Azerbaijan: the International Finance Corporation, the financial arm of the World Bank, has granted the first part of the US$1.7 million credit to Azerbaijan, which is to fund projects supporting small and medium-sized businesses in the country. The second part of the $3.4 million credit will be available in two years.

Japan announced that it will release $633 million in aid to Azerbaijan, to support the economic reforms programme.

Estonia: Moody's, the credit rating agency, has given a rating of BAA1 to the City of Tallin's 480 million kroons (DM60 million or $32.6 million) Eurobonds issue, due in 1999. This is the first time that Moody's has rated the debt of an Estonian local government and the highest rating received by any of the Baltic countries.

The real estate company, Ober Haus, predicts the stabilisation of the Estonian real estate market and the expansion of commercial and industrial sectors during the course of 1998. It is a very good opportunity for all construction companies, but might narrow the market due to the difficulty experienced by real estate developers when attempting to obtain bank loans.

Hungary: the Japanese Bond Research Agency (JBRA) has said that Hungary now has a lower risk rating following an improvement in the country's political and economic stability, achieved late last year. JBRA analyses political and economic indicators bi-annually. According to the risk rating scale, which ranges from one to ten, with zero being the highest risk and ten the lowest, it has given Hungary a rating of 6.6. The ratings moved Hungary from 34 to 28, among 100 analysed countries.

Latvia: the Latvian foreign trade deficit was 36.637 million lats in January, with an exports value of 83.24 million lats and imports of 119.877 million lats. Exports in January rose by 25.8 per cent over January 1997, while imports increased by 22.5 per cent over January 1997.

Lithuania: the credit rating agency, Standard & Poor's, has given the energy utility company, Lietuvos Energija, a BBB rating for long-term debt liabilities in foreign capital, and an A-3 rating for short-term obligations. Lietuvos Energija is the first Lithuanian company to receive an international rating.

The European Bank for Reconstruction and Development (EBRD) announced its plan to invest in a Lithuanian textile company, Trinyciai. The yarn manufacturer is expected to issue a four million litas face value stock emission in April and May, before selling it to the EBRD. The Bank, which has a 40 per cent stake in the garment company Vilkma, is also planning further investment in another knitwear company, Utenos Trikotazas.

Poland: Leszek Balcerowicz, the Deputy Prime Minister and Minister of Finance, announced that the Cabinet Committee for Economic Affairs (KERM) has approved a bill that provides for full zloty convertibility and the liberalisation of capital flows on foreign exchange. Full zloty convertibility, required by the OECD and the European Union (EU), will initiate full foreign exchange trade liberalisation by the year 2000.

Romania: the National Statistics Board confirmed that monthly inflation in February rose to 7.2 per cent from January. The year on year inflation in February stood at 109.3 per cent, down from 131.9 per cent in January (year on year basis). The Prime Minister, Victor Ciorbea, said that the Government targets 1998 inflation at 45 per cent, despite the sharp rise in February.

Slovenia: according to the Dun & Bradstreet risk rating agency, in March, Slovenia was given a risk indicator DB3a, placing the country at the head of the 21 Eastern European countries listed. The Czech Republic came second and Poland third, both rated at DB3b, followed by Hungary with a rating of DB3c.

Ukraine: during his visit to Estonia, Viktor Suslov, the Ukrainian Economics Minister, revealed the plans of the Estonian-Ukrainian free trade agreement. The first agreement of this kind was signed in 1996, but was not implemented due to the lack of co-operation between the certification bodies of both countries.

Estonia: on 10 March, two large Estonian construction companies, EMV and Merko Ehitus, which account for about ten per cent of the domestic market, signed an agreement on a possible merger. A merger would create a definite market leader in this fast growing sector. According to EMV's financial manager, Imre Sams, the new construction company will also be the biggest in the Baltic region.

AS Eesti Mobiiltelefon (EMT), Estonia's leading provider of cellular phone services, reported a net profit of 263 million kroons ($1.8 million) on the sale of 881 million kroons for 1997. EMT invested 760 million kroons in its network in Estonia. By the end of 1997 it will invest a further 240 million kroons, tapping one billion kroons by the end of this year. Fifty-one per cent of the company is owned by Eesti Telekom, Telecom of Estonia, 24.5 per cent by Finland's Tele and 24.5 per cent by Telia of Sweden.

Hungary: the tourism company, Ibusz Rt., reported its plans to acquire a stake in the Budapest-based bank, Polgari Bank Rt. Polagri Bank is wholly owned by Penzintezeti Kozpont Bank and has a registered capital of 2.750 billion forints ($13.09 million).

The canning company, Globus Rt., has raised its capital by 340 million forints, with 340,000 newly issued shares in the company. The new shares will be traded on the Budapest Stock Exchange, while the offering of private placement shares will take place between 30 March and the end of April.

Latvia: Aldaris, the leading beer producer in the Baltic states, reported a net profit of 2.289 million lats ($3.9 million) on a turnover of 15.328 million lats in 1997. Aldaris raised the stock capital by capitalising savings and investing a part of its 1996 profit. The face value of shares was increased from 80 to 100 lats.

Lithuania: Vilniaus Bankas, the largest, rapidly expanding Lithuanian private bank, reported a net profit of 47.58 million litas in 1997, following a net profit of 47.4 million litas in 1996. Last year the bank doubled its assets from 915.2 million to 1.803 billion litas. The bank has signed a $30 million loan agreement with a syndicate of seven foreign banks. The loan will be used for funding projects for local companies. The syndicate is composed of Dresdner Bank, Banque National de Paris, Hamburgische Landesbank-Girozentrale, BG BankAS, Barclays Bank Plc, DG Bank Deutsche Genossenschaftsbank and Landesbank Schleswig-Holstein Girozentrale.

Poland: on 18 March, Kazimierz Olesiak, President of Bank Gospodarki Zywnosciowej (BGZ), said that the capital of the bank should be raised by between $100 million and $150 million by late 1998 to early 1999. Olesiak confirmed that the bank is discussing the issue with the EBRD and some other domestic and foreign financial institutions. The money will be used for bank development. The BGZ reported a $116.9 million profit in 1997.

Bank Wspolpracy Regionalnej SA in Cracow, southern Poland, announced its plans to increase its share capital by issuing between four and fourteen million ordinary bearer shares with a face value of 2.5 zloty each, and by launching a $30 million five-year bond issue.

Slovakia: Edita Bukovska, President of the insurance company, Slovenska Poistovna Bratislava, said that the company worked out a net profit of 310 million crowns in 1997, following the net profit of 340 million crowns in the previous year. The Slovak National Property Fund owns 50.5 per cent of the company, and VSZ Holding owns 20 per cent. Meanwhile, investments funds and individual shareholders own 23 per cent.

Hungary: the Hungarian Central Bank announced the sale of five Eurobonds worth $300 million, at an interest rate below the 8.12 per cent that the Central Bank is currently paying on its debt to the World Bank. The sale has been planned in order to repay a loan from the World Bank and to boost the amount of its foreign currency reserves.

Romania: the State Privatisation Agency (FPS) announced its plans to sell a 20 per cent stake in four small companies at an open auction called for 23 April at the RASDAQ over the counter market. The companies are AN-CON Giurgiu SA Construction Materials, Metex Roman SA commodities retailer, Prodaliment Baia Mare SA retailer, and Unic Tirgu Mures SA the food retailer.

Azerbaijan: the Parliament of Azerbaijan has adopted a law abolishing the death penalty. The decision was the initiative of the President, Heydar Aliyev, and was welcomed by the Council of Europe, to which Azerbaijan is applying for membership. Azerbaijan is the first ?post-Soviet÷ country to take such a step towards the defence of human rights and democracy.

Czech Republic: on 19 March the Senate of the Czech Republic approved a constitutional law to reduce the electoral term. The law states that elections must take place by 30 June this year, and was approved by 54 of the 72 senators present.

Estonia: the Estonian Foreign Minister, Toomas Hendrik Ilves, and Russian Deputy Prime Minister, Oleg Sysuyev, met in Tallin on 15 March to discuss co-operation between both countries' customs authorities. This is seen as a breakthrough in relations between the two countries.

Latvia: the Secretary General of the EBRD, Antonio Maria Costa, visited Riga to discuss preparations for the annual EBRD Directors' Conference, scheduled for May 2000 in Riga itself. The Latvian Ministry of Finance announced a tender on rights to organise and co-ordinate the Conference.