• 2002-05-02
BOND ISSUE: Lithuania has successfully launched its first 10-year eurobond, which will raise 400 million euros ($356 million), the Lithuanian Finance Ministry said on April 26, reporting heavy demand from Britain and Germany. The issue, which was oversubscribed, was placed with a yield of 5.875 percent, the announcement said. "Low interest rates demonstrate the favorable attitude of foreign investors toward Lithuania, trust in reforms executed by the government and Lithuania's prospects in relation to European Union and NATO integration," the ministry said. Investors had subscribed for 615 million euros' worth of bonds, with most of the demand coming from Britain and Germany. Last year Lithuania issued a seven-year eurobond to raise 200 million euros at a yield of 6.625 percent. (Agence France-Presse)

WIND POWER: Grobina county near Latvia's western port city of Liepaja is set to be the site of the largest wind farm in the Baltic states, according to Aigars Somers from the Latvian-German joint venture Veja Parks. Construction work is already under way at the site and the first windmills should be operational by June. The wind farm will have 33 windmills in total. All are about 78 meters high with a total capacity of 22 megawatts. The electricity produced is expected to be sold to Latvia's state-owned monopoly utility Latvenergo. The project is expected to be completed by the end of this year and cost about $20 million. (Baltic News Service)

INSURANCE RECOVERY: The unsettled global insurance market has begun to stabilize, officials from the Swedish insurer Skandia said April 26 as the company posted a first-quarter profit of 160 million kronor ($15.5 million). Skandia had reported a loss of 200 million kronor for the same period in 2001. "The uncertain market situation we saw in 2001 has stabilized somewhat," said Skandia chief executive Lars-Eric Petersson. The company's operating profit came to 170 million kronor, a major rebound from the 2.54 billion kronor loss in the first three months of last year. Analysts had expected an operating profit of 101 million kronor. Pretax profit came to 233 million kronor, compared with a 281 million kronor loss a year earlier. Skandia said it was no longer consolidating losses by If, an accident-insurance unit it created with the Norwegian insurer Storebrand. Skandia's participation in If dropped to 19.36 percent from 56 percent previously, but not before the Swedish insurer suffered 1.01 billion kronor in losses. On the plus side, the sale of Skandia Asset Management to the Norwegian Den Norske Bank should earn a capital gain of 2 billion kronor once approved by competition authorities, probably in the second quarter of this year, Skandia said. (AFP)

UMTS LICENSE: The Estonian Ministry of Transport and Communications said last week that the licenses for operating a universal mobile-telecommunications system network in Estonia may be issued in the early part of 2003. Preparation and arrangement of the contest for third generation mobile licenses will cost an estimated 30 million kroons ($1.8 million). "Realistically estimating the time needed for the process, I would say that the licenses for third generation mobile communications will be issued in the first quarter of next year," said Edvard Saarma, head of the communications department at the ministry. Under telecommunication legislation currently winding through Parliament, the government will issue four UMTS licenses in a public tender. The participation fee is set at 50 million kroons. Participants whose offers are not accepted will get a 50 percent refund. The auction is expected to bring 200 million kroons into state coffers. (BNS)

EU REBOUND: The euro-zone economy is set to grow by 1.4 percent this year and by 2.9 percent next year, the European Union Commission said last week, bolstering signals from Germany and the European Central Bank that recovery replaced weakness at the end of last year. In the whole of 2001 euro-zone economies grew by 1.5 percent, data from the EU's statistics branch Eurostat showed on April 11, although they contracted by 0.2 percent in the last quarter. For the entire 15-nation European Union, the commission has forecast growth in 2002 of 1.5 percent and 2003 growth of 2.9 percent, after 1.6 percent last year. In 2000 the economies of both zones grew by 3.3 percent. The commission commented in a summary of its semiannual outlook: "A gradual recovery is shaping up as confidence returns, depleted inventories are rebuilt and international trade picks up." In Berlin, six leading German forecasting institutes said last week that Germany, the biggest economy in the 12-nation euro zone and a key export destination and source of direct investment for the Baltic countries, was on the verge of recovery. "In the spring of 2002, the German economy is at the start of an upturn," they said, forecasting growth of 0.9 percent this year and 2.4 percent in 2003 after 0.6-percent growth last year, a performance which undermined confidence throughout Europe. Poland, the biggest of the Eastern European candidate countries, should see economic growth of 1.4 percent this year, but surge to 3.2 percent in 2003. In Cyprus, Malta and Turkey, the outlook was 2.8 percent in 2002, and 3.9 percent in 2003. Turkey is the only candidate state that has yet to start accession talks with Brussels. (AFP)

SHRINKAGE: The Finnish economy contracted in February by 1.9 percent in volume from the same month one year earlier, and by 0.2 percent from January, figures released on April 29 by the national statistics office showed. In February, Finnish gross domestic product was 37 percent greater than in March 1993, when the country was in the midst of a recession that stemmed from global uncertainty and the collapse of its giant neighbor, the Soviet Union. GDP was 16 percent higher in February than in December 1989, the high point of an economic boom that preceded the recession. (AFP)