BCPP's future hinges on politicians' interference in CEZ, says CEO

Prague, Jan 15 (CTK) - The survival of the Prague Stock Exchange (BCPP) depends on politicians' interference in the semi-state energy group CEZ, Petr Koblic, the exchange's CEO, told agency Bloomberg in an interview today.

The turnover of the BCPP's headline PX index fell 87 percent between its peak in 2007 and the end of last year. CEZ is the largest publicly traded company in the EU's eastern wing with a market value of some Kc514bn.

The Czech government is trying to strengthen its control over the energy sector. It has been vague about its plans, but there is a risk that it will eventually split CEZ and take part of it off the market, the agency wrote.

After the energy crisis subsides, the state has "no reason" to delist CEZ or part of it, Koblic said, urging the government to stop seeking ownership of more power plants and to sell part of its 70 percent stake in CEZ to help reduce the budget deficit and revive stock market trading.

Without CEZ shares, the Prague Stock Exchange would likely be removed from emerging market indices and reclassified as a less developed frontier market, leading to outflows of tens of billions of euros, Koblic said

Politicians now appear to be moving away from such an option, he said.

According to Kolbic, the debate about whether the government should buy out minority shares in CEZ was completely misguided.

"The worst-case scenario facing the market right now is some sort of a split, in which one part of CEZ would remain listed, possibly with a much higher free float, while the other part would be delisted," he said.

The Prague Stock Exchange has seen several exits in recent years, including drugmaker Zentiva, telecoms group O2, coal miner New World Resources (NWR) and broadcaster Central European Media Enterprises (CME).

In an effort to slow the decline, the exchange has launched the Start platform for small companies, which has hosted 15 initial public offerings (IPOs) since 2018. One of its members, Slovak industrial company Gevorkyan, has recently moved to the main market, and another company is set to follow. Koblic said he hoped this trend would encourage more start-ups to go public, adding that the government should also consider an IPO of Prague's international airport while retaining a majority stake for strategic reasons.

Although people say the government could boost the capital market by floating more assets, other than the rest of CEZ and the airport, there is not much to offer, Koblic added.

Because of speculation about different reorganisation options and their potential impact on investors and the stock market, CEZ shares have shown more fluctuations than those of other companies since mid-2022. The energy firm's shares gained 0.2 percent to Kc956 at around 13:30 CET today. They have fallen about 20 percent from their 15-year high reached last year.

hel/er