Overview of the latest economic events in the Czech Republic

The Prague Stock Exchange started the new week with a significant decline. Index PX lost 0.95 percent on Monday to close at 2,673.83 points. The main drivers of the fall were shares of the arms and machinery group Czechoslovak Group (CSG) a energetické firmy ČEZ. The Czech koruna weakened against both major world currencies - the euro and the US dollar - with the movement reflecting the generally negative mood on European markets.

The Czech nuclear power industry has seen two key news. Korean company KHNP submitted tens of thousands of pages of conceptual design for two new nuclear units at the Dukovany power plant, thus meeting the first contractual milestone of the design documentation.

Project investor, company Dukovany II Power Plant (EDU II), will now begin a several-week documentation review involving some 60 in-house experts and technicians from the company Energoprojekt Praha. The first new Dukovany unit should be completed in 2036. At the same time, Minister of Industry and Trade Karel Havlicek announced that the state will sign a contract with the ČEZ Memorandum of Cooperation for the construction of small modular reactors. The reactors are being developed by a British company Rolls-Royce SMR, co-owned by a Czech group ČEZ with a share of approximately 20 percent. In mid-April, Rolls-Royce SMR entered into an agreement with a UK government organisation Great British Energy - Nuclear to build three reactors on the Isle of Anglesey in Wales. Up to six reactors of this type are planned for the Czech Republic in the future.

Foreign investment

The biggest Czech investment news of the day is the expansion move of the energy group Premier Energy, which, through the investment fund Emma Capital is controlled by Czech businessman Jiří Šmejc. Group signs agreement to acquire Romanian distribution network Evryo Group for 700 million euros, or roughly 17.1 billion crowns.

The key asset of the acquired group is the company Distributie Energie Oltenia (DEO), the third largest electricity distribution network in Romania, which supplies approximately 1.5 million customers in the southwestern region of Oltenia and operates a network of approximately 80,000 kilometres of lines. The seller is an Australian investment company Macquarie Asset Management, which Evryo has owned since 2021.

Completion of the transaction is pending shareholder approval at the Annual General Meeting Premier Energy scheduled for June 10 and regulatory approval; financial close is expected in the second half of this year. The acquisition completes the entire vertical energy chain - generation, distribution and supply - for the group in the Romanian market, where Premier Energy has lacked distribution to date.

Last year, the Group also bought the Spanish energy company Iberdrola 51% stake in a wind farm in Hungary for €128 million, confirming its strategy to build a diversified regional energy portfolio in Central and Eastern Europe.

Significant events outside the Czech Republic with global impact

Ceny ropy are down on Tuesday, April 21, reversing sharp gains from the previous day. Expectations that peace talks between the United States and Iran will take place this week in Islamabad, Pakistan, are behind the decline. Vice President J.D. Vance, along with negotiators Steve Witkoff and Jared Kushner, are expected to move to Pakistan to begin a second round of talks. Markets reacted to news of the impending diplomatic contact by immediately easing fears of another Gulf supply shortfall. Although the prospect of negotiations is pushing down oil prices, analysts warn that physical oil supplies remain tight and any failure of negotiations could shoot prices up again.

The geopolitical tensions associated with the Strait of Hormuz - through which roughly one-fifth of the world's oil supplies pass under normal conditions - remain a key factor for the global economy and Czech industrial competitiveness. The Ministry of Industry and Trade is finalising a crisis energy resilience plan in case of deepening outages. Analysts at Trinity Bank and XTB warn that prolonged conflict could trigger a stagflation scenario - a combination of slowing economic growth and inflationary pressure from energy prices. The earnings season for large companies, on the other hand, brings cautious optimism: strong economic results, particularly from the technology sector, where demand for AI infrastructure remains robust, are supporting stock market stability despite geopolitical turbulence.

gnews.cz - GH

Pozn.: YTD (Year-to-Date) comparison of results since the beginning of this year; YoY (Year-over-Year) comparison with the same period last year

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