According to HN daily, Czech electricity prices will increase by 14%y/y in 2008. Prague Energy Exchange (PEE) fixed the electricity prices for 2008 at EUR 50.4/MWh as it wanted to prevent in the first year of trading from extreme variation in prices and to avoid speculative purchases. Prices for 2009 will be driven by supply and demand, said Petr Koblic, general director of PSE. Our view: We see the news as negative for the short term as the market was expecting higher growth of electricity prices for 2008 (around 20% y/y) but from the following year 2009 the prices will be driven by supply and demand and we expect price increase by 6.5% y/y