The market closed higher after very volatile trading, which followed in the wake of the Czech National Bank (CNB) raising interest rates by 25bps to 3.25%. This step was unexpected by the market. Komercni banka set a new high of CZK 4,309 supported by foreign buyers. CEZ added more than 2% benefiting from its continuing share-buy-back program and a previous large seller has not appeared on the market. (1 183 CZK, -1,09%) was trading at the low of the day at CZK 1,170 when it got some support and closed higher. (1 433 CZK, -1,71%) was under selling pressure and traded in-line with Vienna. (9 777 CZK, -3,74%) erased almost 4% on very low volume. It is expected that (2 952 CZK, 1,06%) will release its 2Q07 results today around 17:30CET.
Prague stock exchange should continue in its rally in-line with European markets. Most active stock CEZ could attack level CZK 1,100 supported by share buy back program. Komercni banka that has tremendous run since Monday supported by foreign aggressive buyers could see some profit taking and we don’t see much upside for this stock at the end of the week. On the other hand has been lacking with its performance behind all blue chips we could see some upside from today’s levels CZK 1,432. Developer company reported 2Q07 data yesterday after close significantly better than our forecast with net income at EUR 54.7m for 2Q07, up 181.7% y/y, The main factors underlying better-than-expected results are revaluation gain and sales though to lesser extent.