BCPP weaker again as CEZ shares plummet over possible split

Prague, May 18 (CTK) - The Prague Stock Exchange (BCPP) weakened again for the sixth time in a row due to a fall in shares of energy group CEZ, the headline PX index writing off 1.78 percent to 1,316.21 points, according to information on the BCPP's website.

CEZ shares fell by 8 percent to Kc1,041 today. The sharp drop was a reaction to a government bill that paves the way for a split of the key semi-state firm into fully state-owned and private parts, according to economists.

On Wednesday, the Czech government approved a bill that lowers the required majority of shareholder votes for corporate and cooperative conversions.

Instead of the previously required 90 percent of the votes of all shareholders, 75 percent of the votes of shareholders present at the general meeting should now be enough to split the company, while increasing the quorum to more than two thirds of the share capital.

The government is planning to restructure CEZ, with one of the options being its division, Prime Minister Petr Fiala said earlier. The aim should be for the state to gain control over the energy infrastructure.

Shares in CEZ, in which the state now holds 70 percent, have already weakened in previous days, and today the drop was even more pronounced.

"This is a reaction to the government's new proposal on corporate and cooperative transformations ...," said Komercni banka analyst Bohumil Trampota.

CEZ lost Kc46bn of its market value today alone, economist Lukas Kovanda said.

The PX index lost despite today's above-average trading volume of Kc1.3bn, with CEZ shares being traded the most, at around Kc1.1bn.

Komercni banka also weakened, with its shares falling by 0.61 percent to Kc656. Moneta Money Bank wrote off 0.25 percent to Kc78.40, and arms maker Colt CZ, solar power plant builder Photon Energy and pharmacy chain Pilulka also ended in the red today.

On the other hand, Austria's banking group Erste shares fared well, rising by 0.43 percent to Kc727.10. Austria's insurer VIG rose by 0.98 percent to Kc620, and tobacco company Philip Morris increased by 0.85 percent to Kc16,600 apiece.

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