Philip Morris ČR (previously Tabak) raised the retail prices of domestic cigarettes by an average 2.4% as of today. The increase will be about CZK 1 per pack. The price increase will offset (a) the slightly declining domestic demand, and (b) decline in export deliveries due to a closure of one of the company’s plants in September 1999. From the investment point of view, the company's dividend policy (almost 100% dividend payout) is very attractive and we expect its 2000 net profit to rise to CZK 2.9 bil, with a 2000 gross dividend of CZK 1,004 per share (yielding a gross 17.7 %). The stock closed at CZK 5,675 on Friday and we recommend buying the stock.