Polish companies PKP Cargo and OT Logistics may recapitalize Croatia’s HZ Cargo.

(Kaffeeeinstein, CC BY-SA)

American gas for Lithuania.

Three Moldavian commercial banks to be liquidated.

Slight improvement in the Ukrainian industrial production.

Latvian tax debt is increasing.

Croatia

Polish PKP Cargo and OT Logistics are the most likely investors of Croatian state-owned rail freight carrier HZ Cargo. After last year’s failed privatization attempts Croatian government is searching for a player that will recapitalize HZ Cargo. Croatian government has increased the company’s capital (through a debt-for-equity swap) by EUR127,1m and now – according to the EU rules – some private company should recapitalize the company with the amount equal to 40 per cent of that figure. Polish PKP Cargo and OT Logistics had shown their interest in the transaction. „In March, PKP Cargo signed a strategic co-operation agreement with HZ Cargo in line with its expansion strategy focused on Central and Southern Europe”, SEENews portal reports. In order to launch its expansion in the region, in July OT Logistics has bought 2.8 million of new shares issued by Luka Rijeka, Croatian port operator. And is searching for more.

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Lithuania

Rokas Masiulis, Lithuania’s Energy Minister, said he believes the country will start importing gas from the United States from the beginning of 2016. The decision will depend on prices and conditions, but transports are possible via Lithianian liquefied natural gas terminal in Klaipeda.

Lithuania now pays very little for gas because of the LNG terminal. The government wants even better terms of trading with the US. But there are still discussions in several American Senate committees on the lifting the ban on oil exports.

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Moldova

Moldovia’s central bank (BNM) announced that three banks will lost its licenses.  Banca de Economii, Banca Sociala and Unibank are to be liquidated. The BNM has just launched a forced liquidation of them. These banks were in the deficit of EUR880m in November 2014. „All deposits have already been transferred to other local banks”, the central bank informed on Friday.

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Ukraine

Industrial production still falls in Ukraine, but not as fast as it was falling last year. The State Statistic Service has just reported the details of 2015 showing that, compared to the same month in 2014, due to the effect of comparative base, the fall in industrial production slowed down to 5.1 per cent against 5.8 per cent in August, 13.4 per cent in July, and 18.1 per cent in June. The industrial production grew by 5.9 per cent in September 2015 m/m. According to the data, in relation to August this year industrial production in September increased by 5.9 per cent. „The service said that this data does not include information from the Anti-Terrorist Operation zone. In addition, as in the previous quarters of 2014 and the first months of 2015, the figure is given without regard to the occupied territory of the Autonomous Republic of Crimea and Sevastopol” – the Interfax article reads.

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Min Fin wants to reduce expenses

„The ministry is ready to reduce budget expenses, but the issue of what expenses are to be reduced and what should not to be reduced requires serious discussion by the public and also requires hard political decisions. Today, only tax rates are being discussed, and no one proposes concrete changes to expenses”- Natalie Jaresko, the Minister of Finance told reporters last week.

Ukraine has just planned the budget for 2016 with the deficit at the level of 3.7 per cent of GDP (in 2015 it’s 4.1 of GDP). The government is trying to achieve macroeconomic stability and to boost the growth by both reforming the economy and gaining funds from international institutions). According to the settlements with the International Monetary Fund, the planned tax reform in Ukraine should not result in the increase of the budget deficit in 2016 compared to 2015. So MinFin proposes the reduction of revenues by UAH60bn and cutting expenses by UAH60bn. The largest sums would be allocated to security and defense, servicing of the state debt and social payments, health care and education.

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Latvia

The total tax debts in Latvia amounted to EUR1,47bn on October 1st, 2015 – the State Revenue Service’s (SRS) informed. More than 60 per cent of that sum (EUR913,2m) are NPLs. It has increased since January 1st, 2015, from the level of EUR1,40bn (up 4.7 per cent). And the total amount of bad debt increased in the first nine months of 2015 by 10.43 per cent (from EUR826,97m to EUR913,2m). The national budget’s deficit is EUR965,2m, municipal budgets – EUR 323,4m, and social security contributions are of EUR179.6m.

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Poland, Serbia

LOT Polish Airlines has informed that flights between Warsaw and Belgrade will be resumed from January 2016. On June 30th, 2015 the company suspended services to Belgrade (Serbia) and Zagreb (Croatia) due to restructuring plan and antitrust regulations of the European Commission. Now LOT will operate four flights a week during the winter season. Serbian national carrier – Air Serbia – will operate additional three flights a week.

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What’s up in indexes?

Almost all of the tigers felt weak on Monday. BUX, BET, OMXT and OMXV dropped. The fastest growing (+3.44 per cent) was OMXR of Riga.

BUX index (of the Budapest Stock Exchange) drops again. On Monday October 19th it ended with 21850.62 index points (compared with Friday’s 21852.10 index points). So it fell down by 0.01 per cent. But from year-end it’s up 31.36 per cent.

BET (of Bucharest) decreased from 7090.80 index points on Friday to 7087.49 index points on Monday, dropping by 0.05 per cent. From year-end it’s up 0.06 per cent.

PX (of Prague) stood still with 970.81 index points (0 per cent change). And from year-end it’s up 2.55 per cent.

WIG20 (of Warsaw) dropped by 0.51 per cent on Monday ending with 2111.04 index points (compared with 2121.94 index points). And from year-end it lost 8.85 per cent.

OMXT (of Tallinn) fell by 0.17 per cent (from 869.04 index points on Friday to 867.52 index points on Monday). But from year-end it gained 14.90 per cent.

OMXR (of Riga) grows very rapidly. On Monday it climbed 3.44 per cent – to 575.06 index points (compared with Friday’s 555.91 index points). From year-end it’s up 40.94 per cent.

OMXV (of Vilnius) decreased a bit to 481.43 index points (from the level of 482.07 index points), dropping by 0.13 per cent. But from year-end it’s up 6.41 per cent.

SAX (of Bratislava) increased from 282.83 index points on Friday to 283.32 index points on Monday, being up 0.17 per cent. From year-end it gained 27.44 per cent.

SOFIX (of Sofia) climbed slightly by 0.47 per cent (from 439.65 index points last week to 441.71 index points on Monday). But from year-end it lost 15.40 per cent.

After a series of drops, UX (of Kyiv) grows again. On Monday it gained 0.56 per cent, increasing to 809.50 index points (on Friday it was 804.99 index points). From year-end it dropped by 21.66 per cent.

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