The victory of the Social Democrats could help CEZ stock value as it increases the likelihood of CEZ acquiring regional distributors and selling its transmission grid to the state (asset swap), as approved by the company’s AGM last week . Nevertheless, the Civic Democrats, the second largest party in Parliament and who are promising stanch opposition, will likely challenge the deal. Also, National Property Fund (the majority stake holder in CEZ) representatives declined to sign the asset swap contract with CEZ on Friday. An incomplete valuation of the transmission grid to be sold to the NPF was cited as the main reason. The thorny situation still faces, aside parliamentary opposition, possible legal challenges and the approval of the antitrust office. Today, we expect the stock to rise due to the election outcome.
(Jiří Soustružník)