CEZ is not participating in a tender for electricity supplies organized by SME, the Czech Republic’s largest electricity distributor.
There is a long-standing row between CEZ and SME, we think that CEZ might try to supply SME’s biggest customers directly (SME’s customer portfolio boasts many major companies). The issue of supplies to SME will probably be resolved from CEZ’s point of view after it acquires a majority in SME as part of the government’s sector restructuring plan (expected to be completed at the end of 2002; the state Anti-Monopoly Office is reviewing the transactions proposed in the plan). Interesting news, but it should not have an impact on CEZ stock.
Separately, regulated retail electricity prices should drop by approx. 3% next year. Our expectation was 5%.
(Jiri Soustruznik)