The Czech government approved a plan for ČEZ's privatization yesterday. The 64% share in ČEZ will be sold to one investor, together with majority stakes in six distribution companies. Pražská energetika and Jihočeská energetika will be sold separately.
The Czech koruna slightly appreciated against the euro, from an opening level of 35,72 to 35,64 CZK/EUR, yesterday. The CZK/USD exchange rate fluctuated within the range of 40.7-40.85 CZK/USD.
Bonds fell massively in the Wednesday morning, reaching some three month lows. Longest bonds were the most falling again, the downfall on 6.40 as high as two trading spreads (60 bps), while corporates and short-term governments fell some 30 bps. Negative mood did not reverse in the afternoon, however short coverings caused some corrections and the prices recovered slightly. Government 6.40 remains on its life low.
With government bond auction on Friday and Skoda bond issue tomorrow the outlook is not much positive, and downfalls will probably continue.
Despite our previous comments.
Current benchmark prices: MoF 6.75/05 99.85-15 (-20 bps), MoF 6.30/07 95.50-80 (-30 bps), MoF 6.40/10 94.35-65 (-45 bps)
(Monika Procházková and Dalimil Vyškovský)