The Czech index closed little changed yesterday. Erste was actively traded after it acquired the EUR 3.75b BCR stake. The stock opened almost 4% lower but managed to close flat on the day. The volume traded in Erste accounted for the largest event of the day in the stock. Komercni traded flat with decent a two-way flow and locals continue to open long positions in both CEZ and Zentiva. The rest of the market traded with only a little appetite. We expect muted trading until year end, as the holiday season has arrived.
Czech macro: No interest rate change (current 2%) expected at today’s CNB bank board meeting. Monetary policy is on the agenda but we don’t expect any change as inflation remains below CNB’s forecast and monetary conditions have been tightened by the recent exchange rate appreciation. The latest developments in retail sales also indicate that inflationary pressures, possibly arising from the demand side, are not a hot issue.