The government prepared a document defining its policy of support to small and mid-sized enterprise till 2004. Yesterday, the document was submitted to the Chamber of Deputies for review. If approved, it should help raise the share of SMEs in the country's economic recovery and its export performance. The plan is also aimed at rising the technological level of SMEs and on facilitating business start-up. Easier access to capital, cheaper loans and leasing, subsidized interest payments as well as cost participation in raising the businesses' competitiveness are among the instruments proposed by the cabinet to achieve the goals.
The Senate surprisingly nodded to a new controversial law on radio and television. The law was passed at the proposal of a senator from the Civic Democratic Party, by the votes of 39 of 73 senators present. Senators did not try to modify the law, because they were convinced that the Lower House, dominated by the ODS and the CSSD, both being in favor of the legal norm, would reject their objections anyway. If the law takes effect, it will likely go to the Constitutional Court.
Konsolidacni banka (KoB) will not be able to prepare two large packages of claims for sale by the end of 2001r, as it was planned until recently. The bank will concentrate instead on a transfer of former IPB bank's claims, owned by CSOB now, and on its own transformation into a bail-out agency (CKA). The nominal value of the second package put up for sale will be lower than that of the first package worth CZK 20bn and sold to Goldman Sachs earlier this year. The selected claims may be linked to a certain region. Before, KoB said that it would like to prepare two packages of claims worth a total of CZK 40bn this year.
Czech Finance Ministry is not about to draft a new special low that would regulate residential rent setting after residential rent control will have been abolished by the end of 2001. The ministry argues that in the current political situation the Lower House would not pass any bill addressing rents anyway. A bill on rents submitted to deputies by MoF this April was already rejected. If no law on rent regulation were adopted, rent changes would still be subject to two general norms: to the Civil Code and to the Price Law. Neither of the two concerned parties – home owners and tenants - appears to be happy with the doing-nothing policy of the MoF, primarily because both are afraid of proliferation of court disputes that could drag for years with unpredictable outcomes but predictably high cost.
Danish telecom group TDC (formerly TeleDanmark) is reported to substantially raise its bid for a controlling stake in Ceske radiokomunikace (CRa) to around USD 300m (about CZK 742 per share). CRa shares soared on the news that signaling that dragging privatization of the company would go ahead despite sour sector sentiment abroad. The government will discuss the improved bid likely on Monday and the deal should be completed by June 1, said a source to Reuters. A government source, who also requested to stay anonymous, added that the payment should be made in a foreign currency, in order to prevent the crown from a substantial firming.
The Czech crown jumped early on Thursday on news that TDC raised its bid for CRa, but fell back again in the afternoon as the market absorbed the information. Late on Thursday the crown was at 34.35/38 to the euro, near late Wednesday levels of 34.32/35. CZK/USD weakened to 38.92/94 from 38.83/85 late Wednesday. Dealers believe that anticipation of further FDI inflow will continue to strengthen the crown. But parallel worries of CNB’s reaction if the crown would fall below 34.00 to the euro should help stabilize the currency.
The state 6.95/16 bond dipped 40 basis points from late Wednesday to 103.05/35, yielding 6.61/58 %. The state 6.75/05 was practically flat at 103.64/94, yielding 5.65/56 %.
| late May 17 | bond yield | late May 16 |
| CZK/EUR | 34.35/38 | - | 34.32/35 |
| CZK/USD | 38.92/94 | - | 38.83/85 |
| State 6.75/05 | 103.64/94 | 5.63/54 | 103.65/95 |
| State 6.95/16 | 103.05/35 | 6.61/58 | 103.45/75 |
(Martin Kupka)