The Czech koruna climbed to a fresh 2-year
high on Wednesday in anticipation of
favorable government decision on Cesky
telecom privatization. The unit hovered in
the pretty tight range of EUR/CZK 30.985-
30.995 whole domestic session. However,
the koruna shot up at the end of the session,
because of speculation on a positive
outcome of government discussion on
Cesky telecom case. The unit touched
30.845 few minutes after the domestic
market closed. Later on, the government
announced its decision to sell Cesky
telecom to strategic investor. The tender
should end by March 31, 2005. If there is no
serious bid in the tender, the government will
sell its majority in the company on stock
market. Thus, the most favored dual
approach of the government won. Hence,
the message for the forex market is not
strictly positive, as the central bank could
exchange euros from strategic investors via
its forex reserve. Nevertheless, floatation of
Cesky telecom is still in the cards with
uncontrollable inflow of euros on Czech
forex market. Moreover, even exchange of
euros via forex reserves had positive impact on the market in recent history.
Thus the market may digest government
decision today. The koruna may give up
only part of its yesterday’s gains. The calendar is empty today.
ČSOB - Investment Research