Czech Equity Daily: 29/12/09; Unipetrol

Index PX: 1,114 points (up 0,8 % d/d), volume: 446 mn CZK (24 mn USD)

Market comment:

We had a quiet trading session yesterday with the index PX in green field for the whole day ending with +0.8% d/d. The positive mood came from abroad. The best performer during the day was CETV but at the end it lost steam and ended the day with +1.5% at 430 CZK. The commodity markets and its growth helped the mining sector with NWR showing +1.6% to 160.5 CZK. CEZ added 1.2% to 872 CZK. Banking sector was rather on the sideline for yesterday with Erste Bank closing at 690 CZK (+1.1%) and KB at 3920 CZK (+0.4%). Telefonica could not escape the level of 420 CZK.

Unipetrol: Neutral. LT: Buy. Target price: 164 CZK.

According to the local Hospodarske Noviny daily, Russia warned that it could be possible that due to unfinished Russia vs. Ukraine talks about crude oil transit conditions it could stop deliveries to Europe. The daily further adds that the Slovak government administration acknowledged that it was warned by a letter from European commission. The Czech Republic has crude oil reserves for three months according to industry ministry and the Ingolstadt pipeline could be used. We view the news as neutral in this stage and we also expect that the dispute will be solved.