Czech Equity Daily: 05/02/10; CEZ, interest rates

PX Index: 1,135 points (-3.3% d/d); volume: CZK 1,988m

Market comment
The trading on the PSE was quiet most of the session with NWR in focus but otherwise rather a low liquidity, but towards the end the market plunged. Nervousness was visible on both European and US markets. The PX Index closed down 3.3%. The anxiety, despite good earnings results, increases with uncertainty related to the financing of deficit budgets in Greece, Portugal and Spain. In Prague, NWR was the loser of the day. After open, it made a brief pause at CZK 185 but then it slumped to CZK 176.5 (-13%), hammered down by yesterday´s announcement of selling prices of coal in 2010 and also by the sentiment in the mining sector. Erste Bank lost over 5% (-5.5%, CZK 691), following declines of other European banks. CME considerably weakened in the closing auction and closed at CZK 515.5 (-6% d/d). CEZ closed below CZK 900, which represented "just¦ 2.4% decline. Today, markets will closely watch US unemployment figures.

CEZ: Neutral (Analyst: Petr Novak)
A consortium of companies, including CEZ, is preparing a project of a photovoltaic power plant at the military base of the Milovice airport, reported E15. The capacity of the power plant was not disclosed; however, the daily estimates it could be around 68 MW, based on the land area (about 150 hectares). CEZ´s investment would be over CZK 5bn (CZK 9/share). At present CEZ is considering its participation in the project. We consider the news neutral for today´s trading.

CNB interest rates (Analyst: Petr Sklenar)
The Czech National Bank decided yesterday to keep its interest rates unchanged at the all-time low of 1.00%. The vote was 6-0, as expected. After a sudden cut in December, there were no arguments calling for a change in either direction.

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