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Morning
Business Crew of damaged airplane fined MAV picks four in pre-qualifying round Cape Clear Aviation to run Balaton West French budget hotels in Hungary Vodafone capital increase Legal action over paper title FinMin offers sub's to firms going public New construction software Matáv, T-Mobile launch WLAN services Investors buy out stake in forestry company Erdért Construction company fined Wizz takes off Diners lose appetite Insurance tax break cap Textile maker sags ÁPV invites new bids for agribusinesses Hungary sells Ft 25 bln of bills due Hungary to close gap with EU Economics Ecostat puts Q3 GDP growth near to 4% Politics Gov't parties on anti-privatization motion Democratic Forum for privatization Domestic First Lady opens new British International School No smoking Mother and kidnapped daughter return from Turkey Stockwatch BUX index: BUX Close: 12,666.16 Change: +136.35 (1.09%) Exchange Fixed Middle Rate Weather Tomorrow: p/cloudy

05/10/2004

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Morning
Business

06/10/2004

Economics Politics Domestic

Stockwatch Exchange Weather

Pig farming loss-making business PSzÁF fines Erste Bank Strabag cement site not concrete IT company Kürt plans to expand OTP's cash cow still in Hungary Micro loans fall short Bratislava-B'pest exchange cooperation Poland's clearing house opens KELER account Sony to produce DVD player-recorders in Gödöllo TV2 revenue up Water pipelines to be replaced RWE name change 44 Hungarian companies at Bucharest fair GDP growth prediction, rising consumption Hungary's borrowing costs drop at auction Parliament authorizes signing of EU Constitution Tone of Hungarian politics "too sharp" CoE warns Serbia over ethnic violence in Vojvodina FinMin wants cooperat'n with Slovakian customs Outpatient privatization plan Dialysis treatment feels the pinch Power producers seek higher emissions Gov't spending on water Action against dialing viruses No to airport devlp't BUX index: BUX Close: 12824.87 Change: +158.71 (1.25%) Fixed Middle Rate Tomorrow: p/cloudy

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Morning
Business AgMin seeks extra storage due to bumper harvest László Némethy named new AmCham chairman Sale of VCP's BorsodChem stake completed Matáv's signs with T-Com and T-Mobile Dorotheum buys Orex jewellery stores No punitive U.S. tariffs for Hungaricum CytRx purchases assets of Biorex Magyar Posta's Ft 5.1 bln pre-tax profit Pick to dismiss 198 instead of 450 Premier outlets center to open Lidl to open next week MOL eyes North Africa with INA Semilab buys SemiTest stocks and tech. Wind power park to be built in Bakony Magyar Posta calls car fleet tender Pannonplast expects losses of Ft 1 bln ESA gen gov't deficit target set Budget: real wages to rise 3-4% in 2005 Gyurcsány promises fair taxation in 2005 Ft 1,052 billion invested in SMEs Sept fiscal deficit Ft 91.8 bln New Bp Admin head sees conflict of interest Medgyessy to become roving ambassador New gov't spokespeople named PM congratulates Hungarian Nobel winner BUX index: BUX Close: 12799.04 Change: (-25.83; -0.20%) Fixed Middle Rate Tomorrow: rain

07/10/2004

Economics

Politics Domestic Stockwatch Exchange Weather

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Morning

08/10/2004

Business Microsoft picks Hungary for service center BUX at world-class record high Euro 11 mln for Hungary's wine growers PSzÁF rejects Amstel's offer for Brau Nabi to cut a fifth of work force PSzÁF fines Hamilton Ft 3 mln ÁPV denies rumors of secret privatization plan IT alliance elects new president Private jet hire in Hungary Ft 5 bln worth of MKB II bonds for sale PSzÁF to take two-pronged approach Démász opens Ft 1 bln transformer in Baja Court gives go ahead for subway construction Record rise in DVD sales Economics 2005 budget a step toward eurozone Incentives to hire young staff 2005 motorway funding in PPP constructions Industrial output up, rate down Bankcards gaining popularity Overwhelming applications for EU grants Hotel occupancy up yr/yr Politics Demszky resigns MEP post Hungary, New Zealand to boost cooperation House Speaker joins anti-fascist demo Center-left leaders to meet in Hungary Domestic Healthcare workers hold warning strike Stockwatch BUX index: BUX Close: 12993.61 Change (+194.57, +1.52%) Exchange Fixed Middle Rate Weather Tomorrow: rain

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Morning
Business 6 motorway sections to be built in a concession PBS to invest Euro 5 mln in Budapest BUX flirts with 13,000-point mark Hamilton offers Euro based plan BorsodChem debuts on Warsaw exchange Share delistings pending court decision Hungarians wary of mobile banking Hungarian to head INTOSAI Hungary reconnects with Balkans Bilfinger wins Euro 188 Mln order Musashi progressive social schemes Trade corporations to launch academy Economics Hungary's dynamic growth August trade deficit Euro 370 mln Central bank net foreign assets fall Growth of monetary base slows in Sept. No agreement on wage rises Farmgate prices rise 2.6% yr/yr in Aug. International reserves Euro 10.476 bln Politics Cabinet meets informally in Balatonoszod Domestic Bor presented Bolyai Award Hungary to introduce universal EU driver's licenses Hungarian author gets German book award Ex-National Police chief for Europol's director Stockwatch BUX index: BUX Close: 12954.69 Change: (-38.92, -0.30%) Exchange Fixed Middle Rate Weather Tomorrow:sunny

11/10/2004

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05/10/2004
Business
Crew of damaged airplane fined A Budapest court fined three senior officers of a Hungarian airlines MALÉV Rt crew for jeopardizing an airliner with 91 people on board, MTI reported yesterday. The accident, in which no one was hurt, happened at Thessalonica airport in July 2000. Legal proceedings were initiated against the pilot, the co-pilot and the flight engineer on charges of directly jeopardizing the plane, as they had not read out the mandatory checklist before landing and did not realize that the landing gear was not in place. The court fined the pilot Ft 135,000 (approx. euro 535), while the co-pilot and the engineer were fined Ft 105,000 (approx. euro 400) each. The defendants also have to pay Ft 1.4 million (approx. euro 5,400) in legal fees. (MTI; Nb 1, MH 20, Nv 12) MAV picks four in pre-qualifying round Hungarian railways MÁV Rt has picked Stadler-Ganz, Siemens AG, Bombardier Transportation and Alstom Transport in the pre-qualifying round of a tender to provide 30 multiple units worth around Ft 40 billion, MÁV announced yesterday. The electrical multiple units, which must have automatic doors, a low-floor platform and air conditioning, will be used on MÁV's commuter routes into Budapest. MÁV intends to spend Ft 500 billion on a three-phase commuter rail expansion program by 2010 in order to accommodate the 40-50% increase in commuter passenger numbers from the current 124,000 passengers a day. (Econews; MH 10) Cape Clear Aviation to run Balaton West The owners of Balaton West Airport, located in Sármellék, near Lake Balaton, have changed their contract with the airport's new operators, Cape Clear Aviation, which is owned by Irish investors. Cape Clear will rent the airport from the Sármellék local council and Danubius Hotels from November 1, under a contract originally signed in May. Cape Clear has placed a euro 300 million deposit to cover development costs at the airport. Cape Clear will also have to cover the Ft 10 million in losses the airport generates each month it is out of operation. (Econews; NG 5, MH 11) French budget hotels in Hungary French budget hotel chain operator Akena said is looking for potential franchise partners in Hungary to open lowcost no-frills hotels. Currently operating in France and Belgium, Akena is hoping to set up a batch of hotels at motorway exits and in downtown areas offering accommodation for as low as euro 30-50 per night at three grade levels. Under the franchise contract, hotel operators will have to pay up a one-off Euro 380,000, 4% of their annual revenues, plus another percentage as marketing contribution. (Vg 1) S.F. Vodafone capital increase Mobile operator Vodafone Hungary Rt's registered capital was increased by almost Ft 11 billion from Ft 51.88 billion to 62.76 billion recently. Vodafone's former minority owner, Antenna Hungária Rt, which has recently sold its stake in the company, did not take part in the capital increase. According to Attila Vitai, CEO of Vodafone Hungary, the launch of a new billing system, developments necessary to possible future 3G services and a partial reimbursement of a euro 350 million loan will be financed from the capital increase. (NG 1) R.G. Legal action over paper title Ringier Publishing House Kft is again suing Híd Rádió Rt publishing house of tabloid Színes Mai Lap, demanding Ft 1 billion in compensation for using a brand name very similar to Ringier's former publication Mai Lap without Ringier's permission. In April the Budapest municipal court ruled in favor of Ringier demanding that Híd Radio Rt should change the name because of the similarity. Although Híd Radio Rt changed the newspaper's logo in November, it did not change the name. (NG 1) R.G. FinMin offers sub's to firms going public The 2005 budget bill earmarks Ft 100 million in subsidies for listing fast-growing medium-sized companies in Hungary on the Budapest Stock Exchange, according to an announcement by the Finance Ministry yesterday. 7

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Companies will be able to apply to the Ministry of Economic Affairs and Transport for the funds, which will be used to help defray the costs of going public. The government is expected to submit the bill for next year's central budget to parliament on Thursday. (Econews; Nv 5, MH 13, Vg 14,) New construction software Hungarian software company Graphisoft NV issued a new software package called Virtual Construction, claiming the application to be the first 5-generation construction supporting software in the world. In addition to the usual 3dimensional modeling design program, Virtual Construction also provides construction scheduling services and cash-flow analysis for projects. The company claims that by using Virtual Construction, realization costs can be cut by 2-3%. (NG 11) R.G. Matáv, T-Mobile launch WLAN services Matáv Rt and its subsidiary T-Mobile Magyarország Rt, a mobile phone service operator, will allow their customers to use wireless LAN (WLAN) public access points, or hot spots, around the city free of charge, the two companies announced yesterday. Customers with the right equipment will be able to access the internet at 28 TMobile and 53 Matáv WLAN points, such as Ferihegy airport and Vörösmarty Square in the city center. Matáv and T-Mobile plan to set up more WLAN points in the future and will start offering commercial WLAN services from the spring of next year. (Econews; Nv 5, MH 9) Investors buy out stake in forestry company Erdért Erdért Befektetési owned by György Nagy, former head of Hungarian investment giant Wallis, and Ferenc Kedves, managing director of PET Hungária Kft, has purchased an 89.05% stake in forestry and wood processing company Erdért Rt for an undisclosed price. Erdért Befektetesi purchased the stake from Erdert's employees and small investors, who still retain some of the company. Erdért recorded net sales revenue of Ft 11.968 billion in 2002 and Ft 12.125 billion in 2003. The company projects net sales of Ft 12.854 billion in 2004. (Econews; MH 10, Nb 17) Construction company fined The Budapest City Court upheld a Competition Office (GVH) judgment that had imposed an additional Ft 112 million fine on Austrian-owned Strabag Rt in May for hindering justice in a high-profile price-fixing case which ended with a combined Ft 7 billion fine for five highway construction companies including Strabag. The latter is to pay a supplementary fine for failing to produce the original copy of a document that could have been used as evidence of the illegal agreement. In daily broadsheet Magyar Hírlap's information, the Competition Office has turned down the cartel members' appeal for an exemption from the hefty penalties until a higher-level court decision is passed down. (MH 1) P.P. Wizz takes off Only three months after becoming operational, Hungarian-based Wizz Air Kft became the most popular no-frills airline offering flights from Ferihegy International Airport, with 37,000 passengers flying from/to Budapest in August. The company accounted for nearly one third of the airport's 121,000 budget passengers in the same month, during which conventional carriers reported 740,000 flyers, according to airport operator Budapest Airport Rt. In August Wizz Air also became the leading discount airline in Poland and celebrated its 100,000th passenger internationally. (MH 10) P.P. Diners lose appetite Apart from popular high-end Budapest restaurants, which managed to increase their income by 10%, Hungary's catering outlets saw their revenues slide by an average of 13% in Jan-Aug compared to the same period last year, according to a poll by the Caterers' Trade Association. In regional terms, Budapest catering suffered the least with revenues falling 11% on average, while at the other end of the scale the drop was 26% in southwestern Hungary. The industry's flagging performance can largely be put down to the unusually cool weather in the summer months and lower tourist numbers. (Vg 11) S.F.

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A new bill currently in the legislative pipeline proposes a Ft 100,000 tax break cap on individual insurance policies and stipulates an annual Ft 6 million personal income limit in the eligibility criteria. Last year 1 million middle-class Hungarians deducted a total of Ft 17 billion from their taxes based on insurance policies. They would not be significantly affected by the changes, but imposing new restrictions goes against European guidelines of promoting self-sufficiency, Secretary General of the Association of Hungarian Insurance Companies (MaBiSz) said. Those who lose eligibility for a tax allowance might prefer foreign insurance companies, he added. (MH 10) P.P. Textile maker sags Lurotex Kft, the ailing textile manufacturer, said it will lay off another 100 staff (half of its total workforce) and close down one of its plants in the months ahead in an effort to recoup massive losses caused by low demand and cutthroat competition. Based in Szentgotthárd, western Hungary, Lurotex was forced to cut 100 jobs and sent 270 workers on vacation for a month last year. The textile maker posted losses of Ft 150 million on Ft 2.5 billion in sales in 2002. (Vg 12) S.F. ÁPV invites new bids for agribusinesses The State Privatization and Holding Company (ÁPV Rt) has again advertised the sale of four agriculture companies - Alcsiszigeti Mezogazdasági Rt, Komáromi Mezogazdasági Termelo es Szolgáltató Rt, Bácsalmási Agráripari Rt and Tokaj Kereskedoház Rt, ÁPV announced yesterday. ÁPV is looking for other Hungarian agribusinesses to buy the companies. Price, a capital raise, and the buyer's clients will be the major factors in the evaluation of the bids, but ÁPV will also consider any buyer's plans to integrate the companies' labor, suppliers and customers. The deadline for bidding for the four companies is November 4, 2004. (Econews; MH 2) Hungary sells Ft 25 bln of bills due Hungary sold Ft 25 billion ($125 million) more of its Treasury bills due on Dec. 8 at an average yield of 11.01%, the Debt Management Agency ÁKK Rt said. The maximum yield was 11.03% and the minimum 10.80%. Bills with similar maturity also were sold to yield 11.01% last week. The agency received 96 bids worth Ft 56.3 billion and accepted 61 of them. Hungary first sold Ft 40 billion of the same three-month bills to yield 10.96% on Sept. 7. The yield on three-month bills, the shortest maturity included in Hungary's benchmark debt securities, was 10.82% on Friday on the secondary market. (Bloomberg; MH 13) Hungary to close gap with EU By 2020, Hungary could reach 78% of the old EU members' average GDP per capita level as against today's roughly 50%, market researcher Ecostat said in a fresh report. According to Ecostat's estimates, the real benefits of EU membership will kick in from 2007, boosting Hungary's GDP growth to as high as 5.2% by 2010, and keeping it at a steady 4.5% for the next decade. The budget gap could narrow to 3% in the next 3 years and disappear altogether by 2020. The government debt to GDP ratio will contract from 60% to 40% in the next decade and a half, while FDI levels could to stay in the region of Euro 3-3.5 million per annum. (Vg 4) S.F.

Economics
Ecostat puts Q3 GDP growth near to 4% Economic research institute Ecostat in its September prognosis put the yr/yr growth of Hungary's GDP close to 4% in Q2 after a 4% increase in Q1 2004. Exports and investments continue to fuel growth, but Ecostat noted that household consumption has also risen faster than expected, which will damage the trade balance. Personal consumption rose by 4.7% yr/yr in Q2 and is growing faster despite the fact that real net wages rose by only 0.3% in the first half of the year. A rise in additional income on top of base salaries may also have boosted consumption, Ecostat notes. Ecostat says that the Finance Ministry's new general government deficit target for the year of 5.1-5.3%, compared to the earlier 4.6%, seems achievable. (Econews)

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Politics
Gov't parties on anti-privatization motion An initiative by the main opposition Fidesz party for a referendum to halt privatization elicited sharp comments from the government parties in Parliament on Monday. "Privatization will be continued in a controlled manner," said Gábor Kuncze, the parliamentary group leader of the junior coalition partner Alliance of Free Democrats (SzDSz). Prime Minister Ferenc Gyurcsány said that while Fidesz was demanding a halt to privatization, it might as well take the next step and "propose nationalization" too. Fidesz MP Zoltán Pokorni said Hungary had ended the age of privatization, which had fulfilled its historical mission. (MTI; Nb 1, Vg 1, MH 1, Nv 1) Democratic Forum for privatization The leader of the junior opposition party MDF does not back senior partner Fidesz' initiative yesterday to hold a referendum aimed at halting privatization. Ibolya Dávid said yesterday afternoon that as head of a conservative party she believed in private ownership and rejected all forms of collectivism or socialism. "This initiative puts Fidesz onto the same platform as the (communist) Workers' Party, demanding a stop to privatization today, and possibly fighting to abolish all private property tomorrow," Dávid said. The real privatization issues, she said, concerned what should be privatized and where the income was used. (MTI; Nb 1, MH 1, Nv 8)

Domestic
First Lady opens new British International School First Lady Dalma Mádl, wife of President Ferenc Mádl, officially opened the new building of Budapest's British International School (BIS), MTI reported yesterday. Mádl himself sent a letter to mark the occasion, read aloud by British Ambassador to Budapest John Nichols. The president wrote that the multi-ethnic BIS was a spot of color in Budapest academic life. Nichols said that building the new school had exemplified the kind of cooperation that will be needed by tomorrow's Europe. BIS was opened in Budapest in 1992. (MTI; MH 5) No smoking The Association of Tobacco Producers (MDSz) is spending Ft 30 million this year on a campaign to prevent under-age smoking, according to unnamed sources. MDSZ, in association with the Educational Ministry, the Economic Ministry and the Consumer Protection Office is attempting to reduce the amount of cigarettes retailers sell to underage consumers. As a result of the campaign, the ratio of retailers serving tobacco to children under 18 decreased from 50% to 10% this year. (NG 5) R.G. Mother and kidnapped daughter return from Turkey A Hungarian mother and her three-year-old daughter, kidnapped by the child's Turkish father, have returned to Hungary after a Turkish court nullified an earlier prosecution ruling, said a Foreign Ministry press release issued yesterday. "Emese Raskó and three-year-old Szofi returned to Budapest on Saturday," Foreign Ministry spokesman Viktor Polgár wrote. Szofi Raskó was taken to Turkey by her father, Fatih Ozbas, a former wrestler and European Championships participant, in January without the consent or knowledge of the mother. It is suspected that he used a forged German passport for the child. The mother traveled to Ankara this March to find her daughter, where the father confiscated both Emese's and Szofi's Hungarian passports. Emese had been trying to leave Ankara with Szofi since August with temporary documents supplied by the Hungarian consul. (MTI)

Stockwatch
BUX index: BUX Close: 12,666.16 Change: +136.35 (1.09%) Stock Closing price Daily change (%) Average price Volume MOL 9,840 2 9,796 205,038 Matáv 830 1.5 826 1,736,333 OTP 4,487 1.1 4,482 438,003 Richter 23,605 0 23,711 18,495 Egis 9,750 0 9,721 30,488

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Exchange
In forints, Oct 5, 2004 FIXED MIDDLE RATE EUR USD GBP CAD CHF JPY CZK PLN 1 247,02 1 200,52 1 360,27 1 157,67 1 159,03 100 180,99 1 7,81 1 56,34

Weather
Tomorrow: p/cloudy High 23°C (73°F) Low 12°C (54°F)

06/10/2004
Business
Pig farming loss-making business Hungary's pig farmers expect to remain in the red this year after racking up around Ft 8 billion in losses last year, Secretary of the Hungarian Farmers' Association István Tóth said on Tuesday. The number of pigs sold for slaughter fell from 80,000 a week in Q2 to 65,000 in Q3. The average farm gate price for live hogs was Ft 258 per kilogram, with a Ft 20-per-kilogram subsidy going to farmers whose pigs meet special EU regulations. But the price is still well under the Ft 301-per-kilogramme cost of raising pigs. (Econews; NG 1, Vg 5) PSzÁF fines Erste Bank Hungary's financial market regulator PSzÁF announced it has imposed a Ft 1 million fine on Erste Bank Befektetési Rt for exercising unfair influence on share prices. PSzÁF also fined the broker who made the transactions Ft 200,000 and struck his name from the list of brokers for five years. An audit by PSzÁF found that one of Erste Bank Befektetési's brokers had exercised unfair influence on the share price of BorsodChem Rt shares by making eight cross-trades between May 30 and June 17, 2003. BorsodChem shares were stagnating or moderately rising prior to the transactions, which then resulted in sharp increases. (Econews; NG 12, Vg 18) Strabag cement site not concrete Three new possible sites are being considered by construction company Strabag Rt for its upcoming Ft 27 billion cement factory project, which suffered a setback in early August after the residents of Bükkösd, southern Hungary, voted against the plan. All the three target sites have been picked in the neighboring area, where Strabag believes residents would be more willing to support the investment. A final decision on the location is expected within a month, Ottó Zimmerman, the project's PR manager said. (NG 1) S.F. IT company Kürt plans to expand Data security and recovery company Kürt Computer Rendszerház Rt is in talks about setting up subsidiaries in Asia and America, owner and CEO Sándor Kürti announced on Tuesday. Kürt had pre-tax profit of Ft 100 million on revenue of Ft 1 billion in 2003, and the firm expects revenue to exceed Ft 1 billion in 2004. Secure data services account for around half of Kürt's revenue, with consulting services generating 25% and data recovery services for 15%. 18% of Kürt's data recovery business comes from big companies and the government. Mr Kürti said that Kurt needed to draw in capital in order to expand in line with demand. (Econews; Vg 1)

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Around 85.2% of the assets of banking giant OTP Rt were in its Hungarian subsidiaries at the end of June, according to the bank's detailed consolidated IFRS unaudited report for H1 2004. These subsidiaries generate most of the bank's revenue and account for most of its expenditures too. The OTP group had 813 branches at the end of June, including 430 in Hungary, 323 in Bulgaria and 60 in Slovakia, employing a total of 16,950 people. Additionally, OTP purchased a small Romanian bank at the end of July, and is currently screening the Serbian bank Jubanka. (Econews; MH 13) Micro loans fall short Over Ft 5 billion remained unspent in the National Micro Loan Fund since the beginning of this year. The total sum of loans granted is just over Ft 1 billion. The failure is due to the conditions of the program being too strict, Világgazdaság reported. The loan has a maximum value of Ft 3 million, not enough even for small enterprises, and should be raised to at least Ft 5 million-Ft 6 million, experts say. However, terms can only be changed after EU's audit, which will be completed around November-December. (Vg 1 ) G.R. Bratislava-B'pest exchange cooperation As of December, players of the Slovak commodity exchange, the Komoditná Burza (KBB) Bratislava will be able to trade in crop futures at the Budapest Commodity Exchange (BÁT), as laid down in the contract signed by the two parties yesterday. The cooperation is hoped to bolster the exchanges' market position in the EU and tap into the structural similarities between the two Central-European commodity markets. KBB generated turnover of korona 304 million in H1. (NG 11) S.F. Poland's clearing house opens KELER account Poland's central depository and clearing house KDPW opened a securities account with Hungary's central depository KELER Rt on Oct. 4. KELER announced yesterday that by signing the contract, the two institutions had agreed on the technical conditions enabling Hungarian issuers to appear on the Warsaw Stock Exchange. BorsodChem Rt will be the first Hungarian firm to list its shares on the Polish bourse, from Friday. MOL Rt has also taken the first steps toward a listing, registering as a public company in Poland on September 24. (Econews; MH 10) Sony to produce DVD player-recorders in Gödöllo Japanese electronics giant Sony plans to make 320,000 DVD player-recorders at its plant in Gödöllo, next year, MTI reported from Tokyo on Tuesday citing local press reports. The plant, which just started production of the devices in September, will produce 170,000 DVD player-recorders yet this year. The Gödöllo plant was set up in 1996 and, following a Ft 100 million investment, began making DVD players in 2001. Gradually, the plant's production will be switched over to only DVD player-recorders, the report said. (Econews; MH 11, Vg 16) TV2 revenue up TV2 Rt, Hungary's second largest commercial TV channel, saw its revenues jumping more than 10% to Ft 2.57 billion in July-Aug yr/yr. The company's advertisement takings were up 13.5% and 10.6% in July and August respectively. This was due to a growing advertising market and TV2's enhanced ad sales strategy, which has increasingly relied on alternative advertising media, like text messages and the word wide web. (NG 7) S.F. Water pipelines to be replaced The Budapest Waterworks Rt will spend this year a record Ft 3.3 billion on upgrading old water pipelines in the capital, double the amount of 2003, the company said in a statement. By the end of October, 50 km of rusty pipelines will have been replaced by new ones, while another 20 km is set to go down by the end of the year. Budapest's obsolete water pipeline network is notorious for major bursts, which occur almost daily. (NG 5) S.F. RWE name change

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RWE Umwelt Hungary Kft has been renamed AVE Hungary Kft, general manager József Hartdégen said. Hungary's largest waste management company was bought by Austrian Energie AG Oberösterreich for Euro 11.2 million from German RWE group in May. AVE Hungary Kft has majority share in RWE Umwelt Miskolc Kft, RWE Umwelt Tatabánya Kft and AKSD Kft and minority share in Kaposvár Town Management Kft. The company group employs over 700 people and its turnover was Ft 4,84 billion last year. (Vg 6) G.R. 44 Hungarian companies at Bucharest fair A capital goods fair opened in Bucharest yesterday and was attended by 44 Hungarian companies occupying nearly 700 sqm. János Halász, who represents Investment and Trade Development Hungary (ITD Hungary) in Romania told a press conference that participants included small and medium enterprises as well as major manufacturers. Trade turnover between the two countries may reach a new record of $2 billion this year, Halász said, adding that currently 4,700 Hungarian companies were active in Romania, with an overall FDI value of $600m-670m, focusing on both Bucharest and the regions close to the Hungarian border. Top areas are the processing industry, IT, infrastructure, real estate, the automotive industry, textiles, and tourism. (MTI)

Economics
GDP growth prediction, rising consumption Market research firm Kopint-Datorg Rt stayed with its June prediction of a 4% GDP increment in 2004 but upped its personal consumption growth forecast to 2.9% from 2.4% in a report publicized yesterday. It also predicted that the public-sector deficit would amount to 5.5% of GDP in 2004 (compared to the 4.9% it had predicted in June), calculated according to the European System of Accounts (ESA), the report says. It forecast a 4.8% of GDP deficit for 2005. Kopint-Datorg set its estimate for 2004 inflation at 6.9%, up from its June figure of 6.8%, and stayed with its 4.6% inflation prediction for 2005. (MTI; NG 3, Nv 5, MH 9) Hungary's borrowing costs drop at auction Hungary's borrowing costs fell at a sale of Ft 30 billion of three-month bills. The securities were sold at an average yield of 10.86%, 10 basis points less than at a sale a week ago, the State Debt Management Rt (ÁKK) said on its Bloomberg page. A basis point is 0.01 percentage point. The average yield was 2 basis points higher than that on similar securities on the secondary market yesterday. The maximum yield at today's auction was 10.87% and the minimum 10.80%. The agency received 159 bids worth Ft 105.6 billion and accepted 73 of them. (Bloomberg; NG 1, MH 13)

Politics
Parliament authorizes signing of EU Constitution Both the government coalition (MSzP and SzDSz) and the opposition (Fidesz and MDF) voiced support for a bill in parliament which would authorize the government to sign the European Constitution, MTI reported on Tuesday. In a keynote speech to the Parliamentary debate on the issue András Bársony, secretary of state at the Foreign Ministry said the treaty would be signed in Rome on October 29 by Prime Minister Ferenc Gyurcsány and Foreign Minister László Kovacs. (MTI; Nv 3) Tone of Hungarian politics "too sharp" Ambassadors of the EU and NATO accredited to Hungary told Prime Minister Ferenc Gyurcsány they find the tone of Hungarian home politics "too sharp". "The ambassadors were slightly disappointed over the sharp tone that occasionally characterizes Hungarian politics, saying that this is unusual in Europe," Prime Minister Gyurcsány said after the meeting, held in the Parliament building yesterday. Gyurcsány said this tone can be changed with "patience, a great deal of calm and with due understanding shown for the efforts of the social groups behind the parties." "The ambassadors consider the economic growth in Hungary to be impressive," the prime minister added. (MTI; MH 6) CoE warns Serbia over ethnic violence in Vojvodina The Council of Europe's Parliamentary Assembly has warned Serbia over the anti-Hungarian attacks committed in the Vojvodina region. In a resolution adopted at its meeting in Strasbourg yesterday, the assembly urged the Belgrade government to fully investigate the ethnically motivated incidents, punish the perpetrators and

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strengthen dialogue with the minorities' representatives. The CoE Parliamentary Assembly reviewed a report on the Serbian situation yesterday, including the issue of ethnic tensions in Vojvodina. The part of the report concerning Vojvodina was more strongly worded than the original document due to proposals by some Hungarian deputies. (MTI; MH 7)

Domestic
FinMin wants cooperat'n with Slovakian customs Hungary has called for a closer cooperation with Slovakian customs authorities to combat the flow of cheap goods brought by private individuals, evading excise duties, from Ukraine and Romania through Slovakia into Hungary, the Finance Ministry announced yesterday. Finance Minister Tibor Draskovics has written a letter to his Slovakian counterpart Ivan Miklos on the matter. Finance Ministry spokesman Ferenc Pichler said Hungary expected to fall Ft 90 billion short of its VAT target set at the start of the year, partly because of the sale of cheap products from Romania and Ukraine. (MTI Econews; Vg 5) Outpatient privatization plan The Health Ministry is planning to offer Ft 25 billion in low-cost credit through commercial banks to assist healthcare employees interested in buying outpatient facilities. The ministry is to launch its Employee Share Option Program next year in hopes that employee ownership could become dominant in the sector in three to four years. An opportunity for medical workers to acquire ownership in clinics will mark a new era in Hungarian healthcare, but some of the financial aspects of the plan require clarification, said Dr Imre Varga, President of the Medicina 2000 Polyclinic and Outpatient Care Association. (Nv 4) P.P. Dialysis treatment feels the pinch Dialysis centers have warned that scarce funding is jeopardizing adequate care of their patients. The number of kidney failure patients requiring dialysis is growing by an annual rate of 8% in Hungary, but funds earmarked by the National Health Administration Fund (OEP) for 2005 are only 1.5% higher than this year, President of the Hungarian Nephrology Association Sándor Túri said. The euro 89 paid by OEP to private and non-profit clinics per dialysis treatment is the lowest among EU members and the rest of Europe. Kidney transplants, which offer a long-term solution to the problem, are performed at state-of-the-art level in Hungary, but only 300 surgeries take place each year due to a shortage of donors. (MH 5) P.P. Power producers seek higher emissions Hungarian electricity generators, such as the power plants of Aare-Tessin AG für Elektrizitat and AES Corp, are asking the government to increase the allowances for carbon dioxide emissions they have been given as the country prepares to join a EU emissions-trading program. The government will discuss the requests companies made last week, when they received a draft plan for allocating the allowances. Hungary handed out 29.4 million metric tons of allowances credits, worth as much as euro 250 million ($309 million), including 15.8 million tons to energy producers. That was about 2 million tons less than the companies expected. The allowances in effect are licenses to emit carbon dioxide. (Bloomberg; NG 1) Gov't spending on water Ft 129.3 billion was spent on National Environmental Program from the state budget in 2003, report of Environmental and Water Ministry says, about 55.5% of the sum originally planned. Ft 51.9 billion was dished out for water protection, of which Ft 37.8 billion on wastewater management. Ft 19.2 billion went on environmental safety, Ft 14.9 billion on improving quality of environment in towns and Ft 8.2 billion in rural areas. This last figure is less than 20% of the originally planned sum. The most successful area of the program was the shaping of environmental regulation to comply with EU norms. (Vg 7) G.R. Action against dialing viruses Eighteen Hungarian telephone service providers agreed with the National Telecommunications Authority (NHH) yesterday not to connect expensive international calls automatically while using internet. This will help protect the clients from giant telephone bills due to viruses dialing overseas numbers. Although such programs have appeared in Western Europe in Hungary they have as yet caused less damage. However, providers were spurred

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to action by phone bills of several million forints. The companies compile a list of numbers dialed by viruses, and instead of connecting them automatically, ask the client first. (Nb 16) G.R. No to airport devlp't Life in Szigethalom will become unbearable if the government approves the State Privatization and Holding Rt's (ÁPV) proposal to upgrade a former military airfield in nearby Tököl into an international airport for low-cost carriers, said Mayor László Fáki, speaking for the 14,000 local residents. Concerned about increased noise and pollution levels, Szigethalom, a satellite town south of Budapest, is determined to go into battle against ÁPV over their plan to license the 470-hectare airbase as a public civil aviation facility, the Mayor said. (Nv 16) P.P.

Stockwatch
BUX index: BUX Close: 12824.87 Change: +158.71 (1.25%) Stock Closing price Daily change (%) Average price Volume MOL 9,985 1.5 9,912 31,308 Matáv 838 1 837 2,504,560 OTP 4,505 0.4 4,528 1,069,752 Richter 24,100 2.1 24,038 66,937 Egis 9,780 0.3 9,762 31,468 Antenna 3,810 -0.9 3,820 13,594 TVK 4,600 3.4 4,563 19,933 Rába 660 0 654 2,754 Budapest Stock Exchange, Oct 6

Exchange
In forints, Oct 6, 2004 National Bank of Hungary Fixed Middle Rate EUR 1 245,74 USD 1 200,07 GBP 1 356,82 CAD 1 157,14 CHF 1 158,23 JPY 100 180,36 CZK 1 7,83 PLN 1 56,87

Weather
Tomorrow: p/cloudy High 21°C (70°F) Low 9°C (49°F)

07/10/2004
Business
AgMin seeks extra storage due to bumper harvest The Agricultural Ministry is looking for extra storage because of the record grain growth this year, announced Fülop Benedek, public administration state secretary of the Ministry. The Defense Ministry has offered space approximately 35,000 - 40,000 sq meters, but only 13-15% of that was found appropriate for grain storage by Concordia Rt and the Agriculture and Rural Development Office. Without ample storage space at hand a part of corn grown this year might be stored on the ground covered by foil, Benedek added. (Vg 1) R.G. László Némethy named new AmCham chairman CEO of consultancy Euro-Phoenix Kft László Nemethy was elected chairman of the American Chamber of Commerce (AmCham) in Hungary at a general meeting to mark its 15th anniversary, AmCham said on Monday. Nemethy replaces Péter Hegedus, managing director of ABB. Nemethy said AmCham's goal remains to improve the Hungarian business environment and boost the competitiveness of Hungarian markets. (Econews; Vg 4, Nv 5) Sale of VCP's BorsodChem stake completed The sale of a 62.6% stake in chemicals company BorsodChem Rt by Vienna Capital Partners has been completed, BorsodChem announced late yesterday. The value of the stake on offer was Ft 88.245 billion, 15

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excluding an over-allotment option of 4 million shares held by the sale's organizer HSBC. As a result of the sale, VCP's stake in BorsodChem was reduced to 23%, and no other individual investor has more than 5%. The sale's price valued BorsodChem to Ft 140.93 billion. (Econews; Vg 17, Nb 16) Matáv's signs with T-Com and T-Mobile Telco Matáv Rt said yesterday that it will soon sign a cooperation agreement with two other Deutsche Telekom group members, T-Com and T-Mobile International. The agreement will come into effect from the start of next year. T-Com, which provides fixed-network products and services, will share its development, marketing and strategic expertise to assist Matáv with its fixed-line services, and T-Mobil International will assist Matáv's mobile services subsidiary T-Mobile. The partnerships will build on the companies' synergies, but will not in any way affect Matáv's ownership structure, its company charter or its boards, according to the statement. (Econews; Ng 12) Dorotheum buys Orex jewellery stores Austrian auction house and jewelry seller Dorotheum has bought Hungarian jewelry retail chain Orex Rt for Euro 4 million. Orex shareholders approved a Ft 715 million capital raise in the company, and Dorotheum owner Onetwo Beteiligungs GmbH will acquire the newly issued shares. Buying the shares is the condition to Dorotheum acquiring Hungarian Investment and Asset Management (MBV) Orex stake. After the capital increase OneTwo Beteiligungs will hold a 75% stake in Orex. The Orex shares will be issued at their nominal value of Ft 4,600. The capital will be used to finance current assets and developments. After the transaction is closed Dorotheum is to make an offer on the remaining Orex shares at the price agreed on in the deal with MBV. The price has not been made public. (Econews; Vg 13) No punitive U.S. tariffs for Hungaricum Unique Hungarian products, such as Tokay wines and paprika which carry the "Hungaricum" designation, are not on the list of products the U.S. had threatened to place punitive tariffs on from November 1, the Ministry of Foreign Affairs said yesterday. The European Commission and the U.S. have agreed to extend negotiations on tariffs by six months, and the EU has moved back the date for introducing the tariffs until the end of the talks. The U.S. had threatened to put the tariffs in place because of the effects EU expansion had had on the U.S. markets. (Econews; Vg 5, MH 10) CytRx purchases assets of Biorex Los Angeles-based pharmaceutical company CytRx announced that it has purchased assets of Veszprém-based pharmaceutical research company Biorex Research and Development Rt for USD 3 million. The company, which currently employs 100 people, was founded in 1988. British and US owners raised the company's registered capital by USD 4.75 million in 1997. US pharmaceutical Abbott Laboratories also bought stakes in the company the same year. (Vg 13) R.G. Magyar Posta's Ft 5.1 bln pre-tax profit Magyar Posta Rt will probably reach a Ft 5.1 billion pre-tax profit in 2004, which is Ft 3 billion higher than projected before, CEO Pál Szabó told Hungarian News Agency MTI. Magyar Posta's net revenue will be Ft 155 billion this year, which is Ft 15 billion more than in 2003, Szabó said. This year only 650 employees have been or will be let go from Magyar Posta, Szabó said, but the professional trade unions say this number may be as high as 3,000. (Ng 4) M.K. Pick to dismiss 198 instead of 450 Meat processor Pick Szeged Rt will dismiss only 198 people instead of the planned 450, Hungarian Radio reported. Pick could find other positions within the company for 200 people and 50 others can not be dismissed for legal reasons that have not been revealed. Pick announced the dismissals, when the company stopped its own pig breeding branch earlier this year. (Ng 4) M.K. Premier outlets center to open Raiffaisen bank Rt's real estate arm and Miller Developments will open a Euro 25 million outlet mall, called Premier Outlets Center, outside Budapest on November 11, Raiffeisen's Jozsef Takács and Miller's David Carver said yesterday. Both of the companies own half of the project. The 13,000sqm outlet mall is located on a 7hectare lot in Biátorbágy and comprises 46 retail units, of which 28 have now been leased to, among others, Levi's, Adidas, Nike, Tom Tailor, Camel Active and Mexx, for 5 to 10 years. The leases for a further 18 stores are under negotiation, and nine of the interested companies have already signed preliminary contracts. (Econews: Ng 4, MH 10, Vg 13) Lidl to open next week German food retailer Lidl plans to open its network of shops in Hungary in the middle of October, according to unnamed sources. Lidl is constructing 1,600-2,000 sq.m. stores in 12 towns in Hungary, these will be opened at the same time. Lidl's Hungarian subsidiary has recently opened its 30,000 sq.m. logistics center in Székesfehérvár. Lidl announced last year to open a chain with 30 shops in Hungary within two years. (Ng 5) M.K.

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MOL eyes North Africa with INA Hungary's major oil and gas company MOL Rt will join forces with Croatian peer INA to examine exploration and production in north Africa, MOL's Chief Strategy Officer Michel-Marc Delcommune told Reuters at an investor conference in Austria yesterday. "INA is active in Syria and Egypt and together we are looking at Libya and Algeria," Mr. Delcommune told Reuters. When asked whether MOL was interested in acquiring exploration licences in Libya he said MOL was looking at such possibilities and it could take one-two years to close a deal. MOL holds a 25% stake in Croatian oil company INA. (Econews; Ng 11) Semilab buys SemiTest stocks and tech. Hungarian-owned semi-conductor production company Semilab Rt has purchased the stocks and technology of American SemiTest Inc., according to press information. Semilab plans to sell its products in the U.S. and in Asia. Semilab did not disclose the value of the transaction. Previously Semilab used to be owned by Videoton Holding Rt and Flexpert Technical Consulting Kft, but Semilab did not reveal its present owners. (Ng 5) M.K. Wind power park to be built in Bakony Irish SWS and Fleming Construction Ltd plans to build a wind power park in the Bakony mountains, near Veszprém, west Hungary, Veszprém local council confirmed. The Irish investors established Euro Green Energy Kft some months ago to carry out the euro100 million construction. The produced energy will be sold to local power grid operators. The wind power plant will employ 50 people and will supply energy for 50,000 households. (Ng 5) M.K. Magyar Posta calls car fleet tender Magyar Posta Rt has announced a public procurement tender for the long-term rental of 190 cars and the fleet management of the company's vehicles. Bidders must own 165 medium-size cars and 25 vans and participants are allowed to make consortia. Bidders with a reliable fleet management background will be preferred, as they must have one-year fleet management experience in the previous three years and also have an ISO quality certificate. (Ng 10) M.K. Pannonplast expects losses of Ft 1 bln Pannonplast Rt's recently appointed chairman Balázs Bokorovics made statements yesterday suggesting that the company would end the year with net losses of Ft 1 billion or more, but would also have financial profits of Ft 450 million or more in the second half. The company issued a profit warning in August saying it expected to finish 2004 with losses of Ft 1 billion. Bokorovics said that he was "moderately pessimistic" about the figure. The financial profits will come from the sale of Pannoplast assets, already under way, part of a mid-term reorganization program launched by the company's old management in the spring. A group of shareholders, led by István Torocskei, made replacements to the (Econews; Ng 12)

Economics
ESA gen gov't deficit target set The 2005 budget proposal set an ESA'95 general government deficit target, including local governments, of Ft 1,046.7 billion, MTI Econews reported based on Finance Ministry information. The ESA deficit figure corresponds to 4.7% of next year's nominal GDP, projected at Ft 22,250 billion in the budget calculations. Including the position of local councils, this year's ESA deficit target was revised upwards, from 4.7% to 5-5.3% of the GDP in Sept. The GFS general government deficit target is Ft 1,033.1 billion for 2005. This year's GFS deficit target, excluding local councils, was upped from Ft 1,184.7 billion (5.8%) to Ft 1,335.1 billion in Sept. (Econews; Nv 1, MH 1,9) Budget: real wages to rise 3-4% in 2005 Prime Minister Ferenc Gyurcsány stated that the draft budget forecasts a 3-4% rise in real wages next year. Gyurcsány told reporters after a cabinet session yesterday this will bring the rise in real wages to 30% during the four-year government cycle. He said the real value of pensions rose by 17% in 2002-2003, and will rise by a further 24% in 2004-2005, under the draft. "We shall spend Ft 2,085 billion on pensions next year, 53% more than planned by the previous government in 2002," the prime minister said. (MTI; Nv 5, MH 1,9) Gyurcsány promises fair taxation in 2005 The aim of the 2005 Budget is to make taxation more fair, Prime Minister Ferenc Gyurcsány said at the press conference after the cabinet meeting yesterday. Gyurcsány said the government aimed to make tax burdens on families with children more just, and improve the chances of young people buying their first homes. Gyurcsány said the budget allocates Ft 217 billion for home loan subsidies, and added that home buyers would be able to get government subsidized home loans with a down payment of as little as 10% in 2005. (Econews; Nv 1, 5 MH 1,9) Ft 1,052 billion invested in SMEs State-owned SME development agency KVFP has pumped Ft 1.052 billion into businesses so far this year, CEO Krisztina Arato and chairman Viktor Deri said yesterday. KVFP has already decided to invest a further Ft 384 million in five other businesses, and four investments worth Ft 315 million are under preparation. KVFP plans to

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make investments totaling Ft 1.9 billion by the end of the year. KVFP introduced a new, simplified product in August, which requires less data from applicants than normal capital investments. (Econews; Vg 4) Sept fiscal deficit Ft 91.8 bln Hungary's fiscal deficit was Ft 91.8 billion in September, bringing the nine-month deficit to Ft1.284 trillion, according to the preliminary Finance Ministry report published late yesterday. The fiscal deficit was Ft 120 billion in August. The September deficit, calculated according to GSF, is well over the ministry's forecast of Ft 85.6 billion, as is the nine-month deficit, compared to the Ministry's forecast of Ft 1,277.9 billion. The Ministry recently named a new deficit target of Ft 1,335.1 billion for the year, upping its target in terms of GDP from 5.8% to 6.5%. The nine-month preliminary deficit is already equivalent to 6.25% of this year's estimated GDP. (Econews; MH 9)

Politics
New Bp Admin head sees conflict of interest It is a conflict of interest for Budapest Mayor Gábor Demszky to simultaneously hold an office as MEP, according to newly appointed head of the Budapest Public Administration Office Imre Forgács, who may elect to take legal action in a few days. The fact that Forgács seconds the opinion of his predecessor László Felkai comes as a surprise, as the political motive behind latter's sudden and unexplained loss of favor with then-Prime-Ministerdesignate Ferenc Gyurcsány may have been to protect Demszky's position, opposition members of the Budapest Assembly suggested. Meanwhile, Free Democrat Demszky is losing popularity within its own party, unnamed sources claimed. Sensitive issues include a Ft 20 million windfall for BKV Rt CEO Botond Aba while the public transport company is staggering under a Ft 43 billion debt, lack of progress and Ft 1.3 billion overspending in the Metro 4 project, the tram tender fiasco of picking the most expensive products that were all faulty, and Demszky's penchant for perquisites such as cheap SUV rental from a municipally-owned company. (MH 2) P.P. Medgyessy to become roving ambassador Former Prime Minister Péter Medgyessy will become Hungary's roving ambassador, under a cabinet decision yesterday, the government spokesperson told reporters. Boglár László, speaking after the first session of Prime Minister Ferenc Gyurcsány cabinet, said the former premier will be in contact with international participants of economic life, for instance, in OECD and the EU institutions, and with scientific and professional organizations. She said the government has asked the ministers dealing with EU affairs to also involve Medgyessy in their work. (MTI; Nv 3) New gov't spokespeople named Prime Minister Ferenc Gyurcsány introduced newly appointed government spokeswoman Boglár László and spokesman András Batiz after the new government's first Wednesday cabinet meeting. László has worked as communications director at the Hungarian Development Bank (MFB) Rt for the past two years, and previously worked in broadcasting. Batiz presented commercial television channel RTL-Klub's Fokusz program. (Econews; Vg 5)

Domestic
PM congratulates Hungarian Nobel winner Prime Minister Ferenc Gyurcsány yesterday congratulated Avram Hershko, born Ferenc Hersko in Hungary, on being awarded the Nobel Prize in Chemistry in 2004, thus becoming the 14th Hungarian winner of the prize. The prime minister, referring to a telephone conversation with Hershko at a press briefing after the cabinet session, said Ferenc Hersko was born in Karcag in 1937 and has preserved his Hungarian roots both in his name and as a language. The scientist's family left Hungary in 1950. The Royal Swedish Academy of Sciences awarded the Nobel Prize in Chemistry for 2004 jointly to two Israelis -- Avram Hershko and Aaron Ciechanover -- and an American, Irwin Rose, "for the discovery of ubiquitin-mediated protein degradation", their work related to how the human body singles out unwanted proteins for destruction to defend itself from disease. Avram Hershko lives in Haifa, Israel and works at Technion - Israel Institute of Technology. (MTI; MH 1,20, Nv 12)

Stockwatch
BUX index: BUX Close: 12799.04 Change: (-25.83; -0.20%) Stock Closing price Daily change (%) Average price Volume MOL 10,190 2.1 10,026 355,350 Matáv 815 -2.7 819 1,460,189 OTP 4,470 -0.8 4,480 518,375 Richter 23,995 -0.4 23,879 40,408 Egis 9,870 0.9 9,818 45,876 Antenna 3,830 0.5 3,846 34,043 TVK 4,630 0.7 4,591 7,820 Rába 640 -3 636 14,734

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Exchange
In forints, Oct 7, 2004 Fixed Middle Rate EUR USD GBP CAD CHF JPY CZK PLN 1 1 1 1 1 100 1 1 245,83 200,2 356,44 158,31 158,16 179,89 7,82 57,06

Weather
Tomorrow: rain High 21°C (70°F) Low 12°C (54°F)

08/10/2004
Business
Microsoft picks Hungary for service center Software giant Microsoft has picked Hungary as the site for a new software service center, CEO Steve Ballmer said yesterday. Ballmer cited good business opportunities and qualified labor as the reason for choosing Hungary out of several other countries as the site for the center. The center, which will correct software bugs and weaknesses, will employ 40 people at the start and as many as 300 people within three years, IT and Communications Minister Kálmán Kovács said. (Econews; Nv 5, Ng 5, Vg 16, Nb 16) BUX at world-class record high The BUX index of the Budapest Stock Exchange Rt (BÉT) closed at a new record high of 12,994 points yesterday following a 38.52% gain in 2004. This means that Budapest has been one of the best performing stock markets worldwide this year in close competition with the Vienna bourse, which rose 37.03% since Dec. 31. BUX's spectacular march of progress was primarily driven by OTP Bank Rt and MOL Rt, both of which have gained nearly 70% this year; meanwhile the stock price of Matáv Rt and Richter Rt, the two other blue chips traded at BÉT, stagnated. In addition to BÉT, several other bourses in Central and Eastern Europe outperformed New York (?2%), Frankfurt (1.97%), London (4.8%) and Tokyo (6.35%), including the Bucharest Stock Exchange, which increased by almost 50%. BUX may rise to 13,400 by the end of 2004, but next year will see a more moderate gain of 10%-20%, analysts opined. (Vg 1) P.P. Euro 11 mln for Hungary's wine growers Hungary's grape growers will be eligible for Euro 10.86 million in EU subsidies in the 2004/2005 marketing year more EU subsidies than their wine-growing peers in any of the new EU member states, the European Commission said yesterday. The Commission has approved subsidies totaling Euro 450 million for 14 grapegrowing member states, including 6 new EU members, only slightly more than the Euro 443 million allocated to the EU-15's 8 wine-growing countries last year. (Econews; Nv 5, Vg 3) PSzÁF rejects Amstel's offer for Brau State Financial Institutions Supervision (PSzÁF) rejected the public purchase offer presented by brewery Amstel Rt, a member of the Heineken group, for the buy-out of small investors in Brau Union Hungária Rt. The decision comes after the conclusion of a court case put forward by minority shareholders who attested that the offered price was too low in comparison with the price Amstel paid for the shares of Brau's Austrian parent company Brau Union AG. Analysts say that Amstel will issue a new offer before the upcoming Brau AGM at the end of October, as a result Brau share prices skyrocketed. (MH 11, Vg 18) A.K.

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Bus maker Nabi Rt said yesterday that it would cut 21% of its workforce, or 180 employees, in 2005. The cuts will be made in two phases, the first in January and the second in April. Nabi said as well that it will streamline its product portfolio, but this would not affect ongoing orders. In the future, the company will focus on a smaller number of products. It will also reduce production volume. (Econews; Ng 11, Vg 18) PSzÁF fines Hamilton Ft 3 mln Financial market regulator PSzÁF has imposed a Ft 3 million fine on brokerage Hamilton International Brokerage for breach of regulation on activities and operation, PSzÁF announced in Magyar Tokepiac yesterday. PSzÁF determined that Hamilton's portfolio management and government securities deals were not in compliance with the law. It also found that in certain cases such transactions were made from clients' accounts that fall in the category of financial services requiring PSzÁF's approval, which Hamilton did not possess. (Econews; Ng 12, MH 13,) ÁPV denies rumors of secret privatization plan State Privatization and Holding Rt (ÁPV) issued a statement yesterday denying rumors concerning the upcoming privatization of Hungarian postal services, Magyar Posta Rt and gambling monopoly Szerencsejáték Rt. ÁPV plans Ft 250 - Ft 300 billion revenue from privatizations in 2005, a level similar to 2004 the statement says. ÁPV issued the statement in response to Antal Rogán opposition party Fidesz MP's allegations that ÁPV has a secret business plan for the next two years. (Nv 5) A.K. IT alliance elects new president Ákos Reszler, CEO of IT company Scansoft Recognita Rt was elected president of the Alliance of IT Enterprises, after his predecessor János Kóka was appointed Economy and Transport Minister of the newly formed Gyurcsány government. (MH 10) A.K. Private jet hire in Hungary Netjets, the worlds largest private airways company starts offering its services in Hungary, PR-associate Robert Draniczki said. The American firm is owned by Berkshire Hathaway insurance company. It has 440 business jets in America and 53 in Europe and offers them for rent. The planes are available within ten hours at any airport. The clients can buy pre-paid cards containing a specified amount of hours flown. (NG 1) G.R. Ft 5 bln worth of MKB II bonds for sale Hungarian Foreign Trade Bank Rt (MKB) will hold an open auction for Ft 1 billion worth of its MKB II five-year floating-rate bonds on October 11. MKB has said that it will accept over subscription up to Ft 4 billion. Net minimum price at auction will be 99.99% of nominal value. The bonds, which pay up on September 10, 2009 will carry an annual interest rate of 11.27% (three-month BUBOR +0.25%) for the period between September 10, 2004 and December 10, 2004. (Econews) PSzÁF to take two-pronged approach Hungary's financial market regulator PSzÁF will apply its resources equally to supervising the market as well as to supervising market players, creating two separate divisions within the authority responsible for each area, PSzÁF said yesterday. PSzÁF supervisory board chairman István Farkas said the authority's aim with the change was to include companies which do not hold a license to provide financial services, but do in fact provide them. Over the last several years many Hungarians have lost their savings after putting their money into investment schemes run by just such companies, and have then found legal recourse difficult because the companies - which legally needed no license to provide their services - were outside of PSzÁF's jurisdiction. (Econews) Démász opens Ft 1 bln transformer in Baja

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Regional electricity distributor Démász Rt has opened a Ft 1 billion transformer station in Baja (South Hungary) yesterday. The two 25MVA-stations will ensure an uninterrupted electricity supply for 20,000 of Baja's households, and will also provide enough extra power for the city's industries and its future electric railway, Démász CEO Attila Dervarics said. Dervarics said the transformer would meet the region's growing electricity needs for the next ten years, noting that demand grows 1.5% every year in the region. (Econews) Court gives go ahead for subway construction The Municipal Court of Budapest rejected the lawsuit filed by various civil groups representing residents living along the planned route of the M4 subway line. The civil groups attacked the building permit of the line on the grounds that it does not contain instructions for the minimum distance the line should be away from residential buildings. The groups also disputed the imposition of a Ft 1.7 million proceedings fee. The court decision gives the final go-ahead for the construction of the M4 line. (Nv 4) A.K. Record rise in DVD sales DVD player sales shot up by over 100% in H1 yr/yr from 53,000 to 124,000, a trend mostly due to a 20%-50% drop in prices in the same period. With still only 9% of Hungarian households owning a DVD according to market research company GfK Hungária Rt, vendors are hopeful that the sales will continue to grow at a similar rate. The twofold increase in DVD player sales was paralleled by the number of music DVD's sold in H2, which totaled 218,000. Meanwhile, VHS equipment is becoming less popular, with 52 of 100 households boasting a videotape player last year, down from 55 in 2002. (Vg 1) P.P.

Economics
2005 budget a step toward eurozone Finance Minister Tibor Draskovics called the government's 2005 budget another step towards introducing the euro in 2010, before submitting the budget to the Speaker of the House Katalin Szili. Other priorities of the budget are the creation of new jobs, supporting younger people and families with children, developing infrastructure and making the state thriftier, Draskovics stressed. Draskovics said that the budget would be tight in most areas, but some would in fact be better off, citing a 6% rise in health care spending and a 13% increase in agriculture subsidies to Ft 328 billion, of which half is expected to come from EU coffers. (MTI-ECONEW; Ng 1, Nv 1, MH 2) Incentives to hire young staff From Jan 1, Companies may get half of the social security charges back if they hire new staff below the age of 25 years or women returning from maternity leave, according to a government draft. The refund will be available after nine months of employment and the employees must be kept for further nine months. The gross salary may be up to Ft 90,000. The social security charge is 29% of the gross payment now. (NG 1) G.R. 2005 motorway funding in PPP constructions The 2005 budget continues funding for motorway construction projects in the form of Public Private Partnerships (PPP), Finance Minister Tibor Draskovics said yesterday after submitting the budget to parliament. PPP constructions are already being used in both the construction of a stretch of the M5 motorway, and another stretch, soon to start, of the M6. By granting concessions to private companies to operate the motorways, the expenses become leasing costs in the budget, Draskovics said, adding that the state would pay Ft 22 billion in 2005 for upkeep of the M5. (Econews; Ng 1, MH 3) Industrial output up, rate down Hungary's industrial output rose by 6.2% yr/yr in August, according to unadjusted figures of Central Statistics Office preliminary report. Working-day adjusted growth rate was 3.6% yr/yr that is less than half of July's 7.6%. In August alone, seasonally- and working-day adjusted rate even decreased by 1.7% compared to July. Industrial output of the first eight months was by 9.2% higher than in the same period of 2003. Analysts expect industrial output growth of about 9% - 11% for the whole year. (NG 3) G.R.

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The proportion of bankcard usage is increasing. For the first time in Hungary over 40% of bankcard transactions were made at POS-terminals of shops in the first half of 2004, according to a report of National Bank Rt (MNB). 55% were withdrawals from ATMs and 3% pre-paid cell phone payments. The number of POS-terminals also increased from 24,395 of Dec 31 to 27,241 of June 30. The number of ATMs decreased by 66 to 2,909, 29.4% of them is in Budapest. MasterCard has 62.2% market share, with over 4 million bankcards while Visa has 34.2%. (NG 4) G.R. Overwhelming applications for EU grants The National Development Bureau (NFH) has been inundated with over 11,000 applications for EU grants since Jan 1 when central funding sources opened to Hungarian companies and NGO's, according to József Veress, a senior executive with the office. 36 of the 63 funds for 2004 had to be closed for the year due to the large number of applications, with grants totaling Ft 110 billion already approved and approximately the same amount still available. Unfortunately, potential recipients based in less developed parts of the country still do not believe that they could succeed, Veress said. Another problem is the high ratio of formal errors, which occurred in 40% of submissions in certain categories. (Vg 1) P.P. Hotel occupancy up yr/yr The occupation rate of three or more stars hotels was 72% in September, according to a report of Central Statistics Office (KSH). That is higher than 66.8% of July but slightly lower than 75.8% rate of August. In first nine months of 2004, 62% of the hotel rooms were occupied on average. The number of guest nights increased by 4.5% yr/yr in September while gross incomes of hotels grew by 5.3% yr/yr. (NG 3) G.R.

Politics
Demszky resigns MEP post Budapest Mayor Gábor Demszky said yesterday that he would resign from his post as a Member of the European Parliament. The move follows a heated dispute in the municipal council over whether the mayor could legally hold both posts and the opposition demands that he resign as mayor. On Wednesday, the head of the Municipal Administrative Bureau, the legal arm of the city, stated that the bureau considered the two posts incompatible. Demszky has been mayor of Budapest since 1990. (MTI; Nv 1, MH 1, Ng 3) Hungary, New Zealand to boost cooperation Hungary and New Zealand will intensify inter-parliamentary cooperation to boost two-way trade and tourism, Hungarian House Speaker Katalin Szili said after talks with New Zealand Governor-General Silvia Cartwright in Budapest yesterday. Cartwright is in Hungary for a five-day official visit at the invitation of President Ferenc Mádl. Earlier yesterday, she exchanged views with Supreme Court President Zoltán Lomnici on the structure and administration of Hungary's judicial system. (MTI; Nv 3) House Speaker joins anti-fascist demo Speaker of Parliament Katalin Szili yesterday added a flower of her own to a huge bouquet in front of Budapest's House of Terror Museum, symbolizing flower power as part of an anti-fascist demonstration initiated by a daily paper. "We cannot allow the crimes of the past to poison the present or stifle our future," Szili wrote on a signature-collecting poster outside the building. The ongoing demonstration, organized by the daily Népszava, followed an announcement by a neo-Nazi group that it planned to hold a demonstration at the museum on October 15, to commemorate the start of a period of Nazi rule in Hungary in 1944. (MTI; Nv 1) Center-left leaders to meet in Hungary Center-left heads of state and governments of 14 countries will be attending the Progressive Governance summit to be held in the Hungarian government's holiday home in Balatonoszod on October 14-15, the government

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spokespersons told reporters yesterday. The presidents of Poland, Chile and South Africa, the German chancellor as well as the prime ministers of the Czech Republic, Romania, Great Britain, Spain, Sweden, Canada, Ethiopia, South Korea and New Zealand will be the guests of Hungarian Prime Minister Ferenc Gyurcsány, government spokespersons, Boglár László and András Batiz, said. (MTI)

Domestic
Healthcare workers hold warning strike Healthcare workers in several cities held an eight-hour warning strike yesterday, demanding higher pay, better working conditions, and increased staffing. Staffs in hospitals and clinics in Szeged (S), Kistelek (S), Pécs (S), Miskolc (NE), Dunaújváros (S), Székesfehérvár (W), Szentes (E) and Veszprém (W) went on strike from 8 a.m. to 4 p.m. but kept up all services needed for patient care. In some places hospital management wore blue armbands overtly symbolizing their support for the strikers. (MTI; MH 1, Nv 1)

Stockwatch
BUX index: BUX Close: 12993.61 Change (+194.57, +1.52%) Stock Closing price Daily change (%) Average price Volume MOL 10,650 4.5 10,511 994,615 Matáv 820 0.6 826 1,209,091 OTP 4,480 0.2 4,455 386,494 Richter 24,150 0.6 23,840 50,802 Egis 10,050 1.8 9,960 35,140 Antenna 3,860 0.8 3,838 16,724 TVK 4,600 -0.6 4,570 8,608 Rába 640 0 632 50,802

Exchange
In forints, Oct 8, 2004

FIXED MIDDLE RATE EUR 1 245,82 USD 1 200,1 GBP 1 355,78 CAD 1 158,83 CHF 1 158,26 JPY 100 179,9 CZK 1 7,84 PLN 1 56,82

Weather
Tomorrow: rain High 18°C (64°F) Low 6°C (43°F)

11/10/2004
Business
6 motorway sections to be built in a concession The government plans to have six motorway sections built in a concession to save on construction costs, according to press information. Winners of the concessions may sign 20-25-year agreements with the government

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to gain the money back that they have invested in the motorways. The sections for concession will be GörbeházaNyíregyháza (M3), Görbeháza-Debrecen (M35), Zamárdi-Balatonszárszó (M7), Balatonszárszó-Ordacsehi (M7), Ordacsehi-Balatonkeresztúr (M7) and the Danube bridge at Dunaújváros (M8). The total construction cost of these sections may be Ft 403 billion. On related news, motorway stickers will get 15% more expensive next year, four-day stickers will cost Ft 1,120, while 10-day stickers Ft 2,300. (Vg 4, MH 9) M.K. PBS to invest Euro 5 mln in Budapest Austrian office supply provider PBS Holding wants to invest Euro 5 million into building a new logistics center in Budapest, managing director of PBS-Hungária Kft Balázs Iván said. PBS will spend the first Euro1 million on extending its current warehouse base, Iván said. PBS wants to serve the Hungarian market and other Central and Eastern European countries from the new logistics center, Iván said. PBS-Hungária reported a Ft 5.2 billion net revenue last year. (Vg 5) M.K. BUX flirts with 13,000-point mark The Budapest Stock Exchange's BUX index rose by 3.39 points last week and closed at 12,955 points on Friday. On Thursday, the BUX closed at a record 12,993.61 points, and Friday a.m. sales flirted around the 13,000-point mark until negative U.S. macro data came out. Overall, the blue chips firmed during the week, with oil group MOL Rt finishing at a historic high of Ft 10,695/share on Friday, up by 10.83%. Telco Matáv Rt firmed by 0.86% to Ft 825, drug maker Richter Rt by 0.42% to Ft 23,700 and retail bank OTP Rt by 0.20% to Ft 4,449. (MTI; Nv 5, Ng 7) Hamilton offers Euro based plan For the first time in Hungary, brokerage Hamilton International Brokerage Rt offers Euro-based Managed Futures with earnings level of 15%, as well as 25%-30%, depending on risk factors. Hamilton's goal was to come up with a product, which promises higher earnings than deposit rates, securities, and stocks, with an optimal risk level. The brokerage was recently fined by financial market regulator PSzÁF for breach of regulation on activities and operation. (Nv 5) P.O. BorsodChem debuts on Warsaw exchange Plastics manufacturer BorsodChem Rt's stocks debuted at the Warsaw Stock Exchange on Friday following an IPO of 7.3 million shares at an issue price of 32.89 zloty. The first ever Hungarian listing on the Polish bourse was, however, eclipsed by the forthcoming PKO Bank issue; trading volume on the first day totaled 124,000, not quite half of the corresponding figure at the Budapest Stock Exchange Rt (BÉT). The new stock opened at 34.7 zloty and fell 3% to 33.5 zloty by closing time. The 14th largest company listed in Warsaw, BorsodChem is expected to be included in the bourse's WIG-20 blue chip index and reach a trading volume comparable to Budapest, CEO László F. Kovács said. With a 13-year presence in Poland, the company is looking to participate in the privatization of Polish state-owned chemical industry players, most notably TDI maker Zachem. (NG 7) P.P. Share delistings pending court decision Ongoing lawsuits have continued to hold up the delisting of shares in regional electricity distributors owned by the Hungarian subsidiary of German power giant E.ON. E.ON made public purchase offers for shares in electricity distributors Édász Rt, Dédász Rt and Titász Rt in spring of this year, gaining stakes of more than 90% in each one. E.ON then exercised its purchase option on all remaining shares. However, small shareholders in the companies protested the "second" buyout offers and took their cases to court. Shareholders in one of the companies, Titász, lost their case and were forced to accept E.ON's original offer for their invalidated shares, but cases filed by Édász and Dédász shareholders are ongoing. (Econews; Ng 7) Hungarians wary of mobile banking Although 7.7 million mobile phones are in use in Hungary, only half a million owners subscribe to mobile bank services. According to financial institutions, many mobile phone users find the subscription fees to these services too high; others do not trust mobile banking. Currently, only three banks offer services that can be initiated by the client, but these transactions are all WAP-based. At OTP Bank Rt, Hungary's largest lender, one in every ten

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retail client subscribe to mobile banking, while at CIB Bank Rt, almost half of the 200,000-strong retail clientele is a subscriber. (MH 1) P.O. Hungarian to head INTOSAI State Audit Office (ÁSz) President Árpád Kovács will head the Governing Board of the International Organization of Supreme Audits Institutions (INTOSAI) for three years from the second half of October. The organization holds its international congress in the Hungarian capital from October 10 until this Saturday, after which Kovács will officially become the president of the organization's Governing Board. INTOSAI announced in 1999 that the next European president leading the organization would come from Hungary. (MH 4) P.O. Hungary reconnects with Balkans Cut into two by the Balkans war, the united electricity grid of continental Europe (UCTE) has been recently reunited after four years of preliminary work, Hungarian grid operator Mavir Rt said. Seven of the countries severed from the main trunk of the network back in 1991, including Bosnia and Herzegovina, Serbia and Montenegro, Macedonia, Albania, Greece, Bulgaria and Romania, are to be reconnected partly through Hungary after the trial run; this will boost the import potential for Hungarian consumers by 200MW, Mavir said. As an added bonus, the extension of the system will increase power supply stability and reliability in Hungary, since the new members have also joined UTCE's mutual assistance agreement. (NG 4) P.P. Bilfinger wins Euro 188 Mln order Bilfinger Berger AG, Germany's second-largest builder, won an order worth Euro 188 million euros to help build a toll way in Hungary. The total value of the project is 470 million euros, the Mannheim-based company said in a faxed statement. Austria's Porr Infrastruktur GmbH and Swietelsky International Bauges mbH will also take part in the project, Bilfinger said. The companies will plan, finance and operate the toll way for 22 years, Bilfinger said. Hungary will pay a monthly fee for the operation of the toll way, the builder said. (Bloomberg) Musashi progressive social schemes Auto parts maker Musashi Hungary Ipari Rt spends more than Ft 100 million, or almost Ft 400,000 per employee, on social allocations annually, CFO Krisztina Gulyás said. Employees can choose from three menus for a daily fee of Ft 100, while those working the night shift can have free sandwiches from the vending machines. Workclothes, protective garments and regular medical check-ups are also part of social allocations. Company buses transport employees between their homes and the factory, and Musashi offers trainings, as well as language courses. The Japanese subsidiary just recently started operating with Euro 15 million worth of new production equipment at its plant in Ercsi, south of Budapest. (Nv 5) P.O. Trade corporations to launch academy The national confederation of Hungarian trade corporations (IPOSZ) plans to launch an international business academy next year jointly with partner organizations in Slovakia and Poland. IPOSZ vice-president Robert Kassai said that two- year courses will be offered to owners of small businesses and will include five subject areas -finance, IT, marketing, designing business plans, and networking. Kassai also said that negotiations with the Czech guild were underway about joining the project. The EU is expected to recognize the academy's degree. (MTI)

Economics
Hungary's dynamic growth Hungary's economy is on a dynamic growth trajectory, with yr/yr GDP growth expected to accelerate from 2.9% last year to 3.6% in 2004 and 3.7% in 2005, a report by the European Commission (EC) concluded based on Q1 capital investment figures in the processing and construction industries. Economic growth in Hungary will be propelled by exports for years ahead with domestic consumption sagging, according to the EC. The 4.0% inflation target set by the Finance Ministry and the Central Bank of Hungary (MNB) for Dec. 2005 is not considered

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realistic anymore; 4.2% is a more likely estimate with inflation expected to gradually decrease from 6.9% this year to 2.8% in 2007, leading to Euro zone entry in 2010 or 2011. Unemployment is likely to stabilize around 5.8% for years, while Hungary's budget and current account deficit and may respectively diminish from 5.1% to 3.2% and from 8% to 6.5% of GDP between 2004 and 2007. (NG 3) P.P. August trade deficit Euro 370 mln Hungary's foreign trade deficit was Euro 370 million in August, with exports rising 14.3% yr/yr to Euro 3.1 billion and imports rising 12.2% to Euro 3.47 billion, according to preliminary figures published by the Central Statistics Office (KSH) on Friday. According to final figures, the July trade deficit was Euro 380 million as against a preliminary Euro 360 million published on September 7. According to preliminary figures, exports amounted to Euro 27.437 billion in the first eight months and imports came to Euro 30.784 billion, resulting in a trade deficit of Euro 3.347 billion, as against a deficit of Euro 3.023 billion in the same period last year. (Econews; Ng 3) Central bank net foreign assets fall Net foreign assets of the central bank fell by a slight Ft 37 billion in September, including the effect of exchange rate changes, figures published by the National Bank of Hungary (MNB) Rt on Friday show. The MNB's net foreign assets stood at Ft 2.1 trillion at the end of last month, up Ft 120 billion from the end of last year as the result of Ft 319 billion fall in gross foreign liabilities and a Ft 198 billion fall in assets. Net debt of the general government owed to the central bank rose by a marginal Ft 2.4 billion in September to Ft 43.6 billion, down Ft 304.8 billion from the end of last year. (Econews) Growth of monetary base slows in Sept. The annualized month-on-month growth index of the monetary base (M0) stood at 107.2% in September, up 2.8 %age points from August, the National Bank of Hungary reported on Friday. In September, the monetary base fell by Ft 6.1 billion to Ft 1,876.2 billion. The monthly average stock of currency in circulation rose Ft 0.9 billion to Ft 1,437.4 billion and the monthly average current account balances of financial institutions 19/64 grew by Ft 3.4 billion to Ft 437.1 billion. The monthly average stock of overnight deposits of other monetary financial institutions fell Ft 10.4 billion to Ft 1.8 billion. (Econews; Vg 10) No agreement on wage rises The National Interest Coordination Council (OET), an interest group for employers and employees, failed to reach an agreement on wage rises and the new minimum wage for next year at a meeting on Friday. Trade unions were asking for a 6-8% gross wage rise and a new minimum wage of Ft 62,000. Employers were offering a 4.5% gross wage rise and a Ft 55,400 minimum wage. Representatives of the government argued that any wage rise over 4% would jeopardize programs intended to boost employment. However, the government proposed reducing the difference between the net minimum and net average wage, to bring the ratio closer to that in the EU. (Econews) Farmgate prices rise 2.6% yr/yr in Aug. Farmgate prices rose 2.6% yr/yr in August 2004 and 5.9% in the first eight months of the year, the Central Statistics Office (KSH) reported on Friday. Farmgate prices for crops, excluding fruits and vegetables, rose 5.0% yr/yr in August and 0.3% yr/yr in the first eight months. Including price changes of fruits and vegetables, crop prices fell 4.2% yr/yr in August and rose 8.2% yr/yr in the first eight months. Farmgate prices for livestock rose 10.6.% yr/yr in August and 3.3% yr/yr in the first eight months. (Econews) International reserves Euro 10.476 bln Hungary's international reserves were Euro 10.476 billion at the end of September, according to preliminary MNB figures published on the central bank's website. Foreign reserves fell Euro 118 million in September and decreased Euro 194 million in a year, but rose Euro 335 million in nine months. In dollar terms, international reserves were USD 12.906 billion at the end of September, up USD 110 million in September and up USD 115 million in nine months. (Econews)

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Politics
Cabinet meets informally in Balatonoszod The ministers in PM Ferenc Gyurcsány new cabinet are shaping the outlines of the work they expect their ministries to do in conformity with the government's platform, at a two-day informal meeting which began in Balatonoszod, W Hungary, on Saturday, a government spokesperson said. Boglar László said that after consulting the ministers, the prime minister would himself determine the duties and priorities for the government over the next 20 months. In related news, according to daily newspaper Népszava, three new political state secretaries will be named during the upcoming week: former privatization minister Tamás Suchman will join the newly founded ministry of rural development, the state secretary of the Agriculture Ministry Tibor Szanyi will work for the Economy and Transport Minister, while a chief advisor of National Development Office (NFH) József Veress will become the political state secretary at the Prime Minister's Office. (MTI; Nv 1, Vg 4, Nv 1, MH 1) P.O.

Domestic
Bor presented Bolyai Award Laser physician Zsolt Bor, a member of the Academy of Sciences, was awarded the prestigious Bolyai Award for outstanding achievement in scientific research and development. Bor also heads the Department of Optics and Quantum Electronics at the József Attila University of Szeged. Former Pharmavit Rt owner Imre Somody founded the award with his wife back in 2000, when the first bronze statuette was awarded to neurobiologist Tamás Freund. The board of trustees, which named Bor as the third winner in the history of the award, was lead by President Ferenc Mádl. (MH 1, *Nv 1) P.O. Hungary to introduce universal EU driver's licenses Hungary, along with other EU member countries, will introduce new driver's licenses, which will now have a uniform design all over the EU, state secretary of the Ministry of Economy and Transport Zoltán Kazatsay announced. The new plastic card licenses will be valid for ten years, Kazatsay said. Currently there are 110 different driver's licenses int he EU, some of them are life-long valid. The new licenses will now always require a medical check-up as well as a new photo. Ng 1, Vg 3) M.K. Hungarian author gets German book award The German book industry's Peace award, the country's highest literary and social prize that can also be given to non-residents, was presented to Hungarian author Péter Eszterházy in Frankfurt yesterday. He is the second Hungarian writer to win the honor, which was founded in 1950 and carries a cash prize of Euro 15,000, after György Konrád won it in 1991. (MTI; Nb 1, MH 1, Nv 6) Ex-National Police chief for Europol's director Ex-head of the National Police László Salgó is a candidate for the position of director of European Union police organization Europol. Since a French and a German candidate split the votes in the competition, the lucky winner can be Salgó who used to work for the Hungarian embassy in The Hague. Salgó speaks English well and wishes to continue his career in an international position. (Nb 7) M.K.

Stockwatch
BUX index: BUX Close: 12954.69 Change: (-38.92, -0.30%) Stock Closing price Daily change (%) Average price Volume MOL 10,695 0.4 10,635 412,721 Matáv 825 0.6 825 1,086,382 OTP 4,449 -0.7 4,462 490,679 Richter 23,700 -1.9 23,835 14,459 Egis 10,115 0.6 10,089 32,504 27

1051 Budapest, Hercegprímás utca 19 Antenna 3,850 -0.3 3,816 21,535 TVK 4,515 -1.8 4,542 5,453 Rába 640 0 629 6,174

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Mail: kiadvany@inetkft.hu

Exchange
In forints, Oct 11, 2004 FIXED MIDDLE RATE EUR 1 245,82 USD 1 200,1 GBP 1 355,78 CAD 1 158,83 CHF 1 158,26 JPY 100 179,9 CZK 1 7,84 PLN 1 56,82

Weather
Tomorrow: sunny High 10°C (50°F) Low -1°C (30°F)

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