INSTANT VIEW 4-Dividends boost Czech Aug C/A gap way above fcast

...shortfall since a 
36.5 billion gap in July 2004, data showed on Monday. 
    The 12-month rolling deficit widened to 125.57 billion 
crowns, or 3.9 percent of last year's gross domestic product 
(GDP) according to Reuters calculations, from 102.3 billion 
crowns a month earlier. 
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KEY POINTS: 
(CZK billions)            Aug        July           Aug forecast 
Current Account         -32.65       -8.80          -9.80 
Financial Account        47.20       -4.17           n/a 
Net Direct Investment    11.20       22.04           n/a 
 
 (For full table, double click on..................[nPRA001550] 
 
- The monthly deficit is mainly due to a 37.4 billion crown 
income balance shortfall caused by the outflow of dividends and 
estimated reinvested earnings on direct investments. The monthly 
gap expands from 14.5 billion in July. 
- Foreign direct investment inflows total 11.2 billion crowns, 
which the central bank estimated included about 10.4 bilion 
crowns in reinvested profits. 
- Portfolio investments show a net 20.1 billion crown outflow 
due to equity investments abroad. The net portfolio investment 
outflow total has been gradually rising on an annual basis in 
recent months. 
- Other investment shows a huge 63 billion crown inflow due to a 
significant shift in short-term positions of monetary financial 
institutions towards international markets. 
 
COMMENTARY: 
    JAN VEJMELEK, ANALYST, KOMERCNI BANKA 
    "Though our estimate was the most pessimistic on the market, 
the reality turned out to be far worse; this number therefore 
offset July's positive surprise. 
    "Such a bad result was caused mainly by a massive deficit in 
income balance -- year-on year the deficit worsened by 26.2 
million crowns. It is not much of a surprise -- the economy is 
growing at a fast pace and at the same time the investment 
opportunities are slowly drying up and the labour market is 
tightening -- foreign investors thus transfer their local 
incomes abroad on a larger scale." 
     
    PAVEL MERTLIK, CHIEF ECONOMIST, RAIFFEISENBANK, PRAGUE 
    "While in the previous two months (June and July), the 
current account deficit was unexpectedly low -- by about 20 
billion crowns lower over last year -- August was a payback. The 
cummulative deficit for the last three months is, however, at 
last year's level. The crown reacted to the unexpected news by a 
slight weakening." 
     
    PETR DUFEK, ANALYST, CSOB BANK, PRAGUE 
    "The deficit reaching treble the market forecast means 
negative news for the crown. The poor result is mainly due to 
dividend outflows which reached about 20 billion crowns. On the 
other hand, August was also a weak month for FDI (foreign direct 
investment), which were mainly made of reinvestments." 
 
MARKET REACTION: 
- Crown erases a slight drop and trades slightly firmer at 
27.470 per euro  by 0829 GMT, from 27.515 just before 
the news. 
 
BACKGROUND: 
- Analyst expectations before data release        [ID:nL0256263] 
- Czech August foreign trade figures             [ID:nL08740676] 
- Polish July C/A                                [ID:nL12918443] 
- Slovak July C/A gap                            [ID:nBSD000031] 
- Hungary's Q2 C/A gap                            [ID:nL0716765] 
- Report on last Czech c.bank rate decision      [ID:nL27772602] 
  [ID:nPRA001517] [ID:nPRA001518] [ID:nPRA001533] [ID:n05533999] 
  
LINKS: 
- For further details on August of payments numbers and past 
data, Reuters 3000 Xtra users can click on the Czech National 
Bank's website: 
    http://www.cnb.cz/en/statistics/bop_stat/ 
 
- For LIVE Czech economic data releases, click on        
- Instant Views on other Czech data                 [CZ/INSTANT] 
- Overview of Czech macroeconomic indicators            [CZ/ECI] 
 
- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH] 
- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
- Czech forward money market rates                       
 
 

[PRAGUE/Reuters/Finance.cz]