The PX-50 index lost 3.26% on Friday as the Czech market fell in line with the losses on major European bourses. The sell-off could also have been accelerated by position closing ahead of the weekend’s general election in the Czech Republic (see below). CEZ felt the pain Friday as it lost 5.70% to CZK 89.25 (see below). Cesky Telecom was the biggest loser, however, giving up more than 7% to fall below CZK 300; the weakness of European telecoms a key factor. For today, the market will absorb the election results, and we believe that CEZ might rise on the hope that the new Cabinet will push through a planned asset swap of the transmission grid and regional distributors.
(Milan Procházka)