INTERNAL AFFAIRS 01.06.2004 - Americans to train Hungarian officers 04.06.

2004 - EP elections: neck-to-neck competition expected - Majority of forced enterprises not interested in tax amnesty FOREIGN AFFAIRS 01.06.2004 - Bush to meet Medgyessy MACROECONOMY 02.06.2004 - More capital arrived 03.06.2004 - Hungarian economy accelerating 04.06.2004 - Industrial producers‘ prices increased - State tenth to multinationals BANK 01.06.2004 - Foreign exchange loans at FHB 02.06.2004 - Leumi in Budapest 04.06.2004 - Pannon mobile with Credigen credit HEAVY INDUSTRY 01.06.2004 - Dunaferr to change hands in August 02.06.2004 - Three interested in DAM 03.06.2004 - AES parted with Lyukóbánya CHEMICAL INDUSTRY 04.06.2004 - Pharmaceutical manufacturing plant in Tiszavasvári sold ENERGY INDUSTRY 01.06.2004 - Mol concentrating on internal growth - Record profits at Ddgáz 02.06.2004 - Mol decreasing petrol price - Mol opening data room for interested companies 04.06.2004 - Mol can lose transit fees BUILDING INDUSTRY 04.06.2004 - Vegyépszer expecting a worse year ELECTRONICS 04.06.2004 - Hisense’s TV plant opened TELECOMMUNICATION 01.06.2004 - Cisco to expand in IP telecommunications 02.06.2004 - New General Manager at Invitel - The T-Mobile homepage and t-zones started 03.06.2004 - Discount Internet to come INFORMATION TECHNOLOGY 01.06.2004 - Interim General Manager at Sun FOOD INDUSTRY 02.06.2004 - Mátra Cukor unified - Parmalat posting losses above half billion forints 03.06.2004 - Cheap Romanian sugar flows to Hungary - Magyar Cukor posting a near HUF 2 billion profit 04.06.2004 - Dreher Sörgyárak posting better figures - Hungarian Ed Haas becoming a regional centre? - Túró Rudi planning to conquer Europe AGRICULTURE 01.06.2004 - Bábolna expects profit TRADE, FAIRS 01.06.2004 - Kika would build a discount store 03.06.2004 - China Mart is full - Penalty for Henkel - New Dacia to come 04.06.2004 - Hungarians spending weekends in hipermarkets TRAFFIC, TRANSPORT 01.06.2004 - Germanwings is satisfied - Losses and more passengers at Malév - M7: road construction works with traffic jams 02.06.2004 - Malév flying to Dubrovnik - New office manager at British Airways - TAP Air in Budapest 03.06.2004 - Dunaferr is also in competition for Mahart Duna-Cargo 2

- Malév to introduce a kerosene supplementary fee TOURISM, HOSPITALITY 03.06.2004 - Siótour will belong to SCD Holding SERVICES 02.06.2004 - Suez in expansion INVESTMENT, DEVELOPMENT 01.06.2004 - Balaton Plaza opened in Veszprém 02.06.2004 - Helsa bringing production - Umwelt Technik in a billion worth public utility project - New ING fund to invest also in Hungary 03.06.2004 - Etyek: Korda Sándor studio - Récsei shopping centre opens, István Park is under construction 04.06.2004 - Creaton starting another investment of billion forints SECURITIES’ MARKETS 02.06.2004 - BUMIX index on BSE - The turnover of the Budapest Stock Exchange fell 04.06.2004 - Foreign funds are heading to Hungary PUBLIC HEALTH 01.06.2004 - English patient a good business ENVIRONMENT PROTECTION 01.06.2004 - Higher water levels at Lake Balaton 03.06.2004 - British environment service provider coming to Hungary MEDIA 01.06.2004 - NBC to come to Hungary 02.06.2004 - Danubius is still leading OTHER 01.06.2004 - Dogs of uncertain origin from a dog factory?

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INTERNAL AFFAIRS - 01.06.2004 Americans to train Hungarian officers
Within weeks, American army officers will arrive in Tapolca to take part in working out the training programme of Hungarian military forces. Training of future officers will start in a month. (MH, 29 May, p 4)

INTERNAL AFFAIRS - 04.06.2004 EP elections: neck-to-neck competition expected
Surveys of pollsters reveal quite differing figures ten days before European Parliament elections as for the outcome of voting of 13 June. Thinktank Tárki projects a victory for the governing parties, whilst Gallup is of the opinion that opposition Fidesz Hungarian Civic Alliance will come first. Médián expects a draw, whilst Szonda Ipsos was not measuring party preferences separately for the European Parliament elections. Szonda figures show that should elections be held this Sunday, opposition Fidesz Hungarian Civic Alliance could count on 49 percent of votes with governing Hungarian Socialist Party at 39 percent. Junior coalition partner Alliance of Free Democrats SZDSZ at 6 and opposition Hungarian Democratic Forum MDF at 3 percent of votes. According to Medián, largest opposition force Fidesz will have 47 percent, Socialists 37 percent, with Free Democrats at 9 and MDF at 4 percent, thus Fidesz would have 12 seats, MSZP 10, SZDSZ 2 seats. Tárki measured 45 percent support base for Hungarian Socialist Party and 44 percent for Fidesz Hungarian Civic Alliance, whilst SZDSZ has 6 percent and MDF 3 percent. The thinktank calculates that MSZP and Fidesz would have 10 seats each with Alliance of Free Democrats also delegating at least one person with a second mandate either going to MDF or staying with the Free Democrats. Gallup figures reveal that Socialists will have 37 percent of those with a clear party preference, whilst Fidesz could boast a corresponding figure of 50 percent. SZDSZ is supported by 7 percent and MDF would stay under the threshold of 5 percent. These figures are likely to be the last ones published, since European Parliament election-related projections could be given till today. (Nszab, p 1 and 6, MH, p 1 and 4, NSZ, p 1 and 8)

Majority of forced enterprises not interested in tax amnesty
The deadline of the tax amnesty for so-called forced enterprises expires in the end of June. However, only 34 companies have made use of it till the end of April. It seems that firms taking a wait-and-see approach have made the right choice, since the deadline has been extended by another year after the government has backed the proposal put forward by Member of Parliament from Alliance of Free Democrats SZDSZ Iván Petõ. Daily Magyar Hírlap has learnt from the Tax Office that the 34 firms applying for the tax amnesty have restructured or terminated the imitated contracts, the number of which reached 619. These enterprises will be exempt of paying a sizeable penalty, tax and fees with a retrospective effect for 5 years. (MH, p 1 and 9)

FOREIGN AFFAIRS - 01.06.2004 Bush to meet Medgyessy
President of United States George W. Bush is meeting Hungarian Prime Minister Péter Medgyessy in Washington on 22 June. Medgyessy announced the information on Friday in Guadalajara where he took part in the summit of Latin America and the European Union. The Prime Minister stated that his journey to the United States is aimed at paving the way for Hungarian enterprises on the American market and also at drawing American investors’ attention towards Hungary. (Nszab, 29 May, p 1 and 3, MH, 29 May, p 7, NSZ, 29 May, p 2, MN, 29 May, p 3)

MACROECONOMY - 02.06.2004 More capital arrived
This year the Ministry of Economy and Transport counts on capital flow of 3.5 billion euros compared to the 3.44 billion euros of last year. In the first quarter capital of 756 million euros arrived to the country, which is 124 million euros more than that of the previous year. (MH p9)

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MACROECONOMY - 03.06.2004 Hungarian economy accelerating
Hungary’s GDP rose by 4.2 percent year on year in the first quarter of 2004, according to preliminary figures released by the Central Statistics Office (KSH) on Wednesday. The consensus of analysts for January-March GDP growth was 3.6 percent. The figure shows that the economic upturn, which started last year, shows no signs of abating. An important driving force behind the larger than expected GDP growth was the dynamic expansion experienced in the construction and electric machinery sector. Investments went up by 18.9 percent year on year, significantly up on the consensus figure of 6 percent. Such a figure in investment growth has been unprecedented for 20 years. According to ING Bank’s economist György Barcza, the good GDP figure will generate extra income, thus GDP-proportionate general government deficit may slow down by as much as 0.4 percent. The analyst expects GDP growth o 4.3 percent for the whole year, making it the best GDP figure in the last four years. (NG, p 1 and 3, VG; p 1 and 5)

MACROECONOMY - 04.06.2004 Industrial producers‘ prices increased
In April industrial producers‘ prices increased by 4.4 percent in an annual comparison and by 0.6 percent on a monthly level – stated KSH (Central Statistics Office). In the past 12 months domestic sales prices rose by 8.4 percent and exports prices measured in HUF by 1.3 percent. Otherwise, in the first four months of the year, compared to the same period of last year energy sources got more expensive by the highest degree, 16 percent, but agricultural producers‘ prices also increased more than the average, by 13.8 percent. (MH p10, NG p3)

State tenth to multinationals
Bosch group that settled in Hungary more than one decade ago and employed its three thousandth employee yesterday, will expand its activity in the value of HUF 38 billion (150 million euros), will create 2 thousand new workplaces by 2006 and receive significant state subsidies for this. The agreement about this was signed by the Minister of Economy and the executives of the corporate group‘s concerned member companies yesterday. In Miskolc they will expand the production of electric hand tools, in Hatvan vehicle techniques production and in Eger pneumatic partial units will be increased. The state incents developments by a new form of subsidy that was introduced yesterday: it covers each tenth HUF of the costs of giant investments of the value of HUF 12.6 billion (50 million euros) to be implemented between 2004 and 2006, without tender, on a negotiation basis, and in exchange the multinational guarantees that for 5 years it will not terminate subsidised jobs. Magyar Hírlap claims to know that a similar contract will also be signed with Electrolux soon, which will build a vacuum cleaner factory in Jászberény, and in the next few weeks several such agreements can be concluded with companies that will invest altogether HUF 176 billion (700 million euros) this year. If the Ministry of Economy would subsidise all of them from the investment incentive limit, it would mean the spending of HUF 17 billion without tenders. (MH p9, Nszab. p17)

BANK - 01.06.2004 Foreign exchange loans at FHB
FHB (Land Credit and Mortgage Bank) will launch euro and Swiss franc based home loans as of June 1st. The loan can be borrowed in the value of HUF 1-50 million. The interest is 5 percent in case of a euro value equal to HUF 10 million, 3.5 percent in case of Swiss franc and 4.8 and 3.3 percent above this. The handling cost is 0.22 percent. (NSZ May 29th p5, Nszab. May 29th p14, MH May 29-30th p13, MN May 29th p11, NG June 1st p5, VG June 1st p14)

BANK - 02.06.2004 Leumi in Budapest
Bank Leumi will open a branch in Budapest – reported the newspaper Haaretz. The Israeli credit institute does not intend to provide either crediting or other services for the time being, its activity would be limited to advertising the name Bank Leumi. Its representation will be fulfilled in Hungary by the husband of the accredited ambassador, Judit Várnai-Shorer, Oded Shorer. According to the paper Várnai-Shorer will soon be replaced by David Adon at her post, but the date thereof is unknown. PSZÁF (State Supervision of Financial Organisations) has not been contacted by Leumi yet. (VG p14)

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BANK - 04.06.2004 Pannon mobile with Credigen credit
Due to waiting that is caused by price reductions expected from the accession and the population‘s decreasing consumption mood in the first month of the year Credigen Bank Rt. placed loans of HUF 2.3 billion, which is 30 percent less than preliminarily expected. Gyula Bíró, the first man of the firm, stated: promotions held in relation to the football EC and the Olympics and the Christmas season can have a favourable effect on business. But Credigen tries to make its offer more colourful by new products as well: in addition to the product offered for the financing of IBUSZ trips, the crediting firm being in French hands provides loans for the purchase of mobile phone devices in co-operation with Pannon GSM Rt. By utilising the new construction the subscribers of Pannon GSM can purchase mobile phones with 12 months‘ instalment payment, under 0 percent interest and annual total credit fee indicator. (NG p4, VG p19)

HEAVY INDUSTRY - 01.06.2004 Dunaferr to change hands in August
The privatisation process of steelmaker Dunaferr may come to an end soon, since Swiss-Ukrainian investment consortium led by Donbass has finished talks with crediting banks in a theoretical agreement. According to press information, Hungarian Development Bank MFB has intervened in the process through restructuring loans of Dunaferr. The consortium will take over ownership rights by 24 August. The new owner will raise capital by HUF 17 billion and undertakes that it will further employ the staff of 8,400. Dunaferr posted a HUF 193 million consolidated pre-tax profit last year and plans a corresponding figure of HUF 5.7 billion this year. (NSZ, 29 May, p 5, Nszab, 29 May, p 14, MH; 29-30 May, p 9, NG, 1 June, p 5, VG, 1 June, p 1 and 9)

HEAVY INDUSTRY - 02.06.2004 Three interested in DAM
Three bidders have tabled four bids to buy the assets of steelmaker DAM, going through a liquidation process since last March – it turned out at yesterday’s opening of bids. The Diósgyõr-based company, earlier in Italian hands, has a price of HUF 5.3 billion in the third round of applications. Interested companies did not agree to the publication of their names, all we know is that one bid contains the condition that should the 1,100-strong workforce be further employed, then the price will be lower, however, should number of workers be decreased, price could be higher. The liquidator hopes that a decision can be made in the middle of next week. (Nszab, p 15, MH, p 10)

HEAVY INDUSTRY - 03.06.2004 AES parted with Lyukóbánya
Yesterday AES Borsodi Energetikai Kft. transferred the ownership right of its plant in Lyukóbánya to Lyukóbánya Kft. being in the hands of Mendikás Kft. and Regulax Kft. and operating the mine since January. In the future AES Kft. will purchase coal from the mine at market prices in order to supply its coal-fed furnaces. Otherwise AES Borsod plans a technological change and renovation in its two furnaces due to high working expenses and it has also put a biomass furnace into trial operation. (NG p5)

CHEMICAL INDUSTRY - 04.06.2004 Pharmaceutical manufacturing plant in Tiszavasvári sold
Valeant group, operating a total of 15 pharmaceutical manufacturing plants all around the world, is to sell 10 of them and is going to merge its capacity to the five remaining units in the future. Plants to be sold include ICN Magyarország Rt.’s plant in Tiszavasvári. Before selling it, Valeant would like to make it economical, thus 140 employees of the 600-strong staff will be fired in the near future. The trade union, demonstrating against the group-like staff reduction is demanding the suspension of the decision and asks for the measure to be reconsidered. (Nszab, p 17)

ENERGY INDUSTRY - 01.06.2004 Mol concentrating on internal growth
Hungarian oil and gas distributor Mol is concentrating on internal growth, since three of its co-operation initiatives have fallen through recently – General Manager György Mosonyi told Bloomberg. Mol has not applied for Czech Unipetrol, whilst its Austrian peer OMV can buy Romanian Petrol. As for Polish PKN Orlen, no agreement has been made. The Hungarian oil giant is counting on harsher competition in the region, since OMV and PKN have also taken steps on the road to regional expansion. Mosonyi is not afraid that Mol could be an acquisition target, the report concludes. (NG, p 7 and 8)
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Record profits at Ddgáz
Dél-dunántúli Gázszolgáltató Rt. (Southern Transdanubian Gas Provider Co.) closed the most profitable year of its existence last year. Taxed profits rose to double than that of the previous year, to HUF 1.7 billion. Two-thirds of the profit will be paid as dividend. (MH May 29-30th p12, NG June 1st p5)

ENERGY INDUSTRY - 02.06.2004 Mol decreasing petrol price
Hungarian oil and gas distributor Mol Rt. decreases the price of petrol by HUF 2 as of Thursday, whilst diesel price will go down by HUF 4. The oil giant reasoned that after a significant price increase on international markets experienced in the middle of May, the last days saw lower rates for crude oil and oil products. (NSZ, p 5)

Mol opening data room for interested companies
Hungarian oil and gas distributor Mol has opened its data room – spokeswoman Bea Lukács announced. Eventual buyers can take a closer look at data of Mol‘s three gas companies, namely natural gas storing Földgáztároló, natural gas transporter Földgázszállító and provider Földgázellátó. (NG, p 12)

ENERGY INDUSTRY - 04.06.2004 Mol can lose transit fees
Mol Rt. (Hungarian Oil Co.) can lose transit fees of a significant amount, approximately 6 million dollars, if the ministerial politicians of Zagreb achieve that Croatia withdraws from the Adria-Friendship oil pipe project. Croatian representatives main refer to environmental protection risks. Otherwise, as of the end of the year oil would be delivered to Adria from Samara in Russia through the two oil pipes that are connected in Hungary. (VG p1, 10)

BUILDING INDUSTRY - 04.06.2004 Vegyépszer expecting a worse year
After posting a HUF 63.3 billion sale revenue and after-tax profits of HUF 4.2 billion last year, construction company Vegyépszer is expecting sales revenues at HUF 56 billion and net profits at HUF 4.6 billion for 2003. Lower revenue figures are the result of the fact that the settlement of the payment for the M7 motorway stretch between Ordacsehi and Balatonkeresztúr will be due early next year. As for further years, revenue is projected to reach HUF 75 billion next year and HUF 70 billion in 2006. (NG, p 5)

ELECTRONICS - 04.06.2004 Hisense’s TV plant opened
Yesterday saw the opening of Chinese Hisense’s TV assembly plant in the industrial park of Flextronics in Sárvár. Production figures will reach 150,000 sets this year and is set to grow to 300,000 sets next year. The plant was built in an investment of USD 3 million and its Hisense products will mainly go to European markets. Workers are employed by Flextronics. (NSZ, p 10, NG; p 5)

TELECOMMUNICATION - 01.06.2004 Cisco to expand in IP telecommunications
Like list year, Cisco Systems Magyarország plans to sell 10,000 IP telephones in 2004, too. According to calculations, other companies have sold a total of 3,000-5,000 sets. In case of new investments, 60-70 percent of companies are installing these systems. (NSZ, 29 May, p 5, VG, 1 June, p 12)

TELECOMMUNICATION - 02.06.2004 New General Manager at Invitel
As of today, Martin Lea takes over as the General Manager of Invitel Telecommunications Service Rt. She is the successor of David A. Riffelmacher who filled in the position till last December when he resigned, citing family reasons. For the interim period, Chairman of the Board Ian McKenzie took over. The new General Manager has been spending the past 12 years working for companies dealing funding, telecommunications and network integration services and has gained international management experiences in the Unites States, Europe and in Asia. (NSZ, p 10)

The T-Mobile homepage and t-zones started
As of today T-Mobile‘s content service, which is extended by the corporate group‘s international partner relations, can be reached under the name of t-zones. The former Westel homepage can be reached at the www.t-mobile.hu address. The transformation of the page will start on June 2nd in the evening and can last form more than one day. (NG p5)
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TELECOMMUNICATION - 03.06.2004 Discount Internet to come
Thanks to Net-Space Kft. that purchased the franchise right of EasyInternetCafé the first unit of the network that is the first to ensure cheap Internet access can be opened at the end of this summer. In accordance with international practice, computers will be placed in the stores of a local fast food chain. According to plans, later on Net-Space will open several stores in Budapest and in the countryside cheap Internet cafes will mainly be established in university towns. They plan to install 50-70 computers in Hungarian units. (VG p1, 11)

INFORMATION TECHNOLOGY - 01.06.2004 Interim General Manager at Sun
Gábor Hegedûs has been appointed the interim General Manager of Sun Microsystems Kft as of 26 May. General Manager János Keresztesi went on unpaid holidays for a longer period. (VG, p 9)

FOOD INDUSTRY - 02.06.2004 Mátra Cukor unified
The German Nordzucker initiated the merger of processors in Szolnok and Szerencs, being in its ownership into Mátra Cukor Rt. (Mátra Sugar Co.). The first step of the restructuring was the termination of beet processing in Hatvan, where storage and logistics remained. (VG p11)

Parmalat posting losses above half billion forints
Dairy company Parmalat Hungária Rt. posted losses above half billion forint in the first quarter of the year – it was announced on the forum held for the company‘s creditors. General Manager of liquidator TM-Line Kft. Ferenc Somogyi stated that a body of creditors could be formed on the next forum, scheduled for 16 June. By that time, the business plan for the second half of the year could be finalised. (NG, p 1)

FOOD INDUSTRY - 03.06.2004 Cheap Romanian sugar flows to Hungary
Smart private importers can bring in 5-8 thousand tons of sugar weekly from Romania at a price cheaper by HUF 100 per kilogram compared to Hungarian prices. They utilise the opportunity that 50 kilograms of sugar per capita can be taken over the border duty free, thus with 4-5 persons by car, in several turns a serious quantity can be „imported“. The business line promises to be permanent, since in Hungary the price of sugarbeet increased by 30-35 percent after the EU accession and – by the disappearance of cheap sugar that was left from last year‘s production – this can slowly be incorporated into sugar prices, which is expected by experts to be at least around HUF 200 per kilogram. (Nszab. p15)

Magyar Cukor posting a near HUF 2 billion profit
Sugar producer Magyar Cukor Rt. posted a HUF 16.9 billion sales revenue and a HUF 1.93 billion aftertax profit in the business year of 2003-2004. Turnover went down by 9 percent during the last year, whilst profit figures are unchanged from the previous year. The company, being in the hands of Austrian Agrana group, expects sales revenue to the tune of HUF 20 billion and after-tax profit reaching HUF 2 billion in the 2004-2005 business year. Agrana is owned by German Südzucker, Europe’s largest sugar concern and realised sales revenues of EUR 866.4 million and net profit of EUR 56.5 million in the 20032004 business year. (NG, p 4)

FOOD INDUSTRY - 04.06.2004 Dreher Sörgyárak posting better figures
Brewery Dreher Sörgyárak posted sales revenue of HUF 40.5 billion in the financial year to March, translating into a 12.8 percent increase year-on-year. Dreher sold 5.7 percent more beer with the 2.4 million hectolitre figure giving it a market share of 33 percent after 32 percent measured a year earlier, making it a market leader. (MH, p 9, NG, p 4, VG, p 7)

Hungarian Ed Haas becoming a regional centre?
Food retailer Ed Haas Hungária Élelmiszeripari Kft. posted net revenue figures of HUF 2.9 billion and had another HUF 700 million from export activities. While announcing last year figures, Tibor Bozori, General Manager of the company, leading the Hungarian market of sparkling energy tablets with a 54 percent market share said that he hoped that the Hungarian subsidiary could manage the regional activities of the group in the near future. (NG, p 5)

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Túró Rudi planning to conquer Europe
Danone and Friesland that share the licence right of the cottage cheese bar covered with chocolate, which is of Soviet origin (and is considered a Hungaricum) and of three production plants would introduce Túró Rudi to Europe. (Danone‘s products are present in Poland, while those of Friesland in Romania too.) As the first step, the Dutch company producing the traditional Pöttyös Rudi would target neighbouring countries with the product to be introduced under the name of Dots – developments of HUF one-and-a-half- billion were implemented in the near past in the plant in Mátészalka – then it would head towards Benelux states. Danone‘s "magic weapon" is Danette Duett Rudi, and they would appear with it in all countries – practically in the whole of Europe – where Danette Duett pudding is already known. (MH p10)

AGRICULTURE - 01.06.2004 Bábolna expects profit
Bábolna closed last year with revenues of HUF 40 billion and losses according to the balance sheet of HUF 2.7 billion. Zoltán Velez, president, said after the suspended general assembly on Friday that the company could operate profitably this year. (NSZ May 29th p5, Nszab. May 29th p14, MN May 29th p13)

TRADE, FAIRS - 01.06.2004 Kika would build a discount store
As the first in Eastern Europe, Leiner/Kika would build a discount furniture store in Hungary, in the region of Budapest – writes Wirtschaftsblatt. The Austrian group will inaugurate its discount store in Krems in June. In the next three years 15 additional units will be opened in Austria and the network will also gradually appear in Eastern Europe. (NSZ May 29th p10, VG June 1st p11)

TRADE, FAIRS - 03.06.2004 China Mart is full
By this autumn China Mart in Budapest will be filled. An increasing number of Chinese, Vietnamese and Turkish wholesalers settle in the commercial centre, and though 7 thousand square metres of storage space is also rented in the neighbouring Asia Center, in two years an additional logistics centre might become necessary – said Levente Kishonti, deputy general manager, who thinks that Hungary could become the logistics centre of Chinese commerce. (MH p10)

Penalty for Henkel
The Economic Competition Office obliged Henkel Hungary Ltd. to pay a fine of HUF 14 million, because it announced misleading, ungrounded statements about its detergents in commercials. (NG p4)

TRADE, FAIRS, CAR - 03.06.2004 New Dacia to come
The French Renault will make its car factory located in the Romanian Pitesti suitable for the production of new Dacia cars by a development of nearly 400 million euros. The French company primarily wants to sell the cars that will mainly compete with FIAT Panda, Skoda Fabia and Daewoo‘s smaller models in Central Eastern European markets. For the time being three types of components will arrive to the Dacia plant from Hungary, but according to plans, in the future the number of Hungarian suppliers can increase. Domestic distribution will start in October but the sales price is not known for the time being. (NG p5)

TRADE, FAIRS - 04.06.2004 Hungarians spending weekends in hipermarkets
According to the latest survey of market research company GfK Piackutató Intézet, 4 percent of the total HUF 2,095 billion turnover of fast moving consumer goods was realised on Sunday and 19 percent on Saturday. Thus, retail companies posted a HUF 482 billion turnover at weekends. When it comes to hipermarkets, 10 percent of all purchases took place on Sundays and 20 percent each on Fridays and Saturdays. (NG, p 5)

TRAFFIC, TRANSPORT - 01.06.2004 Germanwings is satisfied
Germanwings reported increasing passenger numbers, 80 percent utilisation and the launch of new flights. The discount airline has been operating flights between Budapest and Cologne for one year, and since last September between Stuttgart and the Hungarian capital. The company operated profitably in the first quarter already. (MN May 29th p11, NG June 1st p5)
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Losses and more passengers at Malév
Last year Malév Hungarian Airlines produced HUF 9.5 million operating and HUF 13.5 billion pre-tax losses with net revenues of HUF 110.7 billion. However, the number of passengers increased by 8 percent and the product scale expanded by five new destinations. This year the HUF 3 billion worth replacement of fleet means the largest cost. (NSZ May 29th p5, Nszab. May 29th p14, MH May 29-30th p9, MN May 29th p11, VG June 1st p11)

M7: road construction works with traffic jams
Starting from this week, motorists may expect traffic jam on several loads leading to Budapest. As of Tuesday, lanes of motorway M7 to the direction of Budapest will be locked for traffic from the M0 ringroad exit to the joint stretch of M1 and M7. Construction works here will be completed on 10 June. As a result, motorists will have to use M1, M5, road No. 6 or No. 7 instead. On the side leading to Lake Balaton there will be only minor disturbances. On the positive side, works at the M0 junction will finish on Saturday, so there motorists already will not have to change to alternative roads. (Nszab, 29 May, p 8)

TRAFFIC, TRANSPORT - 02.06.2004 Malév flying to Dubrovnik
As of 1 June, Hungarian national airline Malév flies from Budapest to Dubrovnik three times a week till the end of October. Malév mainly counts on tourists, who, instead of the 10-12 ride to the Croatian seaside, will need 1 hour and 20 minutes to go there. (NSZ, p 5)

New office manager at British Airways
Ferenc Molnár is the new sales and marketing director of British Airways‘ office in Budapest. The tourism economist has worked at General Electric‘s Hungarian and Eastern European companies up to now. (VG p11)

TAP Air in Budapest
TAP Air Portugal started its flights to Budapest yesterday. This week will see three planes coming to Hungary, two of them flying from Lisbon to Budapest and then back via Prague, whilst the third one is a direct flight between the Portuguese and the Hungarian capital on Saturday. Flights are operated by the Portuguese carrier, but Hungarian national airline Malév also sells tickets for them. The agreement was singed yesterday by Deputy Chairman of TAP Air Portugal José Guedes Dias and Deputy General Manager of Malév Ervin Nemes. In the future there will be a direct flight between Budapest, Zurich and Lisbon, operated by Malév between the Hungarian and the Swiss capital. After changing flights there, TAP Air becomes the operator. (NG, p 4, VG, p 9)

TRAFFIC, TRANSPORT - 03.06.2004 Dunaferr is also in competition for Mahart Duna-Cargo
The Austrian DDSG-Cargo GmbH that has an annual turnover of 40 million euros and applied to the privatisation tender announced for Mahart Duna-Cargo Kft. would execute a capital rise of 7.2 million euros and a development of 10 million euros at the Hungarian company in addition to paying the purchasing price. According to the calculations of the Austrian company, under its management Mahart Duna-Cargo‘s Western European turnover would double from the current 500-600 thousand tones and in the second year the Hungarian company could already become profitable. In accordance with the call for tenders, DDSG undertakes employment; from the current 217 boatmen it intends to keep 160. Five companies are in competition for the Mahart daughter, and in addition to the German Rhenus group, the Bavarian Bavaria shipping company and the pair of Masped Rt.-Plimssol Kft. the main customer of the shipping firm, Dunaferr Rt. together with its Ukrainian-Swiss investors (Donbass-Duferco) also applies and – as Magyar Hírlap learned – provided the best financial offer by far. With its raw material supplies and end product deliveries the company would provide continuous work for the product transportation company, furthermore, after the privatisation of the Free Port in Csepel, Dunaújváros can become DunaCargo‘s free domestic port. The CEO of Dunaferr did not comment on the paper‘s information, Péter Hónig only said: his company can ensure market for the Hungarian shipping company in long term. ÁPV Rt. (State Privatisation and Holding Co.) is expected to announce the results by the end of June. (NG p4, Nszab. p16, MH p10, NG p5)

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Malév to introduce a kerosene supplementary fee
Due to the continuous rise of mineral oil prices, as of Monday Malév will introduce a supplementary fee of 4 euros per route section for its scheduled flights, for an undetermined period of time, thus a return trip will be more expensive by 8 euros. (The measure does not concern a few flights, for example the ones to London or Moscow.) Without the introduction of the supplementary fee the Hungarian airline‘s expenses would increase by HUF 1 billion due to the price rise of kerosene. If prices would fall in the oil market, they will terminate the supplementary fee immediately. (NSZ p9)

TOURISM, HOSPITALITY - 03.06.2004 Siótour will belong to SCD Holding
ÁPV Rt. (State Privatisation and Holding Co.) sold Siótour Idegenforgalmi és Kereskedelmi Rt. (Siótour Tourism and Commercial Co.) that operates 11 campings and four recreational sites at Lake Balaton to SCD Holding Ingatlanfejlesztõ és Befektetési Rt. (SCD Holding Real Estate Developer and Investment Co.) for HUF 3.12 billion. In the next five years the buyer intends to spend nearly HUF 50 billion on tourism investments on the Southern shore of Lake Balaton. By the developments – among others, construction of additional hotels – SCD would extend the tourism season to winter also. (NG p5, Nszab p16, MH p11)

SERVICES - 02.06.2004 Suez in expansion
The next days can see the signing of an agreement, which would result in Aquainvest Kft., being in the interest group of French Suez SA, increasing its stake in Tamási Joint Water ad Sewage Works Kft. (Tamási Közös Víz- és Csatornamû Kft) to 49 percent. The purchase price of the 38 percent package is HUF 140 million. The bath in Tamási will stay in the hands of the self-government. Aquainvest is planning to carry out further acquisitions. Economic daily Napi Gazdaság has learnt that the company plans to set its feet mainly in large towns in the eastern part of the country. (NG, p 1 and 4)

INVESTMENT, DEVELOPMENT - 01.06.2004 Balaton Plaza opened in Veszprém
Plaza Centers have opened its 16th shopping centre in Hungary, bringing its total investments in Hungary to EUR 500 million. Balaton Plaza was built in an area of 12,000 square meters in an investment of EUR 12 million and numbers 58 stores. 54 of them have already been sold and 98 percent of the area has already been leased. In the shopping centre there is a multiplex with 4 cinemas and a total capacity of 700 people and free parking places for 400 cars. The 15 shopping centres of Plaza Centers had 60 million customers last year, whilst so far this year this number has been 20 percent up. (MH, p 12)

INVESTMENT, DEVELOPMENT - 02.06.2004 Helsa bringing production
German Helsa-Werke Helmut Sandler GmbH is going to relocate the majority of its Western European production to Zalaegerszeg-based Helsa Confection Kft. –daily Napi Gazdaság has learnt. The German ready-to-wear firm cited increasing production costs as the reason for the relocation. The capacity of the Hungarian subsidiary will be raised by 30 percent. In an investment of several hundred millions of forints, 30 special sewing machines and a computer-managed cutter machine will be made operational and in a parallel move, the number of employees will go up by 70. (NG, p 4)

Umwelt Technik in a billion worth public utility project
In the next five years the Austrian Rabmer‘s subsidiary, Umwelt Technik Ltd. will renovate 46 kilometres of water pipes in Budapest. The value of the assignment is 20 million euros (HUF 5.03 billion). (VG p9)

INVESTMENT, DEVELOPMENT, REAL ESTATE - 02.06.2004 New ING fund to invest also in Hungary
ING is to set up an EUR 600 million real estate fund, the eventual investment destinations of which can be Hungary, Poland and the Czech Republic – economic portal portfolio.hu writes. The real estate fund is rumoured to invest in office and real estate establishments. (NG, p 4)

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INVESTMENT, DEVELOPMENT - 03.06.2004 Etyek: Korda Sándor studio
The studio complex, that will be built in Etyek in a joint enterprise by Andy Vajna producer and Sándor Demján entrepreneur will be named after Sándor Korda, director. The budget of the project is HUF 38 billion (150 million euros). According to plans the facility will be completed by the end of 2005. In the first step six studios will be established, which will be equipped with state of the art techniques. The area of the largest building will be 6069 square metres, where a pool will also be established, which is necessary for underwater shooting. According to the estimations of Demján, films could be produced in the Korda studio in the value of HUF 500-600 million annually, thus, according to his hopes, the investment can return in ten years already. (Nszab p8, NSZ p8, MH p14)

Récsei shopping centre opens, István Park is under construction
All rentable stores are let in Récsei Shopping and Entertainment Centre to be opened tomorrow. The centre was build in hardly half-a-year, for HUF 3 billion in the place of a bus garage in Zugló. The Israeli owner of the investor SL Properties Kft., who covered 65-70 percent of costs from loans, borrowed from MKB (Hungarian Foreign Trade Bank) and counts on a return in 15 years, will start to build the residential houses of István Park next to the shopping centre. The value of the project is HUF 12.5 billion. The first apartments will be handed over in one-and-a-half years and the average price will be HUF 300 thousand per square metre. (NSZ p10)

INVESTMENT, DEVELOPMENT - 04.06.2004 Creaton starting another investment of billion forints
Creaton AG will start a greenfield investment in Lenti as part of the relocation of its Western European production. The investment is valued at almost HUF 2 billion. An officer of the self-government of Lenti said that the leading German tile manufacturer is planning to set up a regional logistic centre on the area of 10,000 square meters besides the capacity-increasing investment. The construction is set to start next year and is set to finish in 2006. In a parallel move, Creaton Hungary Kft. is to begin the realisation of the earlier announced HUF 4.5 million investment aimed at the construction of a roof tile plant. (NG, p 1 and 4)

SECURITIES’ MARKETS - 02.06.2004 BUMIX index on BSE
The Budapest Stock Exchange calculates and publishes its new index, named BUMIX as of yesterday. The new index contains small and medium capitalisation securities. BUMIX will be the second most important index of the stock exchange behind benchmark BUX, showing an appropriate indicator for smaller shares. BUMIX is made up of 14 shares at present, the accumulated daily turnover of which is above HUF 1 billion. The Budapest Stock Exchange plans that BUMIX will be a listed product of the futures market. (NSZ, p 5)

The turnover of the Budapest Stock Exchange fell
After the 5.4 percent in April, in May the prompt total turnover of the Budapest Stock Exchange decreased by an additional 4.1 percent. According to the summary of BSE, last month broker firms traded in the double value of HUF 617.7 billion in prompt markets, from which share turnover was 554.05 billion, which is 6 percent weaker than that of April. Among broker firms Erste Befektetési Rt. (Erste Investment Co.) had the largest turnover and it is followed by Cashline Értékpapír Rt. (Cashline Securities Co.) and Concorde Értékpapír Rt. (Concorde Securities Co.). The ranking has not changed since April. (MH p13)

SECURITIES’ MARKETS - 04.06.2004 Foreign funds are heading to Hungary
Through investment service provider firms several foreign, mainly British and Austrian funds come to Hungary. It is said that up to now 6-12 service providers applied at PSZÁF to get the licence to pursue cross border activities. Foreign funds are similarly interested in the Czech market as well. According to experts, interest can be owed to the fact that by the accession a new market opened, which can be accessed easily by funds. But the expansion of international funds is doubtful, since, due to their different commission structure, Hungarian funds are considered significantly cheaper. However, it is possible that foreign funds will come up with lower fees in the countries to be conquered in order to gain market. (VG p1, 18)

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PUBLIC HEALTH - 01.06.2004 English patient a good business
Hospitals may get extra income through curing foreign patients – daily Magyar Hírlap writes. Should the insurance company of the patient pay for the whole cure, the amount may be several times as much as National Health Fund OEP would pay for a Hungarian one. For some European union member states – for example for Great Britain or the Netherlands – it is more worth to send their patients abroad and on top of all that waiting time in these countries may go up to several moths. For the treatment of citizens coming from countries OEP had earlier entered into contract with, National Health Fund paid HUF 700 million to hospitals. As a comparison, for the same reason this year HUF 1.5 billion is earmarked. (MH, 29 May, p 3)

ENVIRONMENT PROTECTION - 01.06.2004 Higher water levels at Lake Balaton
Lake Balaton is in very good condition: the water is of such a good quality that you can even drink from it, whilst its water level is 19 centimetre higher than measured a year ago – Miklós Persányi said in Balatonkenese on Friday. The Environmental Protection and Water Management Minister is of the opinion that on the back of weather extremes it could be possible that water should be artificially pumped into the lake later on, but this measure is not on the agenda for the time being. (Nszab, 29 May, p 7, MH, 29 May, p 5, NSZ, 29 May, p 4)

ENVIRONMENT PROTECTION - 03.06.2004 British environment service provider coming to Hungary
CL Associates, dealing with environment-related services and counselling, belonging to the interest group of British Mowlem Environmental Services, is going to set up a Hungarian subsidiary. The company is entering the Hungarian market, growing at a slower than expected pace, on the back of an expected expansion of environment protection developments. (NG, p 1 and 4)

MEDIA - 01.06.2004 NBC to come to Hungary
NBC Universal is planning to enter the Hungarian television market. President of Universal Studios Networks Patrick Vien told Handelsblatt that the media concern was having talks on starting new channels in Poland, Hungary and in Scandinavia. Leaders of NBC Universal, however, have not contacted UPC and MatávKábelTV yet. (VG, p 11)

MEDIA - 02.06.2004 Danubius is still leading
Commercial radio‘s advertisement market share is expected to increase this year. According to estimations, the market leader Danubius achieved advertisement revenues of HUF 3.3 billion last year, Sláger advertised for 2.4 billion and Juventus for 1.5 billion. Stations belonging to the National Association of Local Radios (Heroe) performed a turnover of HUF 720 million. Danubius proved to be the most popular station in April as well. (VG p10)

OTHER - 01.06.2004 Dogs of uncertain origin from a dog factory?
Animal right protection activists, breeders and veterinarians are of the opinion that there is a dog factory in Hungary. Demand for popular breeds with registration papers in quite high in Western Europe with prices going up to USD 1,500-1,800 instead of HUF 30,000 in Hungary. However, it is not certain that the dog with Hungarian papers is really healthy and is in good condition. Experts are of the opinion that a comprehensive health check is not obligatory, whilst the leader of the largest institution of dog breeders says that there is a libel campaign going on against them. (Nszab, p 1 and 15)

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