The PX-50 index gained a strong 2% on Monday to set a new record of 902.3 points. Both Komercni banka and CEZ posted around 5% intraday gains with volumes exceeding YTD average levels. CEZ again beat its multi-year high and continues its unbreakable upward trend on no news. It continues to trade in overbought territory and is likely to trade with larger than average volatility as it approaches many brokers’ target prices. The Komercni banka rally followed an aggressive upgrade in the target price from a London brokerage. Cesky Telecom is still holding at the CZK 330-335 range as overhang fears are present, but we think that at lower levels (CZK 330) buyers are already pricing in the secondary offering of the 51%. If the 51% stake is sold directly to a single bidder we expect a sharp upward move toward our target price. Komercni banka is likely to be well bid again, continuing to trade in overbought territory and likely to trade with larger than average volatility. Volume in the SPAD reached USD 76.35m.
Milan Procházka, Patria Finance