INSTANT VIEW 3-Czech July C/A gap up on dividends, FDI strong

                                
 PRAGUE, Sept 13 (Reuters) - The Czech current account showed
a 32.53 billion crown ($1.69 billion) deficit in July due to
high dividend payments abroad, the biggest gap since August
2007.
                                
 Analysts in a Reuters poll had forecast a 13.0 billion crown
shortfall.
                                
 The Czech central bank data showed dividend payments from
the Czech Republic abroad amounted to 30.8 billion crowns in
July.
                                
 The rolling 12-month deficit enlarged to 67.69 billion
crowns, equal to about 1.8 percent of estimated 2010 gross
domestic product, according to Reuters calculations.
                                
 The data also showed foreign direct investment inflow of
24.3 billion, the biggest figure since June 2008.
                                
 
****************************************************************
KEY POINTS:
(CZK billions)           July          June         July fcast
Current Account         -32.53        -14.84        -13.0
Financial Account        33.36         14.72          n/a
Net Direct Investment    24.29         13.42          n/a

 (For full table, double click on [ID:nPRA005235])
                                
 
- The current account deficit reached 32.5 billion crown, due to
a deficit on the balance of income (dividend payments of 30.8
billion, interest payments and estimated reinvested earnings).
- The output balance (goods and services) ran a surplus.
- The balance of current transfers includes a deficit of 2.1
billion crownon transfers from the Czech Republic to the EU
budget.
- The capital account includes revenues of 3.7 billion crown
from the sale of emission permits.
- In July, no funds were drawn from the EU budget on the capital
account.
- The capital inflow on the financial account was 33.4 billion
crown under ECB methodology.
- The direct investment inflow reached 24.3 billion crown, of
which forecasted reinvested earnings were 6.4 billion crown.
- The portfolio investment surplus of 8.6 billion crown was due
to purchases of government bonds by foreign investors.
- The annual direct investment inflow total (in the longer run)
has been increasing.
- The annual portfolio investment total (in the longer run) has
been showing an increasing inflow of funds.
- Other investment showed a surplus of 5 billion crown, as a
result of a change in the short-term international position of
the CNB (an increase in short-term deposits accepted from
CNB clients) and mostly owing to government deposits accepted
from abroad.
-The government sector drew on EIB loans totalling 6.9 billion
crown for example for construction of the Prague ring road.
- The balance of transaction in the CNB's international reserves
(adjusted for valuation changes) generated an increase of 4.7
billion crown in the reserves.
                                
 
COMMENTARY:
                                
 HELENA HORSKA, ANALYST, RAIFFEISENBANK:
                                
 "The macro numbers are no longer as positive for the crown
as they used to be. The exchange rate is pricing in too much
good news, including the planned budget austerity, and too
little bad news such as the example today of deteriorating
fundamentals.
                                
 "Therefore we expect a correction by the end of the year
toward the level of 25 per euro."
                                
 
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE:
                                
 "This is a negative surprise, it seems to be caused by an
unexpectedly high sum of dividends.
                                
 "This data could weigh on the crown in the short-term, it
seems that foreign owners are trying to pull out from Czech
firms more than what was expected, and leave less in the Czech
Republic in the form of reinvested profits.
                                
 "It will have an impact (on the crown) in the range of
hellers, not more."
                                
 
MARKET REACTION:
                                
 The crown marginaly dipped to 24.700 to the euro <EURCZK=>
from 24.68 ahead of the data.
                                
 The crown gained 3.6 percent versus the euro in July alone
and has risen 6.3 percent so far this year.
                                
 
 BACKGROUND:
- Analyst expectations before data release       [ID:nLDE67U1GT]
- Czech July foreign trade figures               [ID:nLDE685051]
- Polish July C/A data                           [ID:nLDExxxxxx]
- Slovak June C/A data                           [ID:nPRG004344]
- Hungary's Q1 C/A data                          [ID:nLDE65S24L]
- Report on last Czech c.bank rate decision......[ID:nLDE67418T]
                                
               [ID:nLDE67C0JT] [ID:nPRG004294] [ID:nL5217809]

 LINKS:
- For further details on July 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       <ECONCZ>
- 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                <CZKVIEW>
- Czech money guide                                      <CZK/1>
- Czech benchmark state bond prices                   <0#CZBMK=>
- Czech forward money market rates                      <CZKFRA>

 (Reporting by Jana Mlcochova)