INSTANT VIEW 3-Czech Oct C/A gap below fcast at CZK 13.7 bln

...released on 
Wednesday. 
    The 12-month rolling deficit narrowed slightly to 111.8 
billion crowns, or 3.2 percent of this year's estimated gross 
domestic product (GDP) according to Reuters calculations, from a 
revised 119.76 billion crowns a month earlier. 
**************************************************************** 
KEY POINTS: 
(CZK billions)            Oct         Sept          Oct forecast 
Current Account         -13.68        -2.40        -16.4 
Financial Account         5.32        -6.84          n/a 
Net Direct Investment    18.37         3.78          n/a 
 
 (For full table, double click on..................[nPRA001663] 
 
- The monthly deficit is mainly due to a 25.98 billion crown 
income balance shortfall caused by the outflow of dividends and 
estimated reinvested earnings on direct investments. The monthly 
income balance gap rises from 21.16 billion in September. 
- Foreign direct investment inflows total 18.37 billion crowns, 
which the central bank estimated included about 10.8 billion 
crowns in reinvested profits. 
- Portfolio investments show a net 8.16 billion crown inflow due 
to a foreign bond issue by a Czech entity, says the central bank 
without elaborating. 
- Czech power company CEZ  issued five-year Eurobonds 
worth 500 million euros in early October, according to Reuters 
data [ID:nL02416130]. 
 
COMMENTARY: 
    DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE, PRAGUE 
    "The October current account did not stray from the old 
tracks: dividends and reinvested profits outweighed the 
surpluses in foreign trade and the balance of services. 
    "The external imbalance is not a reason for concern, as 
shown in this year's rally in the crown's exchange rate." 
     
    PETR DUFEK, ANALYST, CSOB BANK, PRAGUE 
    "Slightly better than expected but this is no surprise given 
the better result for the trade balance (already released 
earlier). Dividend outflows were strong also in October, however 
November and December should see a slowdown in fund flows out of 
companies under foreign control. 
    "Foreign direct investments remain solid mainly thanks to 
reinvestments, so they show no strong additional capital inflows 
into the country. For the crown, today's data are neutral, and 
do not change the view of the economy for the central bank." 
 
    MICHAL BROZKA, ANALYST, RAIFFEISENBANK, PRAGUE 
    "A revision of previous month's data spoils the solid inflow 
of direct investments and a surplus on the financial account. 
    "The development on the balance of payments does not give 
any reason for a hectic crown strengthening. Today's balance of 
payments data will probably not help the crown." 
 
MARKET REACTION: 
- Crown steady at 26.000 per euro  by 0920 GMT, within 
sight of Monday's lifetime high of 25.933. 
 
BACKGROUND: 
- Analyst expectations before data release       [ID:nL28651725] 
- Czech October foreign trade figures             [ID:nL0594409] 
- Polish September C/A                           [ID:nL13706390] 
- Slovak September C/A gap                       [ID:nBSD000060] 
- Hungary's Q2 C/A gap                           [ID:nL28171388] 
- Report on last Czech c.bank rate decision      [ID:nL29206268] 
                                  [ID:nPRA001631] [ID:n29679528] 
  
LINKS: 
- For further details on October 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                       
 
 (Reporting by Marek Petrus; editing by Tony Austin) 
  
 ($1=17.74 Czech Crown) 
  Keywords: CZECH BALANCE/  
    

[PRAGUE/Reuters/Finance.cz]