Tuesday, April 05, 2005

Hungarian investors go local

In "New Europe" the future looks bright.

No wonder the French and Germans are bit bitter about EU Enlargement - the fact that they're economies are stagnant and structurally weak doesn't help matters. Here is just a taster of what is going in here in Hungary.

Hungarian investors focussing on neighbours

Budapest, April 4 (MTI) - Hungarian capital investors focus on the new member states of the European Union and the countries aspiring for membership, a daily paper reported on Monday.

Hungarian investors are mainly attracted by these countries' relatively less developed economic environment, making it easier for them to enter the market, the chance of quicker returns and geographical proximity, Magyar Nemzet said.

The main destinations of Hungarian investors are currently Slovakia, Romania and Croatia.

Slovakia's recent tax reforms and EU entry have given a boost to Hungarian direct investment, Tibor Varga, head of the Bratislava bureau of the Hungarian Investment and Trade Development Agency (ITD Hungary), said.

Until last September, Hungary has been the seventh biggest foreign investor in Slovakia, trailing only Germany, The Netherlands, Austria, Italy, France and Britain with a market share of 6.6 percent. Hungary's total investment in Slovakia has reached USD 1.7bn, the bulk of which came from large investors, primarily the Hungarian oil and gas company Mol. In the first three quarters of 2004 Slovakia received the highest FDI from Hungary in the value of USD 186.3m, ahead of Austria (USD 151.9m) and the United States (USD 101.8m).

Romania is another favourite destination of Hungarian capital investors. To date more than 5,000 Hungarian-Romanian joint ventures were established, with Hungary becoming the seventh biggest investor and accounting for 2.65pc of all FDI in that country. Hungarian investments in Romania, including recycled profit and capital raises, have exceeded USD 700m. In value terms, 60.5pc of Hungarian capital landed in the retail sector.

Croatia, which used to be considered a risky place for investors, attracted USD 930m worth of Hungarian capital from 1993 to 2004, Tibor Sult, head of ITD Hungary's Zagreb office, said. Hungarian investments in Croatia comprised manufacturing, retail trade, tourism, services, privatisation and greenfield investment projects alike.

MOL and OTP Bank have lots of cash to spare and are making numerous acquisitions. MOL is now reported to be due to takeover Croatia's INA oil company, and OTP are very busy buying banks in Serbia ......... Yes, tourism in Croatia; the potential is huge, the decision to invest is almost a no-brainer.