Final Word from Thursday, March 18, 2004

Investors initially got rattled when Český Telecom announced that it expected to take a multibillion-crown charge against 2003 profits, but they've since driven the stock up by 15%. There was also initial nervousness when Eurostat released a figure this week of 12.9% of GDP for the public-sector deficit last year. The crown weakened, but analysts at Volksbank expect it to rebound soon. David Marek of Patria said it was good to get a transparent deficit figure, but he expects the really bad news to be a onetime thing. CNB Vice Gov. Oldřich Dědek told the BBC that public finances actually turned out fairly well last year. Overall confidence in the CR and its leading companies remains high. Telecom is tackling its problems from the past and is being rewarded by investors for doing so. Investors are patiently waiting for the Czech government to do the same thing.


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