In Business News this week: the Czech crown falls significantly against the US dollar, while also losing value against the euro; the Prague Stock Exchange seesaws again; a sharp decline in the volume of mortgages provided by Czech lenders slows considerably in the third quarter; and Czech betting companies are fighting for a slice of the lucrative on-line gambling business.
Crown falls significantly to dollar and also slips against euro
The Czech crown has been falling significantly in value against the US dollar recently. Whereas three months ago one dollar would buy you under 14.5 crowns, today it’ll get you just over 20 – representing a rise in value of nearly 40 percent. The crown has also weakened against the common European currency, though that fall is less marked; whereas the crown was trading at under 23 to the euro at the end of July, on Friday morning it was at 25.50 to the euro. One reason given for the decline in the crown’s value is the problems facing the Hungarian economy, with investors apparently regarding this part of the world in regional terms. Analysts say the Czech currency is likely to fall further still.
Prices on Prague bourse seesaw again
The Prague Stock Exchange has been see-sawing again this week: after a couple of days of growth, it declined again, with a fall of over 9 percent seen on Friday morning. The main PX index stood at 773.4 points, the first time it has dropped below 800 points since 2004. In related news, it was announced this week that the Vienna bourse was buying the Prague Stock Exchange, having seen off competition from Warsaw.
Fall in volume of mortgages provided slows in third quarter
Jiří Čunek, photo: CTK
There was a 15.4 percent year-on-year fall in the volume of mortgages provided by Czech lenders in the first nine months of this year, according to Local Development Ministry figures released on Friday. However, the decline slowed significantly in the third quarter, when the volume of mortgages provided was just 4.4 percent less than in the same period in 2007. Local Development Minister Jiří Čunek said foreign-owned lenders had significantly tightened borrowing conditions, but the fact the downturn has been so much milder than expected meant the Czech housing market did not need to fear the effects of the international crisis this year.
Czech betting companies fighting for permission for on-line business
Photo: CTK
Czech betting companies are fighting for a share of the lucrative on-line gambling business, Hospodářské noviny reported on Friday. The country’s biggest betting firms have submitted a proposal which now is being considered by the Ministry of Finance. Key to their bid is a provision under which people would have to register in person at a betting office before being allowed to gamble on the net – which would preclude betting by minors, currently a worry for the government. The Czech agencies say every year they are losing up to CZK 4 billion (around USD 200 million) because Czechs are betting on internet gambling sites based in other countries. They seem optimistic the Finance Ministry will rule in their favour – and have already created betting sites which they could roll out almost immediately if they get the green light.
