Equities: CEZ releases 2016Q4 results tomorrow

KBC Market Research Desk KBC Bank

Regional Overview

Macro, FX & Rates: CNB continues to intervene heavily

(CZ) The Czech National Bank continues to intervene heavily against the koruna appreciation. In March, the volume of excess liquidity that is being withdrawn from the Czech banking system has already increased by about CZK 220bn (approx. EUR 8.15bn). Speed of CNB liquidity accumulation has so far been only faster in January 2017.

Equities: CEZ releases 2016Q4 results tomorrow

(CZ) CEZ: Company releases 4Q16 results tomorrow B/Mkt. We expect revenues to be c.15% lower y/y with a lower average achieved baseload electricity price (35.0 EUR/MWh in 2016 vs 39.5 EUR/MWh in 2015). This negative price-effect should be only partly mitigated by a higher planned generation volume of coal power plants (FY16 target +6% y/y). / We downgraded CEZ to Reduce from Accumulate with target price down to CZK 395/shr from CZK 555/shr. We expect CEZ is to increase its pay-out ratio to 60-100% of adjusted net income (from 60-80%) and propose the dividend of 30-33 CZK per share this April. Nevertheless, the Ministry of Finance might reject CEZ proposal at AGM (June) and approve own proposal of a higher dividend (CZK 40/share);

(HU) OTP: Company proposed HUF 190/shr from 2016 profit. / NEUTRAL. Proposed dividend is fully in line with market consensus at HUF 192/shr and translates into 2.2% yield.

	LAST	PREVIOUS	CHANGE (%)
EURCZK	27.02	27.02	0.00
EURHUF	308.9	308.2	0.21
EURPLN	4.284	4.281	0.07

	LAST	PREVIOUS	CHANGE (bps)
CZGB 10Y	0.907	0.908	-0.1
HUGB 10Y	3.61	3.60	0.3
PLGB 10Y	3.73	3.73	0.0

	LAST	PREVIOUS	CHANGE (%)
PX	980.8	980.8	0.00
BUX	32778	32778	0.00
WIG	60441	60441	0.00

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KBC Market Research Desk

KBC Bank

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