In this week’s Business News: national banks cuts interest rates and growth expectations; tv ad spending still depressed; Czech bank cleared to make debut on foreign-dominated market, state electricity grid operator seeks to buy up private firms; and solar power tests the water.
Central bank takes more pessimistic stance on future growth
Czech National Bank, photo: Štěpánka Budková
The Czech National Bank this week cut interest rates to a record 0.75 percent but also cut its expectations for economic growth. The bank predicted that growth next year will be 1.8 percent instead of the previous forecast of 2.1 percent. It left this year’s expectation unchanged at 1.4 percent. That is still a tad more pessimistic scenario than the Finance Ministry which puts growth this year at 1.5 percent and next year’s at 2.4 percent. The bank’s governor warns economic growth will be curbed by a temporary slowdown in domestic and foreign demand.
CME results show ad spending still struggling to recover
Television ad spending is a good barometer of the state of the economy with budgets quickly slashed and suppressed when times remain difficult. And the latest results from Central European Media Enterprises, the owner of the Czech Republic’s biggest commercial broadcasting group with TV Nova as its flagship, shows ad spending still in the doldrums. A breakdown of group results show ad spending actually declined in the first quarter in the Czech Republic compared with the first three months of 2009. The group expects a slow upturn in the second half of the year but only sees itself cashing in on its local market dominance and high viewer figures much later.
Czech bank cleared to take on foreign-owned rivals
The central bank has cleared Czech brokerage firm Fio to set up as a bank. The step is noteworthy since few bank licences have been handed out in recent times and Czech-owned banks are a rarity on a banking market dominated by foreign firms. Fio says it will offer normal banking services to businesses and individuals via the internet and at 55 branches. It was the first company to offer Czechs internet trading in shares in 1997.
Electricity grid operator plugs into acquisitions market
Photo: European Commission
In the current tough times it is not usual for state companies, apart from cash rich electricity producer ČEZ, to be on the acquisition trail. But the operator of the national high voltage electricity grid, ČEPS, is looking to buy. It says that it has such a workload of construction projects over the next 15 years that it would make more sense to buy some of the private companies that do the work rather than contract the work out to them. One of the targets is the power line repair and construction company Egem owned by Czech-Slovak consortium J&T. The price tag is put at around 1.5 billion crowns, around 73 million US dollars.
Pleasure fleet tries out solar solution on the Vltava
Photo: European Commission
And finally, solar power is taking to the water in the Czech Republic. The company offering pleasure cruises on the Vltava river in the centre of Prague has rigged out one of its boats with solar panels on the cabin roof. On sunny days, these can provide around 40 percent of the boat’s power needs. The pilot project on the 30-seat craft called Elektronemo could be followed by solar panels being installed on all of the fleet including the large paddle steamer.
