Photo: ČTK/Šimánek Vít
PRAGUE - The survival of the Prague Stock Exchange depends on politicians' intervention in the semi-state energy group CEZ, he said today in Interview Petr Koblic, the exchange's chief executive officer, told Bloomberg. The turnover of the main PX index has fallen 87 percent since its peak in 2007 through the end of last year. CEZ is the largest publicly traded company in the EU's eastern wing. Its market value is around CZK 514 billion. The Czech government is trying to strengthen its control over the energy sector. It has been vague about its plans, but it risks eventually splitting up the energy firm and taking part of it off the market, the agency wrote.
After the energy crisis is over, the state "has no reason" to delist CEZ or its part from the stock exchange, Koblic said. He urged the government to stop seeking ownership of more power plants. He also urged it to sell part of its 70 percent stake in CEZ to help reduce the budget deficit and revive stock market trading.
Without CEZ shares, Koblice said, the Prague Stock Exchange would likely be excluded from emerging market indices and reclassified as a less developed peripheral market, which would cause an outflow of tens of billions of euros. Politicians now appear to be moving away from such an option, he said.
"The whole debate about whether the government should buy out the minority shares of ČEZ was completely misguided," Koblic said. "The worst scenario the market is facing now is some kind of split, where one part of CEZ would remain on the stock exchange, possibly with a much higher volume of freely traded shares, while the other part would be delisted," he said.
The Prague Stock Exchange has seen several exits in recent years, including drugmaker Zentiva, telecom group O2, coal miner New World Resources (NWR) and broadcaster Central European Media Enterprises (CME).
In an effort to slow the decline, it launched the Start platform for small companies, which has hosted 15 initial public offerings (IPOs) since 2018. One of its members (Gevorkyan) recently moved to the main market, and another company is set to follow. Koblic hopes this trend will encourage more start-ups to go public. The government should also consider an IPO of Prague International Airport, he says, while retaining a majority stake for strategic reasons.
"People keep saying the government could strengthen the capital market by listing more assets," Koblic said. "But other than the rest of CEZ and the airport, there's not much to offer," he added.
Due to speculations about various reorganization options and their potential impact on investors and the stock market, CEZ shares have shown greater fluctuations than other companies' shares since mid-2022. Today around 1:30 p.m. CET, the energy firm's shares gained 0.2 percent to CZK 956. They have fallen about 20 percent from their 15-year high reached last year.
The 87 per cent decline in the Prague Stock Exchange's turnover since 2007 contrasts with the 24 per cent rise in the US S&P 500 index and the 76 per cent rise in the main index of the Polish stock exchange.
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