CEZ broke above CZK 430 on international demand – the stock will trade ex-dividend today. Erste Bank was well bid yesterday from Vienna; a substantial inflow into the banking sector is apparent after the Unicredio-HVB merger talks started. We continue to see net buying into Zentiva, while the entire pharma sector within emerging Europe has recently been well bid. Cesky Telecom will be testing CZK 465 today; the approval of the Telefonica deal by the European Commission is also widely expected today.
1Q GDP increased by 4.4% y/y - above the market expectation of 3.9% y/y, but slightly below our expectation of 4.5%. In 4Q04 GDP rose by 4.3% y/y. This growth was mostly supported by net exports.