The PX-50 index closed down 2.09% just below the 800 level. As we expected, Komercni banka continued to be punished after posting weak Q1 results on Friday. It dropped additional 3.6% to CZK 2,834. Rest of the market fell in sympathy - Ceske radiokomunikace down 7.4%, CEZ -2.5% and Cesky Telecom -4.1%. Even though majority of the SPAD listed stocks reported rather solid Q1 results we begin to feel that investors gradually start pricing in an expected interest rate hike by the Czech National Bank (CZK 2W repo rate is currently at 2%). Recent moves on the currency and fixed income markets seem to be supporting such a guess. Note also that the CNB upped the Czech GDP forecasts dramatically recently. We continue not to be strong believers in any substantial recovery of the market. Volume in the SPAD system reached EUR 66.9m.
Milan Procházka, Patria Finance