Cesky Telecom corrected yesterday its 4% drop from Tuesday

The PX-50 index gained 0.65% ahead of the closely watched Cabinet meeting that was to decide on sale of Cesky Telecom. Cesky Telecom corrected its 4% drop from Tuesday and closed up 1.64% at CZK 354. Government decided not to hit market with its stake by the year end, rather it will approach strategic bidders and should this attempt fail, then it would turn back to the market. Decision apparently clears any overhang fears and stock is likely to trade up in today’s trading. Generally, we think there are not many short positions in the stock rather we see many investors having neutral view on the stock. Trading wise, we expect gradual rise of price toward CZK 380-390 level and consolidation there, stock will then again linger and wait for further news related to stake sale. The rest of the market was again better bid throughout the day, only Komercni lost 1.60% on no news. Unipetrol traded with higher than average intraday volatility on sizeable retail selling, we saw number of retail clients closing long positions in the stock and raising cash for more purchases into Cesky telecom. Volume in SPAD reached USD 89.37 mil.

Milan Procházka, Patria Finance