Summary 5.9. – the week in Europe starts with a strong decline, when Russia admitted color regarding the non-renewal of gas supplies via Nord Stream 1, CEZ took it away from the BCPP, the koruna weakened in both major pairs, oil rises due to the surprising decision of OPEC+

The Prague Stock Exchange started the new week with slightly above-average liquidity, with a more pronounced decline, which followed the general stock development in Europe.

European markets weakened more strongly today due to fears of the further development of the continental energy crisis. Russian Gazprom already announced on Friday that it will not resume supplies through the key gas pipeline Nord Stream 1 after 3 days of shutdown. Initially, it stated that this was due to discovered defects in the key turbine ensuring the operation of the gas pipeline. Today, Moscow clarified that the operation will be restored when the Western sanctions against Russia end, because it is these sanctions that prevent the broken down key equipment from being put back into operation. Gas prices responded to the news by rising by a few tens of percent. Concerns about subsequent negative economic developments pushed stock markets into the red.

The market’s attention is also focused on the possibilities or proposals for solving the entire energy crisis, which are being leaked even before they are discussed by the European authorities. From the leaked proposals, it seems that the mainstream will probably go in a different direction than through gas prices, namely through price caps for all other sources. The ceiling would be set at €200. Electricity would continue to be sold at market price, but the entire amount above a certain level would be taken by the state as energy tax and used to pay compensation.

Of the sectors, car manufacturers did not fare the best today, as their aggregate index weakened by approx. 5%. The oil sector benefited from the significant rise in oil prices.


US stock markets are closed today for Labor Day.

At the beginning of the day, the euro fell below the level of 0.99 against the dollar, but settled just above this level as the day progressed.
Today, the koruna weakened significantly against the euro and even more significantly against the dollar.

Online usd/euro exchange rate chart
Online chart of the exchange rate of the euro
Online usd exchange rate chart

Oil rose more significantly today. In addition to the reaction to the above, the decision of the OPEC+ group to surprisingly reduce the overall production limit by a symbolic 100,000 barrels per day also significantly contributed to the price increase.
Honey is waiting.

Petroleum
Gold

BCPP weakened significantly today, primarily due to strong selling pressure on ČEZ shares, which are not well supported by the so far discussed or “leaked” proposals for solving the European and thus domestic energy crisis.

According to some comments, the proposed solution could mean, on the other hand, that there would be no need to use the concept of “extraordinary taxes on extraordinary unearned profits” and this apparently across all areas considered, which aroused some very cautious interest in the banking sector.

Kofola shares weakened more significantly today, which can be attributed to the announcement of the results for the 2Q of the year and the beginning of the approval of the dividend from the profit of 2021. Its amount is proposed at 11.3 CZK, while in the last 3 years it has always been at the level of 13.5 CZK.

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Commentary on daily market events and major news:

12.h – Europe weakens significantly due to non-resumption of supplies via Nord Stream 1, proposals for solving the entire crisis also leaked,

BCPP falls due to ČEZ, euro weaker, oil erases Friday’s losses

CR Moneta (Buy, 12m target = 104.6 CZK): We adjust the target price to 104.6 CZK per share and repeat our recommendation to Buy

The British Antitrust Authority approved the takeover of Avast. Last day on the London Stock Exchange September 9, September 26 at the latest financial performance

Kofola: Achieving the EBITDA profit outlook will enable savings and implemented price increases, VH approves divi 11.3 CZK

energy crisis Germany prepared a giant package of help with energy prices. Síkela is considering a state trader, and after ČEZ, EPH and Sev.en Energy will also receive help

Goldmani: The average Czech household will pay CZK 12,300/month for energy in 2023

The leaked EC proposal envisages capping prices from cheaper sources at the level of EUR 200

The EC is reportedly proposing price ceilings for the core and other resources – a ceiling level of EUR 200 was to be expected

The European Council calls for faster negotiations on solving the energy crisis

Brouillette (ex-US Secretary of Energy): European proposals for solving en. the crisis does not solve the essence. Money will move in a circle and it is also pro-inflationary

Russia says it cannot supply gas to Europe because of Western sanctions. When it is cancelled, there will be gas again

central banks Wages are growing faster than the central bank expected, what does this mean?
Petroleum The OPEC+ group surprised and agreed on a smaller reduction in production so far. Oil is rising
macro CR – average wages in 2Q grew by 4.4% y/y, but in real terms wages fell by 9.8%


Summary-59-the-week-in-Europe-starts-wit

Vladimir Urbanek

In the “industry” for more than 20 years. After several years of experience directly from securities trading, Vladimir Urbanek for the last more than 15 years, he has been covering domestic and foreign capital markets.

He considers the experience, or rather the possibility of comparison with the time before the last big crisis in 2008-9, to be important.

The article is in Czech

Tags: Summary week Europe starts strong decline Russia admitted color nonrenewal gas supplies Nord Stream CEZ BCPP koruna weakened major pairs oil rises due surprising decision OPEC

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