Czech stocks finished down 0.65% on Tuesday, with profit taking accelerated by worsened sentiment on pan-European bourses as well as by political changes in the Russian government ahead of the presidential elections. Cesky Telecom and Unipetrol were hit the worst. We continue to see ongoing selling pressure in Cesky Telecom (the company reports its FY results tomorrow). Although the market has already priced in the possibility that the company may report a full-year loss due to multimillion CZK write-downs, we expect the stock may still come under psychological selling pressure; we expect CT to trade around CZK 300 today.
Erste Bank fell in sympathy with the Bank Austria sell-off (-4%). Komercni banka is trading with resistance at CZK 2,800; this level seems to be stronger than we originally thought, but we still expect Komercni banka to break through this level before or soon after the release of FY results on Friday. Volume in the SPAD trading systém reached USD 50.3m.
Milan Procházka, Patria Finance