CEZ was well demanded throughout the day by both domestic as well as international accounts. Investors are positioning themselves ahead of a potential dividend announcement by the company in the next few weeks. Zentiva was the top performer after London banks put an aggressive target price on its Hungarian-sector peer Gedeon Richter - the whole EMEA pharma sector was a strong performer yesterday. Moreover, the recent CZK weakness seems to benefit Zentiva. Philip Morris on the other hand is not benefiting from recent currency moves and there were sellers on the back of these developments. We expect selling pressure on Philip Morris CR over the next few days.
As expected the Netherlands rejected (62:38) the new European constitution in a referendum yesterday. This is the second blow to the EU, after France on Sunday. The markets have already been pricing in a negative outcome for these referenda. These rejections may cause volatility in the financial markets to increase, in particular in currencies and government bonds. In addition, the equity risk premiums for European stocks may also rise, which would have a negative impact on valuations.