The government yesterday approved a plan for privatizing Transgas and natural-gas distribution companies. The plan consisted of a sell of 97% stake of Transgas packaged together with all or part of the state’s stake in the eight distribution companies.
State budget deficit declined to Kč 11.3bn. October’s budget surplus of Kč 6bn lowered the overall budget deficit. Despite the current level of the deficit is higher then a year ago by Kč 3.9bn. Our expectation about the whole year deficit doesn’t change. We keep forecast of Kč 40bn deficit at the end of 2000.
Exchange rate CZK/EUR almost didn’t change yesterday. As euro strengthened vis-a-vis US dollar up to 0.8579, the exchange rate CZK/USD could break the level of 41 CZK/USD and ended at 40.605. Euro strengthening resulted from worries about weaker US economy growth as recently released economic indicators suggested.
Bond market was steady again on Wednesday. Very few trades have been made, with longest government issues slightly in demand. Market is still waiting for Friday's 7-year bond auction, things are still a bit unsure about the auction. Anyway, we suppose Thursday to be a very quiet day again.
Current benchmark prices: MoF 6.75/05 99.00-30 (unchanged), MoF 6.30/07 94.10-40 (+5 bps), MoF 6.40/10 92.30-60 (+15 bps)
(David Marek and Dalimil Vyškovský)