The potential placement of the 51% stake in Cesky Telecom is a key story for weeks to come after a special purpose committee advised the Czech Cabinet to offload its 51% in the largest Czech phone company via a capital markets transaction. There is no official timing for the deal. Although we believe promptness of the transaction would remove price weakness, we hear sources saying the sale may hit the market as late as in March 2005. Certainly though we expect initial weakness ahead of the release of more details. For today we see the stock opening down 5-10% from yesterday’s close. Our near- to long-term view though remains very positive for Cesky Telecom. We believe that the 9m results today from Komercni and Cesky Telecom will be overshadowed by the Cesky Telecom sale which is the largest telecom transaction in Eastern Europe since 2000. Volume in the SPAD reached USD 63.51m.
Please note that the market is closed tomorrow (28/10) due to state holiday. Trading resumes on Friday (29/10) as normal.
Milan Procházka, Patria Finance