INTERNAL AFFAIRS 24.02.2004 - PM alternatives: Kiss, Gyurcsány, Hiller - Jacques Chirac in Budapest 25.02.

2004 - Dead animals hidden in hipermarkets? 26.02.2004 - Protect yourself or close your shop! 27.02.2004 - Agreement with farmers – Artificial milk polished off - Companies are also affected by the Draskovics package - Fidesz increasing its lead FOREIGN AFFAIRS 23.02.2004 - Freedom for the support of services 25.02.2004 - Limitations through and through 27.02.2004 - American country report on democracy MACROECONOMY 23.02.2004 - GKM thinking about a tax reform - Less forced entrepreneurs? 24.02.2004 - Central bank modifying its inflation forecast - French-Hungarian trade increased significantly 25.02.2004 - Forint strong only temporarily 27.02.2004 - Better market outlook - Increasing unemployment BANK 23.02.2004 - More expensive loan rates 24.02.2004 - Subsidised home loans getting more expensive 25.02.2004 - Volksbank fund registered 26.02.2004 - High-reaching plans at Raiffeisen Bank - Interest rate changes in January 27.02.2004 - Leasing market increasing by 20 percent - HVB finances M5 acquisition INSURANCE 26.02.2004 - Expanding membership at Medicover HEAVY INDUSTRY 23.02.2004 - Decreasing NABI papers - Linamar’s share capital increase registered - Volvo acquired Bilia 26.02.2004 - Haldex manufacturing plant in Szentlõrincháza - Hungarian Audi „did step on the gas” - Dunaferr’s privatisation contract is signed ENERGY INDUSTRY 23.02.2004 - Poland rethinks Mol-PKN merger 24.02.2004 - GE organised a supplier conference BUILDING INDUSTRY 23.02.2004 - Slight improvement in construction industry’s output ELECTRONICS 25.02.2004 - Merloni to change its name to Indesit 26.02.2004 - Lexmark to expand its "green" programme TELECOMMUNICATION 26.02.2004 - Iberian investors in the running for Antenna 27.02.2004 - Westel: card fill-up increased INFORMATION TECHNOLOGY 24.02.2004 - Fujitsu Siemens delivered better numbers 26.02.2004 - Elender sold FOOD INDUSTRY 27.02.2004 - Alcohol free beers are not selling


TRADE, FAIRS 23.02.2004 - Small shops are unbeatable 24.02.2004 - Wal-Mart intends to acquire Spar - Fine for Media Markt 25.02.2004 - Registration tax to modify? – Dealers voicing their anger 27.02.2004 - Subway is looking for suppliers - According to MGE customers come off badly with the „new” registration tax TRAFFIC, TRANSPORT 23.02.2004 - Agreement between Wizz Air and Budapest Airport - Debrecen Airport to go international 25.02.2004 - AIG invests in Waberer's INVESTMENT, DEVELOPMENT 23.02.2004 - Increase in prices is expected in the real estate market 24.02.2004 - Returning real estate business in Eastern Europe 27.02.2004 - New production installed at Hydro Alumínium Kft. TAX, SOCIAL INSURANCE 23.02.2004 - VAT rules will change in May SECURITIES’ MARKETS 24.02.2004 - Rather household sector buying government securities at the end of the year WORLD ECONOMY 23.02.2004 - Leading in political stability MEDIA 24.02.2004 - World economy magazine from BBC 25.02.2004 - RTL Klub delivered good numbers in January - Tv2’s income from advertisements increased by a sixth


INTERNAL AFFAIRS - 24.02.2004 PM alternatives: Kiss, Gyurcsány, Hiller
Socialists are already uncertain about with whom to start the next parliamentary election campaign. Since inside the party many turned away from Péter Medgyessy, and it is said that a scenario exists, according to which the Prime Minister would give over his place to an MSZP (Hungarian Socialist Party) politician before the end of the term already. According to the information of Magyar Hírlap, three alternatives exist: Péter Kiss, who has significant experiences in managing the apparatus but is a least characteristic figure, Ferenc Gyurcsány, who is also an experienced leader but his antecedents could mean a disadvantage and István Hiller. The latter is supported by the fact that he would be accepted by SZDSZ (Alliance of Free Democrats) more easily but he is not that known and his appearance could be improved as well. (MH p1, 4)

Jacques Chirac in Budapest
From 1 May, when Hungary becomes member of the European Union, the two countries will go hand in hand and build the European future – French president Jacques Chirac said after having talks with Hungarian counterpart Ferenc Mádl. Chirac highlighted that France was having the closest contact with Hungary out of the Central European region. During the talks, working out a separate European military force was considered and there was mention of setting up a future French-language university in Hungary. As for the recently made proposal of Prime Minister Péter Medgyessy for setting up a joint list by Hungarian parliamentary parties for forthcoming European Parliament elections, Chirac stated that there was some coherence in different European countries’ EP election processes and added that it was important that Hungary strengthened that. Ferenc Mádl said that Hungary would continuously count on France’s taking part in Hungarian infrastructure investments, for example in the modernisation of No 2. tube line and construction of No 4. Referring to last week’s British-FrenchGerman summit, Chirac underlined that it was not meant to create a two-speed Europe, but, on the contrary, they were coming up with suggestions on the future of the European Union and it was out of the question that anything should be prescribed for any countries. French newspaper Le Monde, in relation to the French president’s visit to Hungary, wrote that this had been Chirac’s one and only official foreign visit in the first half of the year. The daily added that an honour to a very good European Union student could be felt in the gesture. Information had it that after December’s European Union summit, Chirac asked Medgyessy whether Hungary would be a partner in forming a Union elite group. The Hungarian answer was that the country was supporting a strong Europe of 25 member states, but should there be such a need for a group like this, Hungary would gladly be part of it. (Nszab, p 1 and 3, NSZ, p 1 and 2, MH, p 1 and 6)

INTERNAL AFFAIRS - 25.02.2004 Dead animals hidden in hipermarkets?
Although the Ministry of Agriculture and Rural Development would increase the European accession credit line by HUF 60 billion and would bring forward the payment of grants to the tune of HUF 46 billion, the proposal has been turned down on the consultation of ministry representatives and a group of demonstrating agricultural producers. Farmers were not even persuaded by the Ministry’s proposal to increase the purchase price of milk by HUF 2 per litre, together with grants of billions of forints promised to those breeding pig. Daily Magyar Hírlap has learnt form the „barricades” that failure was taken for granted, since National Federation of Agricultural Co-operatives and Producers (Mezõgazdasági Szövetkezõk és Termelõk Országos Szövetsége (MOSZ)), together with the SelfProtective Movement of Hungarian Farmers and Consumers (Magyar Gazdák és Fogyasztók Önvédelmi Mozgalma) announced that they would have a demonstration in front of Parliament. (The former organisation has in the meantime modified the venue of the Thursday demonstration and relocated it to Vértanúk Square). Information has it that some farmers are putting dead animals, rats, frogs and fish to the freezers of hipermarkets and put a hole to the package of some drinks they do not like (e.g. so-called morning drink), to make large hipermakret chains buy Hungarian products. In South Hungarian Solt, a large quantity of morning drinks, considered to be „fake” by the demonstrators, has been damaged, however, no criminal proceedings have taken place, since the damage was under the HUF 10,000 barrier. (Shops should be locked right when a dead animal is detected.) Gyõzõ Zsikla, Chairman of the Self-Protective Movement of Hungarian Farmers and Consumers does not agree to these cruel methods, however, he said that the anger of framers was understandable. The Former Independent Smallholder Party Member of Parliament is planning to found a so-called Market Guard of 100 farmers that would organise and carry out actions like pouring artificial milk and distributing leaflets in line with regulations, without causing havoc. (MH, p 1 and 11, NSZ, p 8)


INTERNAL AFFAIRS - 26.02.2004 Protect yourself or close your shop!
As of 2005 the Ministry of Interior would force state, municipality and private companies by and act to introduce security measures proportional to their unsafeness - learned Népszabadság. By means of this enterprises that do not have a security system prescribed for their level of unsafeness could not receive the permission to operate. (Nszab p1, 5)

INTERNAL AFFAIRS - 27.02.2004 Agreement with farmers – Artificial milk polished off
The agreement that arose between farmers and the Ministry of Agriculture Wednesday night is expected to make peace in agriculture until May. Demonstrators qualified the agricultural agreement acceptable, but woodrangers of Szabolcs County will continue their traffic slowing action. Winegrowers can be satisfied as well, since the VAT of fruit wine will be increased. Processors do not make a statement yet, since they cannot know the details of the agreement, their representatives were not invited to the negotiation that lasted until night. At the discussion held in MARD four retail companies - Spar, Metro, Auchan and CBA – decided to terminate the sale of so-called morning drinks, in other words, milk imitations. According to the Economic Competition Office the outlisting of artificial milks is cartel suspicious, even if it is organised aegis of a state organisation. But it is not consider automatically a cartel, if four companies stop distributing a product group at the same time. Morning drinks are made of whey left behind from the prodution of other milk products and additives, thus they are significantly cheaper than milk. (Nszab. p1, 11, MH p1, 11, NG p3)

Companies are also affected by the Draskovics package
This year the amendment of the VAT act, according to which they cannot account for half of their telephone costs as of May, will take away nearly HUF 12 billion from companies. Last year the budget won HUF 20 billion by the fact that enterprises could not write down 30 percent of telephone costs. The severity is part of the government’s restrictive measures. Details of the altogether HUF 185 billion Draskovics package were announced Wednesday night. Portfolios published on the homepage of the Ministry of Finance one by one how they will implement the programme. Népszabadság and Magyar Hírlap introduce in a table and a compilation how cost cutting affects ministries and state organisations. Magyar Hírlap also provides a picture about ceasing public foundations. (Nszab. p1, 5, MH p1-3, 10)

Fidesz increasing its lead
Opinion research institute Szonda Ipsos’ latest study reveals that before the state of the nation address from the two leading Hungarian party leaders, opposition Fidesz Hungarian Civic Alliance had a 10 percent advantage in terms of all interviewed and a 16 percentage point one when it comes to those with a party preference ahead of senior governing Hungarian Socialist Party MSZP. The last months did not see a significant decline in the number of those wishing to vote for the socialists, however, their support base seems to have lost its determination. At the same time, Fidesz has increased its support base to a large extent. Respective percentage points of supporters stand at 36 for socialists and 52 for Fidesz (those with a party preference) and 24 and 34 percent (those eligible to vote). The situation of smaller parties is practically unchanged, only junior governing party Alliance of Free Democrats SZDSZ could reach the 5 percent threshold necessary to make it to the Parliament. (Nszab, p 1 and 5)

FOREIGN AFFAIRS, EUROPEAN UNION - 23.02.2004 Freedom for the support of services
Under a suggestion coming from the European Union, members states can freely grant money for local services of significant and public importance, meaning that it will not be regarded as not honouring competition rules. Included in this group are water and sewage services, local public transport, energy supply of hospitals, schools and other public services, which all can be given state subsidies to a given limit. The proposal is waiting for the approval of member states and that of the European Union. (Nszab, 21 Feb, p 15)


FOREIGN AFFAIRS, EUROPEAN UNION - 25.02.2004 Limitations through and through
President of the European Commission, Romano Prodi, is worried about the panic reaction, by which nearly all current EU member states raised barriers against the employment of accessing Eastern European states’ citizens. Restrictions were announced in London on Monday (Today Morning, February 24th) and the Austrian government decided yesterday. By means of the decision in Austria the citizens of the eight new Eastern European member states can undertake work without limitation as of 2011 only. Malta and Cyprus will receive exceptional treatment: their citizens can work in Austria immediately after the accession. (MH p8)

FOREIGN AFFAIRS - 27.02.2004 American country report on democracy
The U.S. State Department's annual report on human rights was quite critical on Russia. The study writes that Kremlin is manipulating elections, restricting the freedom of press and is trying to abolish opposition. As for Hungary, the authors are generally satisfied with the observation of human rights in the country. However, they did mention that the Romany population still continued to be the target of social discrimination and also that - according to the opposition – the government was intervening into the operation of the public media. They quote that the Jewish community is worrying on the back of anti-Semitism developments. The report writes about Hungarian Radio’s program entitled Vasárnapi Újság (Sunday Gazette) and that of National Television Éjjeli Menedék (Night Shelter), already taken out of the program. US Human Rights Network has condemned the study, stating that the United States has lost its moral base to be critical, since it has kept people in prison without charging them and with no process initiated against. (Nszab, p 3, MH, p 9)

MACROECONOMY - 23.02.2004 GKM thinking about a tax reform
Minister of Economy and Transport István Csillag said on Friday in a speech evaluating the ministry's performance in 2003 that he proposed changing local business tax and said that the Ministry was thinking on the advantages of introducing the linear tax. Csillag added that the local business tax should be modified in such a way that local councils do not lose revenue but so that companies contribute to the development of communities. This local tax gives around 10 percent of settlements’ total funds, translating into HUF 250-260 billion. General secretary of the National Federation of Local Authorities TÖOSZ Gábor Zongor is of the opinion that there would be a need to reconsider the whole system of local government financing. (NSZ, 21 Feb, p 1 and 5, Nszab, 21 Feb, p 16, MH, 21-22 Feb, p 11, MN, 21 Feb, p 11, VG, 23 Feb, p 6, NG, 23 Feb, p 3)

MACROECONOMY, LABOUR - 23.02.2004 Less forced entrepreneurs?
It seems that artists, sportsmen, workers of guarding services and journalists will be exempted from the obligation to be forced entrepreneurs – the Labour Minister told daily Világgazdaság. Sándor Burány added that those working in these territories could not be regarded forced entrepreneurs. He stated that necessary regulations would be in place within months. The IT system to summarise the employment data of employees would start form May, however, it would not be accompanied by a physical document like the so-called working card was meant to be. (VG, p 1 and 7)


MACROECONOMY - 24.02.2004 Central bank modifying its inflation forecast
The Monetary Council of the National Bank of Hungary has not modified the base interest rate of 12.5 percent, however, it has significantly upped its inflation forecast. The new report forecasts twelvemonth inflation for December 2004 at 6.9 percent, sharply up from the 5.9 percent rate the bank projected last November. The 2005-end forecast is up from 4.0 percent in the previous report issued in November to 4.3 percent, but in case of unfavourable conditions, it can go up even to 4.8 percent. The bank raised its 2004 annual inflation forecast to 7.4 percent for this year, whilst for 2005 the annual average is projected at 4.7 percent. The report highlights that accelerating labour costs, weaker forint rate and larger than expected increase in consumption have led to the increase if this year’s forecasts. The central bank’s decision making body stressed that the 4 percent inflation goal for next year can be met through strict monetary policy and continuing fiscal consolidation, together with lowering inflation expectations. To meet inflation goals, the central bank would not hesitate to increase interest rates again. Analysts are of the opinion that now expectations for increasing interest rates would be stronger and this measure should be considered in the near future. Observers point to the fact that the National Bank of Hungary was afraid of strengthening inflation expectations and also that the market would not treat price hikes of early 2004 as a one-off effect, but rather it includes it in prices, thus making them having an impact for the whole year. The Monetary Council sees it as a positive sign that the government is doing its best to push down general government deficit to 4.6 percent – the central bank adds. The interbank market reacted positively to the report with the HUF/EUR rate falling under 260 late in the afternoon, translating into a weakening of HUF 2 compared to Friday. However, the government securities market has seen unfavourable processes with market players starting selling bonds with several-year maturity, leading to increasing yields. It can be put down to the fact that investors were of the opinion that the central bank was not planning to cut interest rates in the near future, thus they would be better off buying short-term securities with larger yield. (NG, p 1, 3 and 14, VG, p 1 and 5)

French-Hungarian trade increased significantly
In the past 10 years Hungarian-French foreign trade increased to sixfold, thus France is the fourth most significant foreign trade partner of Hungary. The majority of bilateral turnover is provided by machines and equipment on both sides. In the ranking of foreign investors the French are at the third place together with Austrians; based on the data of MNB (National Bank of Hungary) before last year they had a 10 percent share in foreign investments amounting to 28.3 billion euros. The largest growth was achieved by hypermarket chains: in 2002 5 new units were opened with an investment of 250 million euros. (NG p4)

MACROECONOMY - 25.02.2004 Forint strong only temporarily
Financial analysts are of the opinion that the strengthening process of Hungarian forint going on for some days is rather of a temporary and technical nature, since there is no single macroeconomic data that could have caused it. The National Bank of Hungary report has just fuelled the process, since the central bank would like to have a strong forint and is doing its best to avert high inflation, thus it is not going to decrease interest rates. The EUR was trading at a rate of HUF/EUR of under 258 yesterday afternoon. According to calculations, it can go further down to even 257.50, whilst others say that the rate can be around 250. Since fundamentals do not support such a strong exchange rate, forint is expected to get weaker later on. What makes the forint rate even more unpredictable is the uncertainty surrounding other currencies of the region, namely that of Polish zloty and Slovakian crown. (NG, p 3, VG, p 1 and 13)


MACROECONOMY - 27.02.2004 Better market outlook
According to a February Reuters poll, expectations on current account deficit have significantly declined, whilst the projected industrial production figure went somewhat up and fears of an interest rate disappeared. Analysts forecast a EUR 4.51 billion deficit in current account a month ago, whilst the corresponding figure for this year now stand at EUR 4.2 billion with the consensus for 2004 showing a deficit expectation of EUR 3.85 billion. When it comes for general government deficit, however, the figure – in spite of cost cutting measures finalised on Wednesday – will be above the already upgraded 4.6 percent GDP-proportionate deficit target with analysts projecting a consensus of HUF 985 billion, which compares to a HUF 920 billion a month earlier. As for inflation, expectations are up by 15 base points at 6.2 percent with the annual average inflation rate coming to 7.1 percent, compared to the government’s projection of 6.0-6.5 percent. The forint rate is going to be as strong as it has recently been against the euro, Hungarian analysts say, whilst Western European market experts have a different opinion with several of them forecasting a HUF/EUR rate of 280 or even more. (NG, p 3, VG, p 4)

MACROECONOMY, LABOUR - 27.02.2004 Increasing unemployment
The rate of unemployment in the period between November last year and January this year was 5.8 percent on the average. This figure id 0.2 percentage point higher than the rate of the period between August and October, but it is 0.2 percentage points lower than last year’s figure for the same period – announced Központi Statisztikai Hivatal –KSH (Central Statistics Office). The number of employed people was 3918 million an the average, which means the number of employees is 38 thousand more than last year. (NG p3, VG p4)

BANK - 23.02.2004 More expensive loan rates
After larger rates of home loans from December, rates of personal loans are also on the rise. In case of overdrafts, rate hikes can reach 4-5 percent: National Savings Bank OTP increased its rates by 4 percent, whilst CIB by 3, Raiffeisen by 2, IEB by 2-3 percent, whilst Commercial and Credit Bank K&H Bank has not modified its conditions. At OTP Bank, HUF 91 billion out of the HUF 128 billion of consumption loans were overdraft loans. In a related development, OTP is modifying its deposit rates, too: in case of deposits above HUF 2.5 million, interest rates for 2 months will be 10.5 percent, whilst for three months 10.25 percent. (Nszab, 21 Feb, p 15)

BANK - 24.02.2004 Subsidised home loans getting more expensive
Several banks will increase the interest rates of their subsidised home loans as of 1 March. The increase will reach 1-1.5 percent on average and credit institutions put them down to increasing prices of mortgage note funds and also to the method of interest rate subsidy settlement. (The yield rise of early this year will be included in prices of subsidised home loans with a several month delay.) The largest increase will be in the case of one-year rates with hike amounting to more than 1 percent with both new and resale homes at Land Mortgage and Credit Bank FHB. Market leader National Savings Bank OTP is of the opinion that they were not preparing for modifications, meaning that subsidised loans will be granted with variable interest rates of 6 and 8 percent, respectively. However, HVB Bank is going to increase its rates and an announcement is expected within days on the extent of the hike. HVB has announced a technical modification, too: in case of home loans given as a lump sum, overbridging credit would be introduced, that is, they would be calculating a 9.99 percent interest rate for loans granted with subsidised mortgages before it is handed over to HVB Mortgage Bank. (Earlier, the applicant could have the loan with the subsidised interest rate.)In case of a five-year loan, FHB is increasing its rates only for new homes from 6 percent to an annual rate of 6.5 percent, whilst the rate for the HUF 5 million loan for resale homes will cost an unmodified 7.5 percent. Experts are of the opinion that a change in the interest rate trend could be envisaged not earlier than late spring or early summer, should the forint rate be better. Earlier, there is no chance for a cheaper loan. In the long run, however, the outlook is better: FHB, for example, albeit to a minimal extent, will decrease its 10-year interest rates, signalling that the interest rate trend is going down in the longer run. (MH, p 9)


BANK - 25.02.2004 Volksbank fund registered
PSZÁF (State Supervisory of Financial Institutions) registered Volksbank Euró Kötvény Alapok Alapja (Fund of Volksbank Euro Bond Funds) with a start-up capital of one million euros. The papers of the euro based fund will be sold in the branch banks of Hungarian Volksbank, but the fund management will be carried out by Budapest Alapkezelõ Rt. (Budapest Funds Manager Co.). The new fund invests money in investment funds investing in international bonds, within this mainly in papers of Volksbank KAG Interbond’s fund.. (VG p13, NG p12)

BANK - 26.02.2004 High-reaching plans at Raiffeisen Bank
Raiffeisen Bank Rt. would like to increase its net profit significantly, by 18 percent, to 15.5 billion forints this year. The financial institution will launch its 3 year programme including the establishment of 70 new subsidiary banks this year. In the first phase of the programme 20 branch banks will be implemented, the cost of investment will add up to approximately 2 billion forints – said Péter Felcsuti leader of the bank, which institution achieved the third place in the ranking of Hungarian banks based on the cost efficiency data arising from Nemzetközi Bankárképzõ (International Trading Center for Bankers). Owing to the development, the aggregated value of which added up to 7.7 billion forints the number of Raiffeisen subsidiary banks will increase to 120. The company intends to improve the amount of loans outstanding by 20 percent, the sum total of deposits by 23 percent and the balancesheet total by 21 percent the present year. If the planned figures will be achieved, the balance sheet footing could exceed the amount one thousand billion forints by the end of the year. Relating to the financial institution’s dividends policy the general manager of the bank said: the owner of the bank will receive an amount from the profit that ensures that the liquidity index of the bank will not drop under 9 percent, which is included in the agreement concluded with PSZÁF (State Supervision of Financial Institutions). The bank will sustain the index between 9 and 10 percent. (NG p4, MH p11)

Interest rate changes in January
Difference between the average interests of consumer credits and short term deposits (shorter than one year) in the household sector decreased from the 12.3 percentage points of December to 11.64 percent – turned out from the January interest rate report of the Bank of Issue. In case of the nonmonetary companies the margin decreased from 2.42 to 2.37 percentage points. In the month under review the interest rate of the households’ credits in current accounts decreased by 25 base points to 18.8 percent, while the interest rate of home purpose loans eased by 107 base points to 11.21 percent. According to MNB (National Bank of Hungary) data the interest of consumer credits diminished by 34 base points to 22.04 percent, the average credit-cost-index decreased from 28.6 to 27.75 percent. Interest of other loans increased from 14.83 percent to 15.94 percent. The portfolio of consumer credits drifted downward from HUF 22 billion to 11.5 billion forints, the value of home purpose loans eased off by 25 percent to 47.7 billion forints. The interest rate of deposits at demand increased by 9 base points to 2.29 percent. The interest rate of short term deposits (shorter than one year) in case of an exercise date within one year increased by 32 base points to 10.4 percent, after one year (maximum deposit period two years) increased by 65 base points to 10.35 percent, after two years increased by 96 base points to 7.84 percent. The rate of interest rate os corporate current account credits changed from 13.01 percent to 13.15 percent, the money rate of other loans increased by 19 base points to 13.57 percent. The average interest in case of deposits shorter than one year changed from 10.96 percent to 11.16 percent, after one year from 10.8 to 11.37 percent. (VG p14, MH, p12, NG p4)


BANK - 27.02.2004 Leasing market increasing by 20 percent
The 40 member companies of the Hungarian Leasing Association (Magyar Lízingszövetség) extended loans worth a total of HUF 966.4 billion in 2003, up from HUF 813 billion a year earlier, translating into a 19 percent increase. (These figures do not contain results of the Merkantil group.) The share of credits extended for vehicle purchases was significant at above 71 percent. It is possible that the amount of expected outlays would reach HUF 1,000 billion this year, although the uncertainty surrounding the registration tax makes it quite difficult to come up with exact projections. The last year saw the increase of leasing contracts of small amount for used cars. At the same time, self-financing went down in value, thus increasing risks. A further problem is in the fact that the percentage of nonpaying clients is on the increase, forcing companies to save significant provisions, whilst harsh interest rate competition and large commissions paid out to brand managers can make several companies operate at a loss. Taking a closer look at market shares, it can be stated that positions of leasing companies with a banking background are quite stable with CIB Leasing holding onto its first position with a 18 percent share of the market. (NG, p 5, VG, p 19)

HVB finances M5 acquisition
Concerning the tenders submitted by the major Hungarian banks aiming the financing the acquisition of the motor road M5, HVG Bank’s offer was the most favourable – learned Magyar Hírlap (Hungarian Journal). The paper understands that the financial institution would provide a loan for the Hungarian government aiming the acquisition of 40 percent of the AKA package at an interest rate of Eulibor+0.12 percent (in case of financing at group level +14 percentage points). The cost of the acquisition adds up to 21 billion forints. There is a loan guarantee from MFB (Hungarian Bank for Development) of 60 billion forints to secure the deal. The acquisition of the ownership interest will expectably take place next Friday. (MH, p12)

INSURANCE - 26.02.2004 Expanding membership at Medicover
Swedish interested Medicover Egészségpénztár (Medicover Health Fund) has been doubled its membership in two months. 40 percent of the 1200 clients are live outside Budapest. The average value of the monthly payments is between 6 and 8 thousand forints, but almost the whole amount has been spent, mostly on buying medicaments. (VG p14)

HEAVY INDUSTRY - 23.02.2004 Decreasing NABI papers
NABI’s course is heading to it’s bottom ever in its history at BÉT (Budapest Stock Exchange), its price fell even under 1100 forints last week. This softening arises from last year’s mismanagement, which resulted in a deficit of 16 million dollars. The company has a significant portfolio of orders until 2006, but analysts still expect deficit for this year. However they do not expect NABI become bankrupt and think that the company will manage to arrive at an agreement with the creditors about restructuring of its short-term credit of 34 million dollars. (VG p14)

Linamar’s share capital increase registered
The court has registered Linamar Rt’s share capital increase with effect as from February 19. Due to this transaction the company’s share capital increased from HUF 801.6 million to 858 million forints. The company will apply the shares issued by this transaction for its option programme. (NG p7)

Volvo acquired Bilia
Bilia Építõgép-kereskedelmi Kft. (Bilia Construction-machines Trading Ltd.) continues its operation under the name Volvo Építõgépek Hungária Kft. (Volvo Construction-machines Hungary Ltd.) after Volvo AB acquired Intropa , the Austrian owner of the company. Due to the expected recovery of motor road investments, and other major investment projects by the government the company counts on an increase of its sales revenue. The rest of the market players for example Terra Hungária Kft. and Kuhn Kft. are optimistic as well. (VG p8)


HEAVY INDUSTRY - 26.02.2004 Haldex manufacturing plant in Szentlõrincháza
The production in the assembling works of the Swedish Haldex company located in Szentlõrincháza will expectably start in June - learned Világgazdaság (World Economy journal). The 5 million euros (1.3 billion forints) worth investment creates 110 new jobs. The manufacturing plant producing hydraulic breaks and other equipments will export its products. This investment is part of the Gripen compensation deal. (VG p9)

Hungarian Audi „did step on the gas”
The production and financial indexes of the Hungarian Audi subsidiary exceeded the Ingolstadt based parent company’s figures again. Compared to 2002 Audi Hungária Rt. increased its sales revenue by 4.8 percent to 3.722 billion euros last year, and the balance sheet made according to the Hungarian accounting standards shows a profit of 314 million euros. This figure exceeds previous year’s profit of 280 million euros by more than 10 percent. On the contrary Audi AG increased its sales revenue by 3.6 percent to 23.4 billion euros, while the company’s net profit increased by 5.4 percent to 816 million euros. Hungarian Audi seated in Gyõr manufactured 1.335 million engines last year, which is 55 thousand more than a year before. These had been mounted into Audi, VW, Skoda and Seat models at automotive factories in abroad. As a result of this Hungarian Audi was the biggest Hungarian exporter last year. At the same time, owing to a reorganisation and the preparation of change in products there were less vehicles assembled than before. There were 32 337 Audi TT and 1616 A3 vehicles assembled in the manufacturing plant. There is still no decision made about the A3 that is produces exclusively in Gyõr, and the location or the manufacturing is not decided yet either, but Jürgen Lunemann acting chairman of the Hungarian company emphasized: Audi AG invested 234 million euros last year, and the aggregated sum invested in the development of the production in Gyõr adds up to 1.75 billion euros. Additional investments can also be expected, whereas the parent company intends to establish a tool manufacturing plant in Central-Europe, and Gyõr has good chances to win at the tender. (MH p10, NG p5, VG p9)

Dunaferr’s privatisation contract is signed
Representatives of ÁPV Rt. (State Privatisation and Holding Co.) and the Ukrainian-Swiss DonbassDuferco consortium signed the privatisation contract of Dunaferr Rt. Donbass-Duferco consortium paid HUF 444 million for Dunaferr Rt.’s 79.48 percent state owned share package and parallel to this it raises the registered capital of the Dunaújváros based company by HUF 17.3 billion. But according to the information of Magyar Hírlap the agreement between the new owner and crediting banks about the takeover of the steel work’s HUF 60 billion debt is delayed, because financial institutes are not willing to restructure loans according to the terms offered by Donbass and this can endanger the privatisation as well. (MH p1, 11, NG p4)

ENERGY INDUSTRY - 23.02.2004 Poland rethinks Mol-PKN merger
Poland is reassessing plans to merge oil firm PKN Orlen with Hungary's Mol amid signs of interest in the Polish group from other players, Treasury Minister Zbigniew Kaniewski said. He added that Mol was still in play, but there were others also interested in forming a partnership with PKN. The Polish government is set to decide next month on whether to support the planned merger with the Hungarian oil and gas company. (NSZ, 21 Feb, p 5)

ENERGY INDUSTRY - 24.02.2004 GE organised a supplier conference
At the professional day organised by GE Hungary Rt.’s Energy business line for the first time the company introduced its plant in Veresegyház manufacturing gas turbine components and Hungary, as a successful investment field for GE’s six business lines to 18 countries’ 55 suppliers. GE Hungary, which produced revenues of HUF 296 billion before last year is considered the largest foreign employer in Hungary with its 14 thousand employees. The Hungarian GE established key supplier relationships with 2000 Hungarian companies and it purchases 50 percent of goods and services necessary for Hungarian production from our country. (NG p5)


BUILDING INDUSTRY - 23.02.2004 Slight improvement in construction industry’s output
Compared the year before the production in construction industry increased by 0.7 percent to 1505 billion forints at current price last year - informed KSH (Central Statistics Office). The production in December, adjusted with working days, increased by 4.5 percent and without correction improved by 6 percent. Seasonally and adjusted with the working days factor the index increased by 1.2 percent on monthly level. The production of enterprises employing at least 300 workers decreased by 5.2 percent, while the production of companies employing 5 or less people increased by 16.2 percent. (NSZ Feb. 21, p5, MH Feb. 21-22, p9, MN Feb. 21, p11, VG Feb. 23, p6)

ELECTRONICS - 25.02.2004 Merloni to change its name to Indesit
Household appliances maker Merloni Elettrodomestici S.p.a. is going to change its name and will use the name of Indesit, well-known in several countries of Europe, from 2005. Merloni was founded back in 1975 and bears the name of the founder. Its flagship brand is Indesit, that is why they have decided to have this name in the future, although in the premium category it boasts brands like Ariston, French Scholtes, British Hotpoint and Russian Stino, too. Merloni is still having expansion plans in Central and Eastern European markets and plans call for a total of EUR 100 million spent on investments in the region. The reasoning says that the increase in purchasing power experienced in Eastern Europe is offsetting the decline of Western markets. To make use of opportunities in Hungary, the company has constructed a logistic platform and a telephone-based client centre, with the latter one dealing with Czech, Slovakian and Romanian customers at present. A warehouse of 30,000 square meters will also be built in an investment of EUR 6 million, expected to be ready for operation in 2005. The company has factories in Poland and Russia in the region and the number of its manufacturing plants stand at 17 in Europe. The Hungarian subsidiary of Merloni has increased the number of appliances sold in 2003 by 66 percent with its sales revenue going up by 73 percent. (NG, p 4, VG, p 11)

ELECTRONICS - 26.02.2004 Lexmark to expand its "green" programme
Lexmark widens its „green” programme aiming the ease of handling print cartridges. The print cartridges are harmful wastes: in the future, the company will place also the packaging material required to send back cartridges to the firm in the box of the product. Ceemark Hungary Kft. distributing the brand in Hungary increased its sales revenue arising from Lexmark products by 45 percent to one billion forints. (VG p9)

TELECOMMUNICATION - 26.02.2004 Iberian investors in the running for Antenna
The government is expected to make a decision on the privatisation of broadcaster Antenna Hungária’s 74 percent state-held stake in March. One version calls for the selling of a 50 percent plus one vote package to a professional investor with the remaining part sold on the stock exchange, whilst the second scenario calls for one investor buying the whole package in one. Economic daily Világgazdaság has learnt that those interested include Portugal Telecom and Catalan Retevision. The Finance Ministry is expecting proceeds to the tune of HUF 20-25 billion for the transaction. The future owner will have to make a binding offer for the public shares, the price of which would be calculated based on the last 180 days average stock exchange rate, weighed with the turnover. Currently it stands at around HUF 2,280. (VG, p 13, NG; p 11)

TELECOMMUNICATION - 27.02.2004 Westel: card fill-up increased
As of next month Westel’s customers can fill up their cards at certain gas stations of Esso and JET networks, thus the number of balance fill-up locations increases to 2600. (VG p14)

INFORMATION TECHNOLOGY - 24.02.2004 Fujitsu Siemens delivered better numbers
Fujitsu Siemens Computers Kft. achieved a sales revenue exceeding 6.5 billion forints last year. This exceeds previous year’s turnover by 36 percent. The company increased its sales mainly in the field of desk tops and mobile devices. (VG p8)


INFORMATION TECHNOLOGY - 26.02.2004 Elender sold
The act of sale about Elender’s acquisition was signed at the beginning of the week. The acquirer Euroweb International will submit the documentation of the transaction to the 15 stock market authoruity of the Unites States in fifteen days. The transaction has to be approved by GVH (Economic Competition Office) as well. By acquiring Elender, Euroweb could become the biggest independent Internet service provider company in Hungary. (VG p9)

FOOD INDUSTRY - 27.02.2004 Alcohol free beers are not selling
Last year Dreher Sörgyárak Rt. (Dreher Beer Factories Co.) improved its sales by four percent, while the total market only grew by half-a-percent. Dreher brand also improved four percent, by which it holds its position in the premium category, and despite the many cheap import beers last year the same amount was sold from Arany Ászok – which is in the medium segment – than in 2002, but the sale of alcohol free Dreher and Arany Ászok increases „significantly, but lagging behind plans” – as it was said at the company’s press conference yesterday. It is known about the financial year that closes in March that the plan exceeding last year’s revenues of HUF 35 billion by 8 percent was overfulfilled. (The company planned to exceed the tax profits of 4.7 billion of 2002 by 10 percent.) Michael Short, CEO of Dreher, did not want to undertake to determine which place the company has in the Hungarian beer market, as he said: it was led by the three large groups (Borsodi belonging to the Belgian Interbrew, the Dutch-Austrian Amstel-Brau and Dreher) with a share of 30 percent in case of each. (MH p15)

TRADE, FAIRS - 23.02.2004 Small shops are unbeatable
The turnover of food retail trade exceeded 2000 billion forints last year – turned out from the study of GfK Piackutató Intézet (GfK Market Research Institute). Small shops managed to preserve their market share of 35 percent, just like in last year, although their concentration is accelerated. The market share of shops organised into chains that was 10 percent the year before, increased to 14 percent last year, while the participation of independent shops decreased from 25 percent to 21 percent last year. 21 percent of last year’s overall turnover arises from hypermarkets, which means an increase of 2 percent compared to the year before last year. According to the study the market share of the not organised market decreased by 2 percentage points to 10 percent. The market share of supermarkets, discount shops, drug stores and cash and carry shops were stagnating, which means they participated from the overall turnover as follows: 14, 15, 4 and 1 percent. (NG p5)

TRADE, FAIRS - 24.02.2004 Wal-Mart intends to acquire Spar
According to French press information the French ITM Enterprise leads negotiations with the American Wal-Mart about selling Spar store chain owned by the French company. Based on thhis information Wal-Mart is principally interested in Spar’s discount store network, called Netto. On the contrary German informants understand that ITM would sell Spar to the German trading enterprise named Edeka. (NG p5)

Fine for Media Markt
Due to misleading consumers the Economic Competition Office imputed a fine of HUF 2 million on Media Markt West End Kft. The company seduced customers with products, from which only 1-1 pieces were available at the start of the promotion and they continued to advertise the articles after the sale thereof as well. Competition office inspections were started against several Media Markt stores, but in their case no irregularities were found and the procedure was ceased. (VG p7)


TRADE, FAIRS, CAR - 25.02.2004 Registration tax to modify? – Dealers voicing their anger
Thanks to the successful lobbying of used car dealers, the bill on car registration tax may be modified with the draft put on the agenda of today’s session of the Parliament’s budget committee. Plans call for a new system where there would be 8 different categories depending no the size of the engine, instead of the current 3. Taking into account Hungarian car purchase customs, there would be a lower tax on small cars. In case of used cars, fees 20 percent less than for new cars would have to be paid, however, for cars of the environmentally not up-to-date Euro 2 group a 50 percent extra fee would be levied. Economic daily Világgazdaság carries a detailed table on new fees, according to which they would range from HUF 80,000 to HUF 1.8 million, with the latter one to be paid for cars with engines above 3.000 cubic centimetres. The National Alliance of Vehicle Dealers (Gépjármû-márkakereskedõk Országos Szövetsége (Gémosz)) would not carry out any changes in the registration fee system effective from 1 February – sources from the alliance told the press yesterday. The Alliance is of the opinion that it is especially unacceptable from the buyer’s point of view that registration fees are modified, which would in turn lead to difficulties in selling. Should the proposal be accepted, significantly more categories would be in effect than now. Gémosz thinks that too much attention is paid to the list of cars in terms of their engine size and the classification of „not new passenger cars” is unnecessary. Car dealers are also not satisfied, because after the modifications cars running with an Euro 2 engine – already banned from Poland and Romania - could again be imported. (NG, p 4, VG, p 1 and 4)

TRADE, FAIRS - 27.02.2004 Subway is looking for suppliers
Subway, the American sandwich restaurant chain in, which is expected to open its first store in Budapest, at Deák tér in 4-6 weeks, is looking for Hungarian food industry suppliers in addition to the franchise partners necessary for expansion. The domestic subsidiary of Subway, which operates the world’s leading sandwich restaurant chain, Székelyföld Kft., would mainly purchase bakery products but later on other base materials as well from Hungary. In the beginning the company will bring bread from Croatia. Several Hungarian enterprises have already indicated that they would even change their profile in order to make business with the American company that operates altogether 20660 companies in 72 countries of the world and achieved revenues of 5.6 billion dollars before last year. The one-time franchise fee is 10 thousand dollars and the costs of equipment originating from England and Germany amount to 40 thousand dollars. The company would primarily open stores at railway stations, close to shopping centres and hospitals and in busier streets, but it can appear in certain military bases as well. (VG p1, 13)

TRADE, FAIRS, CAR - 27.02.2004 According to MGE customers come off badly with the „new” registration tax
The Association of Hungarian Vehicle Importers (MGE) supports the currently valid registration tax table. The organisation considers it astonishing, that the registration tax that entered into force as of February 1st after preparation of one-and-a-half years is amended after an „operation” of hardly one week. (Under the amendment to be submitted to the Parliament soon the number of categories would increase to 10 from 5 and cars supplied with the earlier „banned” Euro 2 engine would become importable again.) Executives of brand importers, who have a large turnover, deplore haste, because according to their calculations the registration tax currently being in force finally created a clear situation and made the purchase of cars supplied with modern engines that dismiss less deleterious substances more attractive. If the Parliament amends the law on registration tax, importers, manufacturers and dealers will initiate the modification thereof after May 1st - announced Gábor Gyõzõ, chairman of the Association of Hungarian Vehicle Importers, who thinks that Hungary can become Europe’s wreck site and in addition to this, they will have to provide for recollection and recycling that complies with EU prescriptions. The VAT act also ensures a larger space for used car dealers, since as being members of the EU, entrepreneurs can pay VAT according to their selfdeclaration, thus concerned parties can reduce their budgetary payments – stated János Eppel, managing director of Porsche Hungary Ltd. to Népszava. He added: it is an additional backstairs influence that private importers will pay VAT for the car purchased in an EU country on-site. This way they will be released from paying Hungarian VAT and they will not even have to settle the difference between the two taxes – added the professional. (NG p5, NSZ p5)


TRAFFIC, TRANSPORT - 23.02.2004 Agreement between Wizz Air and Budapest Airport
Wizz Air the new low service airways in Europe concluded a basis airport agreement with Budapest Airport Rt., as a result of this, after Katowice airport the airport in Budapest is the second where the company establishes an operating centre. According to the company’s plan Wizz Air will start its flights from the two bases to more than ten destinations as from May this year. The number of basis airports will increase to five later on. The company will put nine 180 seats airplanes into operation by the end of the year. Due to this Wizz Air will be the biggest discount airways company in Eastern-Europe and after Polish LOT and Czech Republic’s CSA the third biggest airways in Eastern-Europe. (NG p5, VG p8, MH, p13, Nszab., p13)

Debrecen Airport to go international
As of 1 April, the airport in Debrecen will be an international airport and customs zone. It means that behind Ferihegy airport in Budapest, the one in Debrecen will be Hungary’s second international airport. (Nszab, 21 Feb, p 5)

TRAFFIC, TRANSPORT - 25.02.2004 AIG invests in Waberer's
Waberer's group that based on preliminary data closes its last financial year with a sales revenue of 60 billion forints and a profit before taxation of 4 billion forints the private investment fund AIG New Europe Fund managing 320 million dollars concluded a partnership agreement with each other. According to the contract the investment fund that belongs to one of the world’s biggest insurance and financial service provider company to American International Group (AIG) will invest more than two billion forints into Volán Tefu Rt. that will change its name to Waberer's Holding Rt. In the framework of a transaction that must be authorised by Gazdasági Versenyhivatal (Economic Competition Office) Waberer's will issue new shares, which will be underwritten by Transport & Logistic Investment belonging to AIG New Europe Fund. As a result of this transaction Transport & Logistic Investment will acquire a 20 percent stake in Waberer's. By applying a part of this amount the company will increase its registered capital by 243 million forints to HUF 1.14 billion, the remaining 1.8 billion will be handled as capital reserve. AIG fund plans to buy up papers from minority shareholders to increase its ownership ratio to 25-35 percent in the future, while the majority owner will be György Wáberer in the future as well. The memorandum of association was modified according to the agreement, as a result of this Waberer's Holding Rt. got under joint management, with this in view strategic decisions can only be made with the approval of AIG group in the future. Furthermore AIG delegates two managers Pierre Mellinger director of AIG-CET Capital Management, and Géza Széphalmi regional director of AIG-CET to the management of Waberer's. Mr. Mellinger will be the president of board of directors at the forwarding company, while Mr Széphalmi will be board member. Waberer's group would apply the newly received capital for acquisitions in abroad. The company investigates the possibility of acquisitions mainly in Poland, Romania, Ukraine and in Croatia, but on other hand they say transactions in Western-Europe are possible as well. In addition to these they intend to introduce the company on the Stock Exchange. (NG p4, VG p9)

INVESTMENT, DEVELOPMENT, REAL ESTATE - 23.02.2004 Increase in prices is expected in the real estate market
The real estate barometer index of Ecostat reached 51.5 percent in the last quarter of 2003. The indicator exceeds the figure of the previous 3 months by 3.3 percentage points. Compared to whole last year the indicator showed 50.5 percent, which is 1.7 higher than the figure of 2001, although was 3 percentage points under 2002’s figure. According to the study of Ecostat players in the real estate market expect increasing prices in the first half of this year: the prices of sites can be 15.7 percent, the price level of „A” category offices by 11.1 percent, and the price of turn-key homes can be 10.7 percent higher. (MH Feb. 21-22, p10, NG Feb. 23, p17)

INVESTMENT, DEVELOPMENT, REAL ESTATE - 24.02.2004 Returning real estate business in Eastern Europe
Return conditions currently are the most favourable in the investment real estate market in Moscow, but Budapest, Prague and Warsaw are also in among the top ones – reveals the survey of Urban Land Institute and PricewaterhouseCoopers. In mid-term retail facilities, the housing market and hotels are the most attractive investment options. (VG p19)


INVESTMENT, DEVELOPMENT - 27.02.2004 New production installed at Hydro Alumínium Kft.
The most significantly developing subsidiary of the Norsk Hydro corporate group, the Hungarian Hydro Alumínium Gyõr Kft. concluded an agreement with the automotive industry firm Brilliance about the production of 150 thousand cylinder heads and engine blocks respectively annually. Based on the contract that lasts for three years the Ltd. will deliver the mentioned components to China. This year the company will also take over the production of the mother company’s plant that was closed down in England, thus manufacturing in Gyõr will be expanded with the production of 80-100 thousand OPEL cylinder heads – announced Ferenc Havasi, managing director of the firm that produced 910 thousand cylinder heads and 80 thousand engine blocks and achieved revenues of HUF 15.4 billion and a profit of HUF 3.1 billion last year. This year the company that delivers the manufactured components to Renault, Audi, Opel and BMW, expects revenues of HUF 17-18 billion this year and intends to increase the current employee headcount of 500 people by 10 percent. (VG p14)

TAX, SOCIAL INSURANCE - 23.02.2004 VAT rules will change in May
No smooth conversion to the EU VAT system is expected in May – thinks Gabriella Erdõs, senior partner of PricewaterhouseCoopers. The Parliament is now discussing the VAT bill but detailed rules will be recorded in decrees. The category of goods‘ movement and services within the EU will enter into force as of the accession. It will be considered a separate case, whether the foreign buyer is a private person or company and whether it has a community tax number. Different rules will apply to each article, for example old and new cars will fall under separate classification. Significant part of customs warehouses and customs free areas will cease at the accession. Warehouses will have to register at APEH (Tax and Finance Control Office) to the group of VAT payers. A foreigner can do so if it founds a branch office or company in Hungary. (MH Febr. 21-22nd p9)

SECURITIES’ MARKETS - 24.02.2004 Rather household sector buying government securities at the end of the year
Measured on the basis of market value, Hungarian government debt securities holdings fell by 1.3 percent HUF 7,821.9 billion in Q4 2003, the National Bank of Hungary (MNB) said. The decline in the last quarter of 2003 was due exclusively to a 3.9 percent drop in treasury bill holdings. The stock of government securities at the household sector went up by HUF 100 billion, whilst that of foreign holdings feel by HUF 147.9 billion. Financial companies holdings of government securities also went down by HUF 75.6 billion. The stock of exchange securities increased by HUF 135.7 billion to HUF 3,470.1 billion. Household purchase of securities went up by HUF 18.8 billion and foreigners’ investments increased by HUF 52.9 billion. The stock of investment notes fell from HUF 1,068.8 billion to HUF 894.1 billion. (VG, p 13)

WORLD ECONOMY - 23.02.2004 Leading in political stability
Hungary leads Eurasia Group‘s political stability index. The American consulting firm follows the conditions of emerging countries month by month with Deutsche Bank. The lagman is Nigeria and the least stabile European country is Turkey. (VG p2)

MEDIA - 24.02.2004 World economy magazine from BBC
As of March BBC will broadcast a world economy magazine each weekday from London on Kossuth Radio’s programme called Déli Krónika. The eight-minute compilation will primarily announce European news and international information that can have an effect on Hungary as well. (NG p6)


MEDIA - 25.02.2004 RTL Klub delivered good numbers in January
Magyar RTL Televízió Rt. (Hungarian RTL Television Co.) increased its income arising from advertisements by 12 percent this January on yearly basis. The revenue calculated on the basis of classic advertising spots alone achieved 1.2 billion forints. In January last year the company achieved an expansion of 11 percent compared to January 2002. The television broadcasting channel reached a 7 percent higher televiewer ratio concerning the age group 18-49 years old people than tv2 in the first month of this year. The difference was merely 2 percent in the previous year. (NG p4, VG p10)

Tv2’s income from advertisements increased by a sixth
The revenue of Tv2 arising from advertisements added up to 947.8 million forints in January, which exceeds the figures registered previous year by 16 percent. The above sum includes the total income of the television broadcasting company. According to Zoltán Várdy director of commerce of the channel this expansion proves that advertisers do appreciate the TV channel’s calculable commercial structure. The talent contest show called „Megastar” contributed to the success as well, which beside advertisement income, resulted in a significant revenue arising from sponsoring and telecommunication. Although the view ratio of the production is not as good as of the most watched telecasts, the fact that the album made from the songs of the show leads the sales chart of Magyar Hanglemezkiadók Szövetsége (Alliance of Hungarian Record Companies) clearly hallmarks the business success of the production, and the popularity of the singers as well. As Gábor Kereszty general manager of Tv2 earlier said: they will possibly launch talent contest shows in every year in the future, although not all of these shows will be music oriented. (NG p4, VG p10)