Hungary: Hungary will be permitted to draw the next instalment of the US$390 million stand-by credit facility agreed in March 1996 with the IMF. The steady positive growth of the Hungarian economy, the reduction in the budget deficit and the level of the current account all fulfil the conditions set by the IMF in the 23 month agreement. In a report on the Hungarian economy issued last week, the IMF emphasised the importance of continuing with structural pension reforms as a base for long-term stabilisation, growth and increased investment. The IMF also called for more attention to be given to public expenditure and made it clear that they wish to see further improvements in the coordination of fiscal and monetary policy.

Poland: A permanent 14.4 per cent customs duty on zinc imported from Poland has been imposed by the Committee of Permanent Representatives of the European Union. This follows the temporary anti-dumping duty payments imposed after the appearance of a glut of cheap Polish zinc on the market. According to Polish producers, low prices are the result of lower quality product and cheaper transport. Polish producers have decided to accept minimum prices on the condition that they do not have to pay fines.

Poland's trade deficit for the first seven months of 1997 increased to US$7.3 billion, announced Polish Finance Minister Marek Belka. The deficit would have been lower if it were not for public debt financing, said Mr Belka. According to Hanna Gronkiewicz-Waltz, President of the National Bank of Poland (NBP), strict monetary policy will be continued next year, with an inflation target of 13 per cent and a budget deficit target of 1.9 per cent of GDP.

Poland: A new Christian Democratic Party, made up of Solidarity Election Action (AWS) and a number of small right-leaning party groupings, will be formed after the elections on 21 September with the aim of pushing market reforms, according to AWS leader Marian Krzaklewski.

The AWS and its rival, the Democratic Left Alliance, will each receive 25 per cent of the vote in the forthcoming elections, according to the polls taken by the Polish newspaper Rzeczpospolita and the Social Research Centre. The polls also predict that the new parliament will include representatives from the Polish Peasant Party (PSL), the Labour Union (UP), the Movement for Reconstruction of Poland (ROP) and the National Party of Pensioners (KPEIR).

Poland: US based company Southern Energy has sold its 49 per cent stake in the Zamojska Spolka Elektroenergetyczna (ZSE) heat and power plants project to the UK based Energy Group. According to Marek Polonka, Local Consultant for Southern Electric International, which oversees Southern Energy's operations in Poland, Southern Energy decided to pull out of the venture after purchasing a utility company in Berlin six months ago. ZSE was founded to build three gas-fired combined heat and power plants each valued at US$100 million in south-eastern Poland. The Polish state-owned electricity distributor Zaklad Energetyczny Zamosc maintains a 51 per cent stake in ZSE.

A US$30 million development loan has been granted to Gaspol SA, the largest liquid gas distributor in Poland. The loan comes from a consortium including ABN Amro Bank SA of Poland and Banque National de Paris of London.

Czech Republic: Czech power company CEZ has lost its chance to win a tender for a majority stake in the energy producer Elektrarna Opatovice. Competition for the 50.5 per cent stake in Opatovice was very strong, with two shortlisted foreign bidders, German utility GESO and British National Power.

Hungary: A proposal on the privatisation of the transport company Volan will be submitted to the Hungarian Government by the Ministry of Transport, Telecommunications and Water Management and the Hungarian privatisation agency APV Rt, by 30 September, according to Deputy Department Head of the Ministry, Andras Szekely. Volan is a transport holding company with a total registered capital of Hft12.9 billion (US$65.7 million). According to Hungarian privatisation law, the state will retain a 50 per cent stake plus one vote, thus securing its position in the ownership.

Poland: Nine serious offers have been submitted for the purchase of shares in Powszechny Zaklad Ubezpieczen (PZU), Poland's largest insurance company. According to Karol Swarc, President of the PZU Supervisory Board, the offers were made by a number of different companies including Pekao SA, Bank Ochrony Srodowiska SA and a consortium consisting of Bank Inicjatyw Gospodarczych, French company Axa UP, US company AIG and various other large US concerns.

The Warsaw Commodities Exchange (WGT) will begin trading in liquid fuels in November this year. All types of fuel will be traded, including petrol, diesel fuel, and heating oil. Domestic and foreign producers and buyers will be targeted. A guarantee fund will be created to secure transactions for the trading sales, according to WGT official Kazimierz Tulowiecki.

The Warsaw Stock Exchange will start trading its WIG20 index futures in December, providing that the Polish Securities Commission (KPW) approves it, according to Deputy President of the Exchange Piotr Szeliga. The three and six month futures on the WIG20 index will expire quarterly in March, June, September and December. The WSE also plans to move into options trading.

The Public Securities Trading Bill was signed on 17 September by President Aleksander Kwasniewski. The bill is intended to create a legal framework for derivatives trading and the short sale of stocks, aiming to harmonise Poland's regulations with international standards. It will take effect three months after publication and includes the following provisions: to allow brokers to advise their clients; to allow Polish corporate companies to float 25 per cent of their shares on the international markets without Polish Securities Commission (KPW) permission; to allow companies from OECD countries to issue stocks in Poland from 1999 onwards; to allow foreign investment funds to operate freely in Poland; to allow foreign brokerage houses to open operations in Poland; the right to underwrite issues will be restricted to banks, brokerage houses and insurance companies; companies must pay the KPW fees valued at 0.6 per cent of each issue and 0.015 per cent of the transaction value on the secondary market.

Russia: A decision to fix the value of declared shares in Siberian oil company Sibneft was approved by an extraordinary meeting of Sibneft shareholders. The decision will allow the company to carry out an additional issue of 12,500 billion ordinary shares with a nominal value of 1.6 roubles each. Company President Viktor Gorodilov said that the new shares could be exchanged into securities of Sibneft subsidiaries in the course of transfers to a single share. The meeting, held in Omsk, also discussed the alteration of the company's legal status in connection with the forthcoming sale of the company's controlling interest, which is currently owned by the state.

Hungary: A new eight-year US$50 million investment fund focusing on Hungarian companies will be opened by the Kvantum Investment Bank, according to the bank's CEO Laszlo Haas. KIB currently manages a $5 million fund dedicated to fast growing companies and those which require restructuring. Another $30-50 million fund, to be managed by Creditanstalt`s Equinox Investment Advisers, will be set up by US aircraft maker Boeing, according to the Budapest Business Journal.

Russia / NIS: Cayman Islands based company Shimoda Capital Advisors has unveiled a new fund oriented towards smaller Russian, Estonian, Kazakhstani and Romanian ventures. The Shimoda Russia / Newly Independent States (NIS) Investment Fund, which opened in May this year with assets valued at US$500,000, was worth $2 million by the end of August. Russian small stocks account for 70 per cent of the fund; the remaining 30 per cent is spread across the Estonian retail and banking sectors of Estonia and the Kazakhstani oil and gas sector.