The Prague Stock Exchange fell for the third time in a row, Moneta shares dragged it down

Commercial presentation Update: 26/04/2024 17:36
Issued by: 26/04/2024, 17:36

Prague – Today, the Prague Stock Exchange fell for the third time in a row, the PX index lost 0.98 percent and closed trading at 1543.38 points. The stock market was dragged down by the shares of Monety Money Bank, which lost more than six percent. This follows from the exchange’s website. The Czech koruna ended almost unchanged against the euro, weakening slightly against the dollar.

The PX index fell today, unlike most other European stock exchanges, Komerční banka analyst Bohumil Trampota pointed out. He agreed with other analysts that Moneta’s securities, which were traded today on the first day without entitlement to last year’s dividend, had a decisive influence on this. They weakened by 6.19 percent to 97 crowns.

“If, of course, we take into account the dividend payment of nine crowns per share, Moneta’s shares actually recorded the largest increase of all major titles, namely by 2.75 percent,” pointed out Wood & Company broker Vladimír Vávra.

The securities of the insurance company VIG also deteriorated by 2.02 percent to 728 crowns, but most of the main stock titles on the Prague Stock Exchange finished with gains today. From bank issues, Erste Bank added 0.22 percent to 1,116 crowns, and Komerční banka added 0.06 percent to 862 crowns.

According to Martin Singer from Fio banka, the positive mood on the European stock exchanges also affected the shares of the energy company ČEZ, which improved by 0.65 percent to 854.50 crowns. The securities of the drone manufacturer Primoco strengthened by 1.69 percent to equal 900 crowns, and the drinks manufacturer Kofola rose by 0.37 percent to 272 crowns. The shares of the tobacco company Philip Morris rose by more than one percent to 15,960 crowns.

The exchange rate of the koruna changed only minimally today. Against the euro, the Czech currency strengthened by a penny to 25.16 CZK/EUR compared to Thursday’s close. On the contrary, the Czech currency weakened by two pennies against the dollar, at 17:00 it was trading at 23.52 CZK/USD, according to the Patria Online server.

During the day, the koruna strengthened significantly against the euro. “It attacked up to the level of 25.09 CZK/EUR, where it was last on February 8, 2024, i.e. more than two months ago,” said Purple Trading analyst Jaroslav Tupý. According to him, the koruna reacts by strengthening mainly to the change in the estimate of the rate of reduction of the basic interest rate in the Czech Republic. The market assumed a gradual reduction of the interest rate by at least half a percentage point at the individual next meetings of the banking board of the Czech National Bank (ČNB).

“With the increasing number of central bankers at the last two meetings who voted for a faster rate reduction of 75 basis points, it even seemed that this chance was in play. But now everything seems to be different,” said Tupý. He pointed out that central bankers, including Governor Aleš Michl, are very cautious about lowering the interest rate.

Even Tomáš Holub, who voted for a 0.75 percentage point cut at the last meeting of the bank board, is now leaning towards a slower and cautious reduction of the base interest rate. “The reason is the concern in the US about the return of inflation and its increase, as well as the level of domestic inflation in the service sector, which does not show a decrease and represents a significant pro-inflationary risk,” the analyst added.

The next meeting of the CNB Board will take place on May 2. At its last meeting in mid-March, the board cut the key interest rate by half a percentage point to 5.75 percent. Two of the seven members of the bank board proposed a rate drop of up to 5.5 percent.

The CNB started easing its monetary policy last December, when in the first step it lowered the base interest rate by a quarter of a percentage point to 6.75 percent. Before that, rates were unchanged at seven percent for a year and a half. In February of this year, the CNB accelerated its rate reduction, when it went for a decrease of half a percentage point.