In this week’s Business News: citizens’ bond issue delayed, ČSOB stock listing confirmed, Czechs hit by credit card data leak, construction market blues, and capital problems for prestigious Czech tram contract.
Czechs chances of buying a stake in the booming state debt direct have been delayed. The Ministry of Finance’s launch of bond sales direct to citizens for the first time will not now happen until the Spring of 2010. The original timetable had been for the sale to start this Autumn. But parliament still has to approve legal changes needed for the bond sale. The 10-year bond is expected to offer an interest rate of between 4.5 and 5.0 percent. Local banks have not been too happy about the bond sale since it will be competition for cash that they would like to see customers putting on their deposit accounts.
Around 30-40 percent of one of the biggest Czech banks, ČSOB, will be sold on the local stock exchange in 2010. New shares in ČSOB might also be issued to boost its capital base. The sale was confirmed this week by ČSOB’s owner, the Belgian banking group, KBC. It has been forced to offload assets in return for European Commission clearance for a rescue package of aid from the Belgian state at the height of the financial crisis. As part of a group-wide overhaul, corporate and market activities will be also be cut. The shares issue will be the biggest on the Prague exchange since mining company New World Resources was listed in 2008.
The Czech Republic has been caught up in a massive credit card data leak. Local banks and other credit companies have cancelled more than 10,000 cards following a massive data leak traced back to Spain. In neighbouring Germany the recall has affected 100,000 customers. Czech banks have said they will compensate those customers whose accounts have already been pumped as a result of the data leak.
The Czech home construction market is still struggling to pull itself out of the economic downturn. Latest third quarter figures show that there were 5.7 percent fewer projects started and 8.8 percent fewer completed compared with the same period in 2008. More worrying for the future, there was an around 10.0 percent drop in planning permissions awarded by authorities. The value of new domestic construction orders is also down 26.4 percent compared with those registered in the third quarter of 2008. Builders complain banks are refusing to lend cash for new construction projects.
Czech tram manufacturer Inekon this week began shipping three sets of trams to the US capital. But the debut of the Czech trams on the streets of Washington still seems hampered by local planning problems. According to the Economist magazine, one of the two stretches of track where the trams are due to run will not now be ready until 2012. The other piece of track in the centre of the city is covered by laws conserving the skyline and banning overhead tram wires. Now it seems that the Czech trams could be running in four or perhaps five years at the earliest. Inekon had hoped for a big marketing boost from Czech trams serving Washington.
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Government to extend restrictions on movement until April 1st