Czech equities, as measured by the PX Index, were up by 1.0% for the week to close at 1,618.9. The overall volume of trading on the PSE reached USD 741.9m, 5.6% below its 12M weekly average of USD 785.5m.
The market followed along in line with the positive sentiment evident all through the CE3 region. The best performer was CME adding almost 10%. The stock was supported by the strong performance of its US traded shares and by the upgrades of a number of analysts following the stock. Telefónica O2 CR also came in with a very nice performance, in line with its regional peers, and it jumped by 3.9%. Telefónica O2 CR was also given an upgrade by several analysts.
Both banks declined slightly and fell behind the unbelievably strong performance of Polish banking sector. Erste Bank decreased on the back of the worse than expected 2006 results of its Romanian subsidiary BCR. Several analysts lowered their recommendation for Komercni Banka. CEZ closed flat in last week’s session; but, as usual, it was the most traded stock. Orco strengthened by 5.6% and kept pace with the Polish GTC. Note that Orco releases its NAV estimate at the beginning of the week. At the end of last week, the centre-right coalition (Civic Democrats, Christian Democrats and Greens) won their parliamentary vote of confidence. The Czech National Bank (CNB) board of governors meets this week with interest rates on the agenda; but, we do not expect any change in the base rate (2%).