INSTANT VIEW 3-Czech June C/A gap above fcast, big div outflow

                                
 PRAGUE, Aug 11 (Reuters) - The Czech current account showed
a 16.03 billion crown ($884.2 million) deficit in June, bigger
than the 13.5 billion gap forecast by analysts, data showed on
Tuesday.
                                
 A major factor was the seasonal outflow of 29.3 billion
crowns in dividend payments from Czech subsidiaries to their
foreign parent firms, the central bank said.
                                
 There was also a net outflow of direct investment amounting
to 5.45 billion due to Czech acquisitions abroad and an increase
in the volume of loans within groups.
                                
 The 12-month rolling deficit dipped to 81.4 billion crowns
($4.49 billion), or 2.2 percent of 2008 gross domestic product
(GDP), according to Reuters calculations.
****************************************************************
KEY POINTS:
(CZK billions)           June          May         June forecast
Current Account         -16.03        -11.72       -13.5
Financial Account        25.56          4.84         n/a
Net Direct Investment    -5.45         -2.26         n/a

 (For full table, double click on [ID:nPRA004700])
                                
 
- The current account ran a deficit of 16.03 billion in June,
the second deficit so far this year after May's 11.72 billion
gap. This reflects a 41.60 billion crown shortfall on the income
balance, the deepest gap so far this year but an improvement
from last year's 61.47 billion crown gap.
- Dividend payments reached approximately 29.3 billion crowns
and estimated reinvested earnings, booked as outflow on the
income balance, reached 6.7 billion crowns.
- Capital inflow on the financial account was 25.6 billion
crowns.
- The inflow of foreign funds in portfolio investment of 10.6
billion crowns was attributable particularly to a sale of part
of foreign bonds by domestic banks and other non-banking
investors.
- Other investment showed a surplus of 16.4 billion crowns,
owing to a change in the short-term international position of
banks (growth in deposits received).
- The government sector drew on an EIB loan of 3.1 billion
crowns for transport infrastructure development.
- The Czech central bank's international reserves (adjusted for
valuation changes) dropped by 4.2 billion crowns.
                                
 
COMMENTARY:
                                
 MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
                                
 "The numbers are overall a disappointment... thanks to
foreign trade showing a relatively high surplus I expected it
could reflect on the current account."
                                
 "Trade balance showed a significant improvement both from
last month and from a year ago... this is given by
implementation of scrap subsidies in neigbouring countries."
                                
 "The biggest disappointment is the income balance which
dropped significantly... That's what had a negative impact on
the entire current account."
                                
 "(As for portfolio investments) banks may have been looking
for additional liquidity and they had their means in foreign
bonds."
                                
 
                                
 PETR DUFEK, ANALYST, CSOB
                                
 "It was a slight surprise due to the higher dividends,
although dividends are not stable in the Czech Republic. There
are changes usually among different months."
                                
 "One surprise was the low FDI. It should be part of the
trend because foreign companies are not so willing to invest in
central and eastern Europe during recession. But the volume
including reinvested profits is very low, in fact in net it is
negative."
                                
 "There should be no influence on the currency because the
deficit is not a lot."
                                
 MIROSLAV PLOJHAR, EMEA ECONOMIST, JP MORGAN
                                
 "The overall trend remains the same for the time being, the
trade balance continues to show high surpluses as exports are
still weak while imports fall... on the other hand, a dividend
outflow remains very strong, which is different from other
countries."
                                
 
  BACKGROUND:
- Analyst expectations before data release        [ID:nL4373188]
- Czech June foreign trade figures                [ID:nL6640358]
- Polish May C/A                                 [ID:nWAR008538]
- Slovak May C/A gap                             [ID:nBSD000215]
- Hungary's Q1 C/A gap                            [ID:nLU713285]
- Report on last Czech c.bank rate decision.......[ID:nL6146715]
                                
 [ID:nL655323] [ID:nPRG001524] [ID:nL6221606] [ID:nPRA004692]

LINKS:
- For further details on June 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/

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 (Reporting by Jana Mlcochova, editing by Jan Lopatka)