CEZ: Further political talks about CEZ’s privatization

According to HN daily, leaders of the main political parties expressed their opinion about privatization of CEZ on HN discussion forum. Both main parties, the right wing ODS and left wing CSSD (Social Democrats) said that they would keep state’s stake in CEZ even after the elections while ODS would consider only partial sale, i.e. 16% stake from the total of 68% to pension funds. It seems like ODS is calming down its stance on the privatization of CEZ ahead of elections as the issue is politically sensitive in the light of rising energy prices and Social Democrat’s claims that privatized CEZ would start aggressively raising electricity prices. We see this news as neutral and broadly in-line with expectations that no privatization of CEZ will occur before 2007. We reiterate our Hold recommendation.