Weak global telecoms sentiment will not derail the Czech government's plans to sell majority stakes in Ceske Radiokomunikace and Cesky Telecom this year, Finance Minister Pavel Mertlik said on Monday. Mertlik also told Reuters in an interview that the winner of the Ceske Radiokomunikace tender will be free to split the country's number two telecom group into units if it wants once the sale is completed. Mertlik refused to speculate on the price either stake would generate. Some market analysts say the price could be as low as 900 korunas per share due to the downturn in market sentiment, well below the share's CZK 1,024 close on Friday.
Czech state restructuring bank Konsolidacni Banka said on Friday it had a CZK 12.7 billion (USD 335 million) loss last year, from CZK 36.1 billion in 1999. The result is better than the CZK 20 billion ceiling accounted for in the 2001 state budget. But the bank has reported it expects a much higher loss this year, adding to the fast growing load of public debt. The 2000 result is preliminary and excludes losses at several other vehicles owned by Konsolidacni Banka. The Finance Ministry has predicted the bank's consolidated loss of around CZK 24 billion. The bank expects to lose up to CZK 60 billion this year, mainly due to as much as CZK 50 billion in losses from the failure of the country's third largest bank, IPB, last year.
Five Western companies, which are offering their supersonic fighters for sale to the Czech government, learnt details of the tender at a conference at the Defense Ministry yesterday. The consultations were attended by representatives of the defense, foreign and trade and industry ministries. Ministries' officials answered the questions which the companies have sent to them by the end of January, and the questions raised today. All the questions - without stating the name of the authors - and answers will be included in a report, which will be given to all participants in the tender.
The European Union (EU) last week approved the first Czech request for a transition period, which concerns the postponement of construction of oil reservoirs to meet the requirement for an obligatory 90-day reserve until the end of 2005. Even though this is not a fundamental breakthrough, it shows that the Czech-EU entry talks have entered another, more significant phase.
If the EU is accepting transition periods, it means that key issues have started to be solved. On the one side, the Czech Republic is withdrawing some requests for transition periods, and on the other hand, the EU is starting to accept the first Czech demands.
The Czech koruna traded in a narrow range on Monday as a lack of news and a calm euro/dollar kept activity thin. Late on Monday the koruna was flat at the morning's level of 34.58/63 to the euro, but up from late Friday's level of 34.60/64. The koruna/dollar fell to 37.97/99 from the morning's 37.84/87 and from 37.93/95 late Friday.
The state 6.75/05 bond fell five basis points from late Friday at 103.65/95, yielding 5.69.61 percent. The state 6.40/10 up 55 basis points at 100.20/50, yielding 6.36/32 percent.
(David Marek)