Despite general expectation among locals, the Czech market did not undergo any correction and went in an opposite direction. CEZ gained a very strong momentum and continued to be well demanded mostly from London accounts. Volume in the stock was strong accounting for almost 50% of the volume traded in the SPAD. Performance was also stellar with almost 4.50% gain on the day. There was no relevant news issued yesterday, our feeling suggests that investors like recent news regarding pricing of the 2005 wholesale electricity offer and also removal of 16% stake overhang fears. We are not fully convinced that upcoming results of the Slovenske elektrarne tender will bring any material upside to the share price in the near-term, should CEZ be selected as the winner. Cesky Telecom broke the CZK 340 level, volume is though average. The same pattern applies to Komercni banka. Only Unipetrol, Philip Morris and Erste faced some resistance from mixed selling. As we said yesterday, market has so far ignored rating cut of the country’s rating. Since the rally is driven by liquidity we expect general weakness should volume decrease. Volume in the SPAD reached USD 48.63 mil.
Milan Procházka