CEZ shot up to CZK 455 after local media reported that electricity prices may grow by almost 30% over the next 3 to 4 years. Even though we forecast an almost 25% price increase over the relevant period, the news inspired both domestic as well as international accounts to step in. We think the stock is trading with strong momentum and may be poised for further growth. Zentiva gained over 1% on foreign appetite; the pharma sector in Eastern Europe continues to be very attractive as both its Hungarian peers posted strong gains as well. For the rest of the market, volumes remained light with no particular news or capital flows. By the end of June, the Prague Stock Exchange will start trading in CME shares (currently listed on NASDAQ under Bloomberg Code CETV). We expect the issue to attract attention from both domestic as well as international accounts. CME is a commercial television company with interests in Central Europe; its current market capitalisation stands at USD 1.5bn.
The May PPI is to be released at 9:00am CET. The market expects a rise of 0.1% m/m and 4.8% y/y compared to 0.1% m/m and 5.6% y/y in April. Patria expects producer prices to stagnate from April and to rise 4.8% y/y.