Equities: Strict cost control behind good CEVT results

Macro, FX, Rates: Zloty's sell-off calms

(PL) Politics, FX: The Polish zloty has some found ground yesterday as domestic political tensions eased after President Duda's announced his decision to veto two of three laws, which could lead to a controversial reform of the Polish Justice. Under the reform the government could easily replace all judges of the Supreme Court, which was heavily criticized by the European Commission. As a result of president's decision the EUR/PLN dropped four figures (from 4.27 to 4.23), but it has been trading back at around the 4.25 level. Clearly, the market does not think that the crisis is over, although the presidential veto can be overruled by a threefifths majority vote in the presence of at least half of the statutory number of members of the Sejm (230). Recall that the ruling Law and Just has only 234 of deputies in the Sejm, which has 460 members (hence, quite clearly short of the three-fifths).

Nevertheless, the Polish forex market might still wait whether the presidential veto will be really applied (Polish president has now three weeks to do in formal way). Meanwhile, the zloty (like other emerging markets) could also face some uncertainty ahead tomorrow's FOMC meeting.

Equities: Strict cost control behind good CEVT results

(CZ) CEVT: CME released its 2Q17 results, which were a notch above estimates on the operating lines, fuelled by a strict cost control. Czech and Slovakian markets performed well, while a first signs o recovery starting to be visible in Bulgaria, what is positive news. On the other hand Romanian's growth decelerated significantly. Hence, a recovery of Czech and Slovakian operation continued also in 2Q17 with like-for-like revenues growing 5.0% y/y and 11.3% y/y respectively (in local currencies). On the other hand Romanian's growth decelerated significantly (+2.3% y/y vs. +25% y/y seen in 1Q17). Bulgaria posts 3.5% l-f-l revenues growth, printing the first signs of recovery.

Recall that the OIBDA line was positively affected by benefits from finished restructuring process, 1% contents costs decline and 14% other operating costs decline (y/y). As a consequence, OIBDA beat market consensus by 4.3% and offset a bit weaker core revenues (1.1% below estimates).

Last but not least, net profit was supported by lower interest costs (down from USD 29.5mn to USD 21.9mn) on refinancing of high yield notes.\

(PL) MIL: Bank Millennium reported net income for the 2Q that beat the highest analyst estimate. 2Q net income reached PLN 173.6mn, beating 6% the market consensus. The positive surprise comes fully on the 2.5% NII beat.

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