According to CEZ, the recent extreme volatility in CO2 credits won’t influence significantly CEZ electricity prices. As CO2 credits have only short history and a further development is difficult to predict, CEZ does not intend to reflect them into electricity prices. Predominantly electricity prices will be driven by convergence to German levels; 2007 forward contract now trades at EUR54.2/MWh while Czech electricity price in 2006 stands at only EUR 35/MWh. We remind that in our model we expect price to converge to EUR 45/MWh until 2010. We see the news as neutral for today’s trading and reiterate our Buy recommendation.