Daily Economic Briefing – August 8, 2013

NBR Exchange Rates 07.08.2013

Industry turnover increased in H1, due to higher orders

Industry turnover increased, in the domestic and foreign market, by 5.4% in the first half this year, compared with the same period in 2012, according to the National Institute of Statistics (INS). The evolution was influenced by the increase in the manufacturing industry, by 5.7%, while the extractive industry dropped by 2.9%.

New orders in industry up 8.8% in H1 2013

New orders in industry for the domestic and foreign market increased in the first six months of 2013 by 8.8% against the similar period last year, according to INS data. The increase was due to positive evolutions in the capital goods industry (+23.1%), the household goods industry (+4.7%) and the durable goods industry (+2.5%). Declines were recorded in the intermediary goods industry (-8.1%), INS shows in a communique. New orders in industry decreased in June by 0.7% compared to the previous month, but in June 2012 they were 9.4% higher.

NBR to do everything possible to bring interest rates for loans in domestic currency close to those in foreign currency

NBR will do everything possible, by the means available, to bring interest rates for loans in RON as close as possible to those for loans in foreign currency, so that the customers prefer financing in RON, without the foreign exchange risk, according to NBR governor, Mugur Isarescu. “We will do everything in our powers, by reducing the key interest rate, by ensuring market liquidity, by narrowing the variation corridor of interests on the money market, to bring interest rates in RON close to the interest rates in foreign currency”, NBR Governor Mugur Isarescu stated on Wednesday in a press conference. He showed that real estate loans I RON, although involve rates 30% higher than those in foreign currency, are more advantageous for the customer, because loans in foreign currency have, besides the visible cost, another invisible cost, given by the exchange rate fluctuation.

Cristian Popa, NBR: “Parent banks continue to reduce their exposures on Romanian subsidiaries”

Parent banks continue to reduce their exposures on Romanian subsidiaries, but the pace is not very accelerated, although higher compared to other periods, the process remaining largely ordered, which the central bank wants, Deputy Governor Cristian Popa stated on Wednesday. “For Romania we see a certain reduction in the parent banks’ exposures on subsidiaries in the national economy. Is has a slightly larger magnitude than in the past, but does not continue in a particularly accelerated pace. So far the process largely remains an ordered process and of course the interest of the national bank is that this process continues to be ordered”, Popa said after a press conference.

Romania’s drug maker Antibiotice Iasi (ATB) explores the opportunity to open representative office in ten countries

Drug maker Antibiotice Iasi plans to open representative offices in ten states, including Poland, Czech Republic, Slovakia, Ukraine and Serbia, in order to increase its visibility and deliveries on these markets. “In order to develop the company’s presence on foreign markets, in the first half of 2013 we analyzed the opportunity of opening representative offices of the company. Their role is to promote the company’s products under own brand to generate a larger volume of consumption and implicitly of deliveries and to consolidate the image of Antibiotice company as producer of finished forms. For this purpose we have started the promotion activity in the Republic of Moldova”, a report of the producer reads.

Historical maximum for FP titles

Shares in Romania Property Fund (BSE: FP) yesterday increased by 1.19%, to a record level of RON 0.68unit, with a liquidity of this issuer on the regular market of RON 11.52mln. “It’s the first time when the historical maximum posted intraday in the first trading day of FP shares is exceeded”, Gabriel Aldea, chief Front Office department with SSIF Intercapital Invest, stated for Curierul National. “It’s a very good signal”, he also said. FP titles record an annualized performance of 30.77% and an advance of 23.63% compared to the last trading value in 2012. Breaking the previous records of FP titles comes in a positive day at the Bucharest Stock Exchange, marked by growths of 1.93% of the BET index and 3.04% of the financial index BET-FI, amid a liquidity of the regulated market of RON 28.56mln. Interest for FP titles within this price range seems to be confirmed by a special deal made in the last trading hour, with a package totaling 2 million shares at RON 0.68/share.

Seven investors interested in Oltchim (BSE: OLT) privatization

Seven investors are interested in the privatization of Oltchim Ramnicu Valcea, according to Gheorghe Piperea, official receiver of the plant. “Among them there are two U.S. investment funds, an investment fund from Hong Kong, a Russian company, the PCC-Fortissimo Capital consortium, as well as the consortium organized by the SCR group, controlled by Stefan Vuza”, he stated. According to Gheorghe Piperea, the company has contracts providing the necessary raw material until the end of the year. The official receivers of Oltchim, Gheorghe Piperea and Niculae Balan, are facing discontent from the Oltchim Free Trade Union, which asks their immediate replacement and the organization of a governmental committee to analyze the situation of the company.

Emerson invested EUR 80mln in the Oradea Industrial Park

Industrial parks in Oradea are constantly rising. Mayor Ilie Bolojan announced that following negotiations carried out with the representatives of Emerson, it will continue investments started at Oradea Industrial Park I. Thus, last year a convention was signed on leasing to Emerson 14 hectares of land in Oradea Industrial Park. In the first stage, the construction of production halls will be made on nine hectares, in the following stage works for erecting halls following to continue on the other six hectares. The investment made by Emerson in the Industrial Park so far amounted to EUR 80mln only in constructions and the first factory will begin production in February 2014.