Prague: Volatile and Nervous Trading During the Past Week

Czech equities, as measured by the PX Index, were off by 5.4% for the week to close at 1,613.0. The overall volume of trading on the PSE reached USD 1,680.0m, 106.9% above its 12M weekly average of USD 811.9m.

The volatile trading last week was clearly influenced by the negative sentiment that permeated global markets and in particular, the record fall-off in the Chinese market. Only new listings finished the week in positive territory. Pegas was supported by its positive coverage recommendations from some of the brokerage houses. ECM was in demand from both domestic and international investors.

The biggest loser of the week was Komercni banka. The stock fell by more than 9% on aggressive foreign selling. This happened even though KB’s 4Q06 results came through in line with expectations. Erste bank also declined, but it was off by only 2.3%. It was supported by good 4Q06 figures. Orco lost almost 9% and it looks like some investors were switching out of Orco and into ECM. Unipetrol declined by 6.7%, despite its posting better than expected 4Q06 results. CME also announced its results last week, which came in broadly as expected by the market and its stock fell along with the overall region.

For this week, we expect to see a positive reaction to the strong Zentiva’ results and Turkish acquisition announced on Monday morning. And, there should also be a reaction to the results of ECM, which came in lower that our expectations.