WOOD Flash – Czech Republic macro: a preference for balanced growth at the cost of PX performance
Monetary and fiscal policies have appeared, at times, conflicting and unusually hard to assess by market participants this year, which has resulted in increasing questions about the genuine commitment of the CNB to fight inflation and the sizeable losses in the Prague Stock market PX Index. It appears, to us, that this phase is coming to an end, and renewed consistency should emerge, which would be conducive for currency stability against the EUR and would continue to nourish brisk, medium-term domestic demand, because the cost of capital should remain low compared with its peers and modestly above that of the core Eurozone countries, but with higher inflation and a higher GDP growth profile. However, residential real estate prices are likely to suffer from persistent higher mortgage rates and the stock market performance will be held back by extraordinary taxes, while the benefits from digitalisation penetration will not show yet.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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