Business Report

Photo: European Commission

Record-high industrial output. Eurotel head resigns. Czech Republic an "emerging market" under new S&P index.

Record-high industrial output

Photo: European Commission
Industrial output in the Czech Republic in March surged to an eight-year high of 15.3 per cent year-on-year. Industrial output was up for the 19th consecutive month. Local analysts and traders had anticipated it would be around 9 per cent. They largely attributed the strength of industrial growth to a slightly weaker currency, which helps exports by making them cheaper. The March figure was more than twice the previous month's rate of industrial growth, which was itself a healthy 7.1 per cent year-on-year. The OECD, the Organisation for Economic Cooperation and Development, said in its twice yearly report released on Tuesday it expects the economy of the Czech Republic to grow 2.9 per cent year-on-year in 2003 to 3.1 per cent this year and 3.4 per cent in 2005.

Eurotel head resigns

Terrence Valeski
Eurotel Chief Executive Officer, Terrence Valeski, resigned from his post last week, six months before his management contract was due to expire. The Chief Financial Officer had already stepped down and at least two other top managers are expected to leave Eurotel, which is the leading Czech mobile phone operator. Eurotel is wholly owned by the state-controlled operator Cesky Telecom, which said that the resignations were due to disputes over Eurotel's work on developing a high-speed Internet connection, which would compete with the Cesky Telecom's own ADSL service.

Czech Republic an "emerging market" under new S&P index

The ratings agency Standard & Poor's and the parent company of Citibank will redefine their global equity index as of July the 1st. This redefinition will affect the classification of the Czech Republic and Hungary, which will both move from "developed" market status to "emerging market" status, effective as of the 1st of July. The distinction can affect the interest rates at which international financial institutions lend to the Czech Republic. Standard & Poor's will begin using the World Bank's Gross National Income per capita level threshold of $9,075. In addition to the per capita threshold, to be classified as "developed," a country's stock market must also exhibit transparency, depth, market regulation, operational efficiency and the absence of investment restrictions.