Czech Equity Daily: 12/03/10; economy

Index PX: 1,177 points (down 0% d/d); volume: CZK 1,290bn (USD 69m)

Market comment
Trading on the PSE was again slow with low investors´ activity. This time the PX Index did not maintain its gains achieved during the session and after the opening of US markets fell to the negative territory, closing down 0.04%. Liquidity in Prague was concentrated in three stocks. Komercni banka beat the CZK 3,800 level, closing at CZK 3,870 (+1.31%). CEZ successfully attacked the CZK 900 level, which it maintained till the very end (+0.68%, CZK 900). The stock received a lowered target price from HSBC; nevertheless, electricity consumption in January increased. NWR slightly fell (-0.20%, CZK 198) after profit-taking followed a morning growth above CZK 200. in the morning. Erste Bank weakened toward the end of the session to CZK 735.1. CME also slightly declined to CZK 569 after the previous surge. Other stocks passed unnoticed.

GDP – 4Q09 (Analyst: Petr Sklenar)
The Czech economy grew by 0.7% q/q in 4Q09 and the y/y decline slowed down to 3.1% from 4.5% in 3Q. The statistical office dramatically revised the preliminary 4Q figures (-0.6% q/q; -4.2% y/y). On the other hand, the structure brought no surprise. The economy was boosted only by foreign trade (contribution of 0.7pps to q/q growth and of 2.7pps to y/y growth). In contrast, domestic demand stayed subdued. Fixed investments (0.2%) almost stagnated compared to 3Q and in year-on-year comparison the fall slowed down to -7.0% from -10.4% in 3Q. Household consumption declined (-0.6% q/q; -1.2% y/y), deepening its fall (-0.5 % r/r v 3Q). As expected, household consumption reflects negative impacts such as unemployment growth, wages decline but also cautiousness in providing loans. In 2009, the real GDP fell by 4.1%. This year we expect a growth of about 1.2%.