Index PX-50 held up above 1,000 points yesterday after it added further 0.88%. Cesky Telcom was the most actively traded stock, it added over 5.20% to above CZK 360 level. The rally followed market speculations that Czech Cabinet may eventually decide for a sale to strategic bidder rather than placement via capital markets. Direct sale would result in an obligatory public bid and thus raising fears of Cesky telecom delisting. At this point, it is very difficult to read political will for either scenarios (placement vs direct sale), but we continue to see a higher probability rate for a public placement. For pricing sensitivity we would expect mid of of CZK 330-340 range. In terms of flows, retail accounts were main drivers behind the rally, London was only selectively active. CEZ dropped below CZK 330 after lowered recommendation; Zentiva was up on lack of supply and no news. Volume in SPAD reached USD 88.73 mil. – better than average.
The CNB Board of Governors held its regular meeting yesterday. As expected interest rates were kept unchanged at 2.5%.
Milan Procházka, Patria Finance