The PX-50 index gained 1.31% to 563.2 points yesterday, in a day marked by intra-day volatility and strong gains. Ceske radiokomunikace shot up over 8%, though its traded volume remained under USD 1 mil. on no apparent news. The stock was lifted by domestic accounts, which mostly believe the stock is oversold. Komercni banka was stagnant at CZK 2,070 and was offered by natural sellers. Philip Morris CR rose by over 3% after a brokerage upgraded the stock. Overall, we remain bullish on further market growth. From the point of view of trading, CEZ, Cesky Telecom and Unipetrol are our near-term preferred stocks, while Philip Morris CR and Erste should continue to trade around their current levels. Ceske radiokomunikace should trade with wide spreads and high volatility; we do not believe that yesterday’s rally is unsustainable, though, and we expect the stock to fall back to or below the CZK 200 level.
Milan Procházka