Nord Stream2: Consortium led by Gazprom announced the first tender for pipe-laying contract

Moscow, Russia (ruben van eijk, CC BY)

Hungarians plan to increase food exports to China

Central bank of Estonia: the increase in labor costs force business to seek higher value added

Russia

The Nord Stream-2 project gathers pace. The Wall Street Journal reports that a consortium managing the project, led by the Russian state-owned giant Gazprom, has just announced the first big tender for a pipe-laying contract. The value is USD1bn. Estimated costs of the Nord Stream2 project may reach USD11bn.

“Bids will be evaluated on June 13th ,“ The Wall Street Journal writes. “The schedule is very tight on this job, so I think it could be opened up to include more than one contractor (…) You might even see three [pipe-laying] vessels working in parallel, but no one will know for sure until the contractors are called in for clarification meetings,” The Wall Street Journal quotes a person familiar with the matter.

The consortium wants to build 2 natural gas pipelines. The combined capacity of the pipelines is supposed to be about 55 billion cubic meters. It is said the Nord Stream2 will double Russian gas supplies to the Western Europe.

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Hungary

After months of talks Hungary and China finalized new export agreement. The papers were signed in Ningpo, in eastern China on June 8th. As Péter Szijjártó, Foreign Minister of Hungary announces, this will let Hungary increase its annual food exports to China up to USD100m.

In 2015 China was Hungary’s most important non-EU trading partner, and Hungary was a number one central European trading partner to China. „Exports to China increased by 23 per cent over the first three months of 2016 compared with the same period in 2015,” Szijjártó said at the press conference. He also added that food exports had more than doubled.

But at the same time China imposed embargo on the import of Hungarian duck and goose meat in 2015, due to the bird flu. Now, under new agreements, the embargo will be lifted. This will help Hungary expand its exports. The countries are supposed to conclude talks on Hungarian exports of turkey and chicken. Also four new companies will be given the opportunity to export deep-frozen pork to China.

„In 2015 Chinese investments in Hungary exceeded USD3.5bn (…) Chinese companies employ about 7,500 people in Hungary,” The Daily News Hungary informs. 

Since 2013 China proceeds with its strategy „One belt, one road” of which the major project is bringing back to reality the 16th century Maritime Silk Road.

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Estonia

Ardo Hansson, the governor of Estonian central bank, talked during a press conference about increased labor costs. He said it will soon reshape the business environment, prompting businesses to invest in projects offering higher value added.

„The biggest shortage of labor is in the sectors with low value added. This is a signal that investments should be moving to where profits are bigger. Sooner or later some companies will have to change their business plan and move onto more productive sectors. (…) It cannot be so that suddenly there is not a single company with low productivity – it is that the share of such companies must decrease. The situation will be problematic if the changeover is abrupt and businesses and employees are unable to adapt to the situation, which could result in high unemployment,” said Hansson.

He warned Estonian companies against copying the Finnish model, having in mind Finnish companies that kept people on their payroll waiting for demand to improve. „Businesses in Estonia have the capability to achieve higher value added,” he said.

An average monthly gross wage in Estonia is EUR1091.12 (Q1’16). The unemployment rate is 6.5 per cent.

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What’s up in indexes?

BUX (od Budapest) was up 0.01 per cent – increasing from 27394.19 index points Tuesday, June 7th to 27396.89 index points Wednesday, June 8th. From year-end it’s up 14.53 index points.

BET (of Bucharest Stock Exchange) was up 0.50 per cent – increasing from 6628.49 index points Tuesday, June 7th to 6661.93 index points Wednesday, June 8th. From year-end it lost 4.89 per cent.

PX (of Prague) dropped by 2.36 per cent d/d – decreasing from 895.20 index points Tuesday, June 7th to 874.05 index points Wednesday, June 8th. From year-end it dropped by 8.60 per cent.

WIG20 (of Warsaw) increased from 1832.79 index points Tuesday, June 7th to 1843.85 index points Wednesday, June 8th. So it’s up 0.60 per cent d/d. From year-end it dropped by 0.82 per cent. 

OMXT (of Tallinn) was up 0.08 per cent d/d, increasing from 998.86 index points Tuesday, June 7th to 999.63 index points Wednesday, June 8th. From year-end it’s up 11.19 per cent.

OMXR (of Riga) dropped by 0.85 per cent – decreasing from 645.98 index points Tuesday, June 7th to 640.51 index points Wednesday, June 8th. From year-end it’s up 7.77 per cent.

OMXV (of Vilnius) dropped by 0.56 per cent – falling from 513.66 index points Tuesday, June 7th to 510.76 index points Wednesday, June 8th. From year-end it’s up 5.10 per cent.

SAX (of Bratislava) increased from 319.64 index points Tuesday, June 7th to 319.70 index points Wednesday, June 8th. So it’s up 0.02 per cent d/d and up 9.36 per cent from year-end. SOFIX (of Sofia) dropped by 0.04 per cent – decreasing from 446.79 index points Tuesday, June 7th to 446.62 index points Wednesday, June 8th. From year-end the index lost 3.10 per cent.

UX (of Kyiv) dropped by 0.14 per cent – falling from 665.01 index points Tuesday, June 7th to 664.06 index points Wednesday, June 8th. From year-end the index dropped by 3.18 per cent.

CROBEX (of Zagreb Stock Exchange) was up 0.20 per cent – increasing from 1699.77 index points Tuesday, June 7th to 1703.10 index points Wednesday, June 8th. From year-end it grew by 0.80 per cent.

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