The Czech Parliament approved the government budget proposal for 2001. The budget will generate a CZK 49 bil. deficit and the share of public budget expenditures on GDP will rise to 49%! The contract opposition ODS (a right-of-center party, to remind you) supported the budget on some flimsy excuses.
Investors are voting with their feet: Swedish Vatenfall is selling its 42% stake in one of the Czech distribution companies. The buyer is, yet again, the German E.ON (formerly known as Bayernwerk) that now controls four of eight Czech distribution companies.
The Czech koruna jumped against the euro as a large buyer appeared on the market and snapped around CZK 20 bil.. The koruna moved up to 34.70 CZK/EUR, i.e. it gained 70 hallers.
Czech bonds fell again on Thursday. In a pretty quiet trading with few actions bonds fell significantly. With stable IRS and strengthening crown prices on bond market dropped by more than a trading spread. Again the longest bonds were the most falling ones, though the governments were in demand at the lowest prices. Friday's foreign trade figures will be important for further trading.
Current benchmark prices: MoF 6.75/05 99.00-30 (-15 bps), MoF 6.30/07 94.55-85 (-10 bps), MoF 6.40/10 93.05-35 (-5 bps).
(Ondrej Schneider and Dalimil Vyskovsky)