HELENA HORSKA, ANALYST, RAIFFEISENBANK
"An exceptionally low dividend outflow was behind the
result."
"The positive news is offset by an outflow on the capital
account, which is perhaps the biggest outflow since 2003 when
record started. The outflow is mainly due to low interest rates
and yields on the domestic market."
PETR DUFEK, ANALYST, CSOB
"The positive result is thanks the fact that almost no
dividends were paid out. This is why I consider this result as
exceptional and unrepeatable. In the next months dividends will
again show their effect and the current account will slide to a
deficit. For the whole year, it will be a deficit of around 1
percent of GDP."
"It is good news for the crown although the debt crisis in
Europe will likely have a stronger effect.
MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
"It is a big surprise for the market because the surplus is
big."
"I think the surprise is on the side of income balance;
there is only a 6 billion crown deficit and we had expected a
deficit of more than 20 billion. Maybe it is due to that there
are lower (company) profits and lower repatriated revenue to
foreign owners."
"I would expect that maybe we will see a worsening trade
balance because of higher imports and worsening in the commodity
balance."
"Overall I think we will see a deficit of about 1 percent of
GDP this year."
MARKET REACTION: The crown <EURCZK=> was little changed
following the data at 25.42 per euro.
DETAILS:
- Capital outflow on the financial account was around 20.4
billion crowns under the ECB methodology.
- The net inflow of direct investment stood at 3.9 billion and
was affected by the expected reinvested earnings.
- The inflow of portfolio investment of 32.3 billion crowns was
related primarily to bond issues of Czech entities abroad.
- The total volume of bond issues abroad amounted to
approximately 34 billion crowns.
- The annual net direct investment inflow total, in the
longer-running trend, was flat.
-The annual net portfolio investment total, in the
longer-running trend, has been showing an increasing inflow of
funds.
- Other investment showed a deficit of 57.9 billion crown, due
to a change in the international position of banks (a rise in
short-term assets).
- The main reason for a rise in banks' assets was chiefly an
increase in foreign currency deposits of Czech entities (among
other things by foreign exchange income from foreign bond
issues).
- The Czech central bank international reserves adjusted for
valuation changes fell by 1.7 billion crowns.
BACKGROUND:
- Analyst expectations before data release [ID:nLDE6520EV','yes')">ID:nPRA005110)
COMMENTARY:
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"The news could support the crown exchange rate. This
confirms that the current account should develop favourably this
year. It is possible that this part of the balance of payments
will even reach a surplus this year, which would be the first
time in the history of the Czech Republic."
HELENA HORSKA, ANALYST, RAIFFEISENBANK
"An exceptionally low dividend outflow was behind the
result."
"The positive news is offset by an outflow on the capital
account, which is perhaps the biggest outflow since 2003 when
record started. The outflow is mainly due to low interest rates
and yields on the domestic market."
PETR DUFEK, ANALYST, CSOB
"The positive result is thanks the fact that almost no
dividends were paid out. This is why I consider this result as
exceptional and unrepeatable. In the next months dividends will
again show their effect and the current account will slide to a
deficit. For the whole year, it will be a deficit of around 1
percent of GDP."
"It is good news for the crown although the debt crisis in
Europe will likely have a stronger effect.
MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
"It is a big surprise for the market because the surplus is
big."
"I think the surprise is on the side of income balance;
there is only a 6 billion crown deficit and we had expected a
deficit of more than 20 billion. Maybe it is due to that there
are lower (company) profits and lower repatriated revenue to
foreign owners."
"I would expect that maybe we will see a worsening trade
balance because of higher imports and worsening in the commodity
balance."
"Overall I think we will see a deficit of about 1 percent of
GDP this year."
MARKET REACTION: The crown <EURCZK=> was little changed
following the data at 25.42 per euro.
DETAILS:
- Capital outflow on the financial account was around 20.4
billion crowns under the ECB methodology.
- The net inflow of direct investment stood at 3.9 billion and
was affected by the expected reinvested earnings.
- The inflow of portfolio investment of 32.3 billion crowns was
related primarily to bond issues of Czech entities abroad.
- The total volume of bond issues abroad amounted to
approximately 34 billion crowns.
- The annual net direct investment inflow total, in the
longer-running trend, was flat.
-The annual net portfolio investment total, in the
longer-running trend, has been showing an increasing inflow of
funds.
- Other investment showed a deficit of 57.9 billion crown, due
to a change in the international position of banks (a rise in
short-term assets).
- The main reason for a rise in banks' assets was chiefly an
increase in foreign currency deposits of Czech entities (among
other things by foreign exchange income from foreign bond
issues).
- The Czech central bank international reserves adjusted for
valuation changes fell by 1.7 billion crowns.
BACKGROUND:
- Analyst expectations before data release [ID:nLDE6520EV
]
- Czech April foreign trade figures [