The Prague Stock Exchange strengthened again on Tuesday, improving its nearly six-month high — the PX index gained 1.04 percent. Markets are anxiously awaiting tomorrow's CNB board meeting, with analysts unanimously expecting rates to be held at 3.75 percent. Analysts have issued a new investment recommendation for Komerční banka shares with a target price of 1,043 crowns. Colt CZ received an upgrade from analysts following a recent share price decline. This week offers a packed macroeconomic calendar — in addition to the CNB, data on industrial output, foreign trade and construction work prices are due.
The Prague Stock Exchange strengthened again on Tuesday, improving its nearly six-month high. The PX index rose 1.04 percent to 2,766.09 points. Most major stocks gained, while shares of Moneta, Philip Morris and Primoco ended in the red. Trading volume increased to around 650 million crowns, slightly below the long-term average.
The CNB Board meets tomorrow, Thursday 6 August. Analysts unanimously expect the central bank to leave the benchmark repo rate unchanged at 3.75 percent, where it was raised in June. CNB board member Jan Kubíček signalled last week that the possibility of further rate hikes remains open, but that he sees no reason to rush. He regards the market scenario of up to three additional rate hikes by year-end as excessive. For the August decision, the key factors will be developments in core inflation, wages, credit activity and property prices.
Analysts have issued a new investment recommendation for Komerční banka shares with a target price of 1,043 crowns and an accumulate recommendation. Following the publication of its half-year results at the end of July, the bank is trading slightly below this target, and the market views it as a stable dividend stock with solid prospects for the second half of the year.
Colt CZ shares have fallen in recent weeks from levels around 1,060 crowns to the 1,000-crown mark, approaching analysts' target price. In response to this development, analysts upgraded their investment recommendation on the arms maker, pointing to a solid core business and growth prospects for defence sector orders.
The macroeconomic calendar is packed this week. In addition to Thursday's CNB meeting, data on industrial output, foreign trade and construction work prices are due. Investors and analysts will be watching these indicators as a signal of how the Czech economy is developing in the third quarter of the year.
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