Czech Equity Daily: 13/01/11: NWR

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Index PX: 1,244 points (up 1.2% d/d); volume: CZK 1,648m (USD 87m)

Market comment
The PSE gained yesterday following other European markets. At first, the PX Index slightly hesitated around the noon but eventually closed almost at an intraday high, up 1.2%. The growth was driven by the banking sector as investors perceived positively the successful auction of Portugal's government bonds. The easing of the tension can be also attributed to wilfulness of the ECB to purchase bonds of troubled countries or to the previously announced help by Japan. Komercni banka added 1.5% (CZK 4,440) supported by a raised target price by Morgan Stanley to CZK 5,200. Erste Bank grew by 1.6% to CZK 849.6. Citigroup newly recommends overweighing domestic stocks within emerging markets portfolios; however, the local market did not really get in spotlight yesterday. Commodity prices responded to a weaker dollar. NWR shot up to CZK 312 at the beginning but then gradually declined to CZK 304.5 (+0.7%). On the other hand, CEZ excelled in the second half of the session, closing at CZK 835.1 (+1.6%).

NWR: Neutral (Analyst: Bohumil Trampota)
OKD (a part of NWR group) signed an agreement with trade unions stipulating a rise in tariff wages by 4% this year. Since a preliminary agreement on a wage rise had been signed already on 20 December 2010, this information is not new. The news came out during yesterday's trading session and we do not expect a large impact on today's trading.