EUR was trading at 33.23/25 late on Thursday, close to 33.26/29 on Wednesday evening. CZK/USD
closed at 37.71/73 on Thursday, also practically unchanged from Wednesday’s 37.68/70.
- Bond prices dropped on the short end and stagnated at long maturities on Thursday due to negative sentiment prevailing both in Europe and the US in the morning hours. Long maturities did not show losses yesterday owing to an increased appetite of investors at the market segment in the afternoon. The longest state 6.95/16 benchmark gained 5bps on Thursday to 112.55/85, yielding 5.64/61 %. The state 6.75/05 bond lost 35bps compared to Wednesday’s close to 105.05/30, yielding 5.01/93 %.
| Late on November 15 | bond yield | Late on November 14 |
| CZK/EUR | 33.23/25 | - | 33.26/29 |
| CZK/USD | 37.71/73 | - | 37.68/70 |
| State 6.75/05 | 105.05/30 | 5.01/93 | 105.40/65 |
| State 6.95/16 | 112.55/85 | 5.64/61 | 112.50/80 |
(Martin Kupka)