Final Word from Wednesday, March 26, 2014



ČEZ's share price has jumped by 6.7% since Finance Minister Andrej Babiš spoke in HN on Mon. about a 100% dividend payout this year, producing a real or paper profit for its shareholders of Kč 19.7bn. Of this amount, 69.78% goes to the state. Babiš bragged on Twitter about the state's paper profit. Jan Macháček of Respekt correctly wrote in HN today that Babiš should be careful about making such a price-sensitive announcement outside of shareholders' meetings, otherwise he could risk a lawsuit from minority shareholders. Good advice for Babiš, but it takes two to tango, and in this case Babiš's dancing partner is Macháček's publishing partner, Economia. It released the dividend information in its print and online editions on Monday morning. It didn't reveal when it received the information from Babiš, but it had enough time to speak with at least one stockbroker - Patria Direct - about the proposal and to quote its analyst Tomáš Sýkora. Thanks to Economia, Patria and others might have had a market advantage not afforded to everyone else. [Czech Republic Hospodářské noviny trading]

Glossary of difficult words

frontrunning - the unethical practice of a broker trading a share based on information from the analyst department before its clients have been given the information;

paper profit - an unrealized capital gain on an investment; gains (or losses) only become realized when the asset is sold;

price-sensitive information - information that, if made public, would likely have a significant effect on the price of a company's securities;

afforded to - provided or supplied to.

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