The Business Week in Romania 15.08 - 19.08.2016

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MACRO

·      Romania: biggest E.U. economic growth in second semester

According to Eurostat, Romania has the biggest economic growth in the E.U. in the second half of 2016. The top three of E.U. countries by economic growth are Romania (1.5%), Hungary (1.1%), and Slovakia and Poland (0.9%) in joint third, contrasting with France, Italy and Austria, which have zero growth. Romania’s economy grew at the fastest rate since 2008. Increased consumption is the main factor, due to lower taxes and higher wages. The European Commission has drawn attention to the fact that lower taxes might jeopardise budget targets in the coming year, however. At the same time, the Commission predicts that Romania will have the biggest economic growth this year after Ireland. Romania’s G.D.P. increased by 5.9% in the second semester of 2016 compared with 2015.

·      Romanians more pessimistic about their own economy than Europeans

Romanians have a gloomier outlook on their own economy than other Europeans. Seventy-eight per cent of Romanians believe the economy is going badly, compared with only fifty-seven per cent of Europeans. Despite this, fifty-six per cent of Romanians think their families are financially well off, compared with sixty-eight per cent of Europeans, and forty-one per cent think their jobs are secure, compared with fifty-eight per cent of Europeans. Thirty-seven per cent of Romanians think the biggest problems the country faces are health and social security, twenty-five per cent think jobs, and twenty-four per cent think the economy in general. Romanians are not particularly worried about emigration (6%), terrorism (3%), government debt (5%) or taxes (10%).

·      Romanian state bonds reach lowest yield in history

Ten-year bonds issued by the Ministry of Finance have reached the secondary market with an annual yield of 2.89%, the lowest in history. The fall in interest comes against the backdrop of increasing demand for state bonds from emerging markets, which can offer higher yields than in the West, and surplus market liquidity. The interest spread—the difference between long- and short-term bonds—yesterday fell to a historic low of 2.48%. The yield on Romanian state bonds also fell dramatically in 2013, after they were included in two emerging market price indices published by Barclays and J. P. Morgan.

·      Euro Zone inflation higher in July

The annual rate of inflation was 0.2% in July this year, according to Eurostat. Inflation is slightly higher than in June, when consumer prices in the Euro Zone recorded an annual rise of 0.1%. Even if it is the second consecutive month in which inflation has increased, after four months of zero or negative inflation price increases still remain way below the Central European Bank’s two per cent target. Last month, basic inflation in the Euro Zone, which excludes volatile unprocessed foods and energy prices, remained steady at 0.8%. Energy, food, alcohol and tobacco prices rose by 0.9%, however.

Sources: Bursa, Ziarul Financiar

 

BUSINESS

·      Eximbank Romania to lend Raifeissen Leasing Romania seventy million lei

Raiffeisen Leasing Romania is to borrow seventy million lei from Eximbank Romania. Raiffeisen Bank International A.G. will issue a letter of guarantee to cover the loan plus interest and commission, with a due date thirty days after expiry of the loan. The lei account of Raiffeisen Leasing, held at Eximbank Romania, will likewise be mortgaged.  Last year, Raiffeisen lent 105 million Euros, a six per cent increase on 2014. Motorcar loans accounted for sixty-eight per cent of loans, followed by loans for equipment and furniture, at thirty-two per cent. The company’s profit increased by almost thirty per cent, to 4.2 million Euros.

·      Expert Petroleum Luxembourg takes over Petrofac Solutions and Facilities Support Romania

The Monopolies Board has authorised the takeover of Petrofac Solutions and Facilities Support S.R.L. Romania by Expert Petroleum S.P.V. S.A.R.L. Luxembourg, having ruled that the transaction does not place any barriers in the way of competition on the Romanian market. Expert Petroleum is a member of G.M.S. Holdings; Petrofac Solutions and Facilities Support S.R.L. is a member of the Petrofac group, and supplies petroleum services to the oil and natural gas industry.

·      Real-estate investments increase threefold in first semester

The volume of real-estate investments in the first half of this year reached 359 million Euros, one of the highest levels in the last six years. In the first half of 2014 alone, investments were more than 400 million Euros, but in the first half of last year the figure fell to 107 million Euros. Retail and office buildings accounted for 88% of total real-estate sales in the first half of 2016, with foreign investment continuing to dominate the market—local investment accounts for just one per cent of the total.

·      Surprise transaction of 100 million Euros

On 10 June the Israeli group controlled by billionaire Lev Leviev signed a letter of intention to sell the AFI Park 1, 2 and 3 office buildings, with an option for the future purchaser to buy AFI Park 4 and 5. The value of the transaction is 92.7 million Euros, which will make the company a 6.5 million Euro pre-tax profit and generate cash flow of 46.7 million Euros. The purchaser is as yet unknown. AFI Europe Romania made revenues of 22.2 million Euros in the first six months of this year, an increase of 13.1% compared with 2015.

·      DPD Romania invests 1.5 million Euros in new warehouse

Parcel and courier firm DPD Romania has opened a new logistic centre in Romania. The 4,800-square-metre warehouse is located in Mogoșoaia and the investment is worth 1.5 million Euros. The centre will allow the handling and sorting of 70,000 parcels a day. The company also plans to expand its logistics hub in Sibiu.

·      Ikea buys 12,800 hectares of forest in Romania

Ikea has bought 12,800 hectares of forest in Iași and Neamț counties, bringing the total surface area of forests the company owns in Romania to 46,700 hectares. The company claims that the forest will be managed responsibly over the long-term, via I.R.I. Forest Management, which recently received Forest Stewardship Council certification, and will strike a balance between environmental protection, the needs of the community, and profitability.

·      Swedish group Monsson sells shares in EMON Electric

Swedish group Monsson has sold shares in Romanian company Emon Electric to African company EnComm. Monsson stated that the Romanian market was stagnant and that it wanted to focus on countries that have better development prospects and more stable government. Emon Electric was founded in 1998 and makes G.S.M. mobile telephone equipment, as well as working in the energy infrastructure market. Monsson took over the firm in 2014.

·      Arcon group cedes two polystyrene factories to Hirsch Porozell

The Arcon group has ceded its polystyrene factories in Sfântu Gheorghe and Bucharest to Hirsch Porozell S.R.L. The transaction has been passed by the monopolies board. Arcon is to focus on the company’s core business of producing bituminous membranes with elasto-plastomers. In 2015 Arcon’s turnover was more than twenty-eight million Euros, with a gross profit of two million Euros. Arcon was founded in Sfântu Gheorghe in 1994 and was a Romanian investment.

Sources: Bursa, Profit.ro

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