Poland: possible merger of state-owned oil giants

PKN Orlen headquarters, Płock, Poland

Russia: Gazprom with record exports of gas in 2018

Fitch: Latvia’s sovereign risk from ABLV Bank bankruptcy limited

Poland

The long-expected merger of Poland’s state-owned oil companies will take place probably this year. As reported, PKN Orlen, the biggest Polish oil company, signed a letter of intent with the State Treasury to take over at least 53 per cent of stake in the second biggest oil company, Lotos. The Polish Radio comments, after the Parkiet daily, that the merger “was unavoidable”. The final transaction will have to be approved by the European Commission.

In its press release of PKN Orlen wrote: “The aim of the transaction is to create a strong, integrated company capable of competing on an international market [and] resistant to market fluctuations, among other things through operational and cost synergies between PKN Orlen and Lotos.”

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Russia

Novinite.com reports that due to the heavy winter, Russian state-owned company Gazprom has already recorded record-breaking gas exports in 2018. The new record in daily gas exports to non-Commonwealth countries was observed on February 24th. It was 665.2 million cubic meters (up 2.4 million cubic meters compared with the record of February 23rd, 2016). The new pick is expected on Saturday, March 3rd.

The portal also points out that the low temperatures and depleted stocks of European gas storage facilities triggered an increase in gas prices on the spot market by more than 30 per cent.

In 2017, Northern and Central Europe imported more Russian gas than in 2016. A record volume was reported in Germany – 53.4 billion cubic meters (bcm), up 7.1 per cent, in Austria 8.5 bcm, up 40 per cent, and in the Netherland 4.6 bcm – up 9.7 per cent.

Novinite.com reminds that in 2017 Gazprom increased its gas production by 12.4 per cent y/y. It reached 472 bcm. At the same time, gas exports to Europe grew by 8.1 per cent – to 193.6 bcm.

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Latvia

The international rating agency, Fitch Ratings, informed that Latvia’s sovereign credit should not be affected by the bankruptcy of ABLV Bank, the country’s third largest bank. “Early signs are that deposit flight has not spread to other banks, suggesting that despite the reputational damage the materialization of a long-standing risk posed by a large non-resident serving banking sector can be absorbed by the financial sector without a meaningful increase in sovereign liabilities,” the Baltic Course quotes the agency.

The portal informs that about EUR600m in deposits were withdrawn from ABLV Bank between February 13th and 19th, after the money laundering scandal burst out. Fitch Ratings points out that “so far, there have been no abnormal flows observed from other NRD-serving banks”.

NRD are non-residents deposits. Fitch has long viewed the NRD sector as a risk to the country’s financial stability.

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What’s up in indexes

BET (of Bucharest) increased from 8,376.91 index points Monday, February 26th to 8,403.14 index points Tuesday, February 27th. It’s up 0.33 per cent d/d and up 4.91 per cent y/y.

BUX (of Budapest) decreased from 38,621.00 index points Monday, February 26th to 38,463.00 index points Tuesday, February 27th. It’s down 0.41 per cent d/d and up 17.01 per cent y/y.

CROBEX (of Zagreb) decreased from 1,828.95 index points Monday, February 26th to 1,821.82 index points Tuesday, February 27th. It’s down 0.39 per cent d/d and down 16.24 per cent y/y.

OMXR (of Riga) decreased from 1,026.77 index points Monday, February 26th to 1,026.20 index points Tuesday, February 27th. It’s down 0.06 per cent d/d and up 38.72 per cent y/y.

OMXT (of Tallinn) increased from 1,293.81 index points Monday, February 26th to 1,298.61 index points Tuesday, February 27th. It’s up 0.37 per cent d/d and up 17.57 per cent y/y.

OMXV (of Vilnius) increased from 673.62 index points Monday, February 26th to 675.89 index points Tuesday, February 27th. It’s up 0.34 per cent d/d and up 20.32 per cent y/y.

PX (of Prague) increased from 1,101.47 index points Monday, February 26th to 1,111.12 index points Tuesday, February 27th. It’s up 0.88 per cent d/d and up 15.91 per cent y/y.

SAX (of Bratislava) increased from 332.10 index points Monday, February 26th to 332.55 index points Tuesday, February 27th. It’s up 0.14 per cent d/d and up 7.23 per cent y/y.

SOFIX (of Sofia) increased from 686.16 index points Monday, February 26th to 687.57 index points Tuesday, February 27th. It’s up 0.21 per cent d/d and up 12.26 per cent y/y.

UX (of Kyiv) increased from 1,504.86 index points Monday, February 26th to 1,538.10 index points Tuesday, February 27th. It’s up 2.21 per cent d/d and up 63.63 per cent y/y.

WIG20 (of Warsaw) increased from 2,408.63 index points Monday, February 26th to 2,421.51 index points Tuesday, February 27th. It’s up 0.53 per cent d/d and up 9.56 per cent y/y.

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