The PX-50 Index went through one of the most severe one day declines over several years yesterday after index PX-50 shrugged off 3.50% on volume exceeding USD 144m - well above the average. The top looser was CEZ that lost 5.5% on the day, trading even at daily lows of CZK 310, Komercni followed with over 4% drop (down more than 8% over last 2 sessions) and Cesky Telecom dropping 3%. Supply originated from a broad client base, both London as well as international accounts were on the sell side. There was no underlying news behind the fall. Our view is that despite severance of the fall, selling occurs as a part of the year end profit taking after stellar performance of the market (PX-50 +64.6% YTD in USD terms) as well as recent weakness of the CZK. Investors therefore realise both capital as well as currency gains.
GDP for the Q3 is to be released today at 9.00am CET. Patria estimates 3.5% y/y while the market forecasts 3.9% y/y. The previous figure stood at 4.1% y/y. Industrial output for October is to be released today at 9.00am CET. Patria estimates 6% y/y, the market forecasts 5% y/y. The previous figure stood at 6.6% y/y.
Milan Procházka, Patria Finance