Prague bourse firms to 5-month high, adding 1.7% in week 36

Prague, Sept 7 (CTK) - Shares on the Prague Stock Exchange (BCPP) firmed last week thanks to the plan of the European Central Bank's (ECB), its headline PX index gaining 1.7 percent to a 5-month high of 968.4 points, according to data from the bourse.

The biggest gain was registered by Austria's Erste Group, while the biggest loser was developer Orco.

In the previous week, the BCPP rose by almost 1 percent.

"The first week of September was influenced by Thursday's meeting of the European Central Bank. Despite expectations, the ECB did not cut interest rates. The decisive impulse was the presentation of a plan for purchase of bonds of problematic countries. Even though the plan did not bring any surprise, financial markets reacted very strongly. European shares grew by 3-4 percent and their indices hit five-month highs," J&B Bank analyst Milan Vanicek said.

The most growing title on the Prague bourse was Austria's Erste Bank with a rise of 9.6 percent to Kc434. It benefited from the growth of the entire banking sector in Europe in reaction to the steps announced by the ECB.

Media company CME gained 6.8 percent to Kc119. The firm announced it would sell bonds mature in 2016 in a total nominal value of EUR104m.

Orco erased 22.7 percent to Kc40. The reason is the admission to trading of 65 million new shares that creditors received within the restructuring of the company's debt. Some creditors started to sell these shares to gain at least a part of their claims back.

The beginning of next week may be characterised by a continuing positive reaction to the ECB plans. Then the attention will focus on the meeting of the US central bank Fed in the middle of the week. On Friday, a meeting of euro zone finance ministers should take place, followed by a meeting of EU finance ministers on Friday.

It is possible that Spain will ask for aid on Thursday's meeting, which would mean a start of purchases by the ECM.

"All these factors together should give a slightly positive impulse to markets," Vanicek said.