Activity on the Prague bourse in recent days can hardly be described as calm holiday trading. After a strong fall last Monday, Czech shares showed a sharp growth on Thursday, with the headline index PX rising a whopping 4.66% in a single day.
Such activity made prices in Prague the fastest-growing among the world’s major stock markets. Czech shares have been successful in the long-run as well. Over the past month, stock prices have risen 30%, making Prague the second-fastest firming stock market in the world behind Bulgaria.
In the past six months, Czech shares have added 68%, ranking fifth on the global ladder.
“Central Europe is starting to be attractive for investors. They are selling Asian stocks and using the money to buy securities in our region,” said Ronald Schubert, stock broker at Patria Finance. Asian stock exchanges were the biggest gainers in previous months, and investors have started searching for profits in other areas as well.
“Several strong players from the west helped the bourse, buying NWR and Komerční banka shares, for example,” Petr Čaputa of BH Securities said of Thursday’s trading.
Small Czech investors traded as well. The RM-System, which specialises almost exclusively in retail clients, experienced the largest volume of trading in history last Thursday, when shares worth CZK 136.8 million changed hands. Trading on the Prague bourse hovered around the average, reaching CZK 3.8 billion.
Like other shares, those traded in Prague benefited from news from the UK and Germany that showed surprising growth in the second quarter.
A Bloomberg news agency survey has revealed that a further increase in share prices over the next six months is expected in seven countries, including Great Britain, France and Japan.
Still a hefty growth on stock markets can be quickly followed by another fall. Some economists, like Merrill Lynch chief analyst Mary Bartels, believe that shares can keep on strengthening, while others warn that a drop is in sight. Chris Zook of CAZ Investments said he expects shares in the US to fall as much as 20% if the bourse does not quickly break through this year’s highs.