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Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

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WEEKLY SUMMARY May 30 - June 3, 2011 Close w/w (%) 3M (%) YTD (%) y/y (%) 52W Low 52W High PX 1,232 -0.6 0.1 0.6 #N/A 1,100 1,276 CZK/EUR 24.33 0.8 0.2 3.3 6.4 23.99 26.02 CZK/USD 16.63 3.0 6.5 13.8 28.1 16.27 21.81 PRIBOR 6M 1.56% 0bp -1bp 0bp 3bps 1.47% 1.58% 10Y GB 3.75/20 3.64% -11bps -33bps -27bps -66bps 3.23% 4.35% Prague Stock Exchange Close w/w (%) AAA Auto 25.0 -2.4 CME 348 -6.3 CEZ 900 -3.2 ECM 33 -4.9 Erste 843 0.9 Fortuna 134 3.8 KB 4,100 1.1 KITD 199 -5.2 NWR 240 -12.3 Orco 218 -4.6 Pegas 446 1.1 PMCR 9,460 2.3 TEF 417 1.3 Unipetrol 181 0.2 VIG 958 -0.4 Equity Bonds CZK m 9,168 9,087 EUR m 374.4 371.6 Source: Bloomberg, PSE, ATLANTIK FT HEADLINES ONE-WEEK OUTLOOK CEZ - Shutdown at Temelin extended - Ex-dividend day - Managers sell company shares Pegas - Investment in Egypt worth EUR 55-60m NWR - Majority owner to sell up to 16m shares - Third closing date of share-for-share offer Fortuna - Last cum-dividend day - Offer for lottery activities of Sazka Economy - Weaker industrial output in April - Trade balance surplus offset by high crude oil prices Given the unfavourable macroeconomic data released last week (especially US monthly unemployment report) and the absence of new events, we still expect to see negative sentiment and potential profit-taking this week. Fortuna is going ex-dividend today, 6 June (EUR 0.3 per share; 5.7% gross. div. yield). The situation around Sazka will be still monitored, with a potential impact on Fortuna; however, that should be already priced in. In case of CEZ, there will be on external factor German parliament is to decide today on the future of the nuclear energy programme. NWR should know the outcome of the FTSE committee's review of the index on Wednesday (8 June). The effect of potential inclusion of NWR in the index should be seen on 17 June. Due to an additional supply of shares by majority owner BXR of up to 16m pieces (6.1% of the company's value), we consider this factor neutral without an impact on the stock price. Concerning macroeconomic events, the upcoming week will be just the opposite of the previous week as regards the number and the importance of macroeconomic releases. Markets will probably follow FED's Beige Book (Wednesday), which assesses the US economy and provides an economic outlook. In Europe, the ECB meets on Thursday. The interest rates are expected to be left unchanged at 1.25%. The central bank's commentary will be followed. For the time being, market expects interest rates to be raised at the next meeting in July. 1,100 1,150 1,200 1,250 1,300 0 1,000 2,000 3,000 4,000 6/05 13/05 20/05 27/05 3/06 Index CZK m PX
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Page 1: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

WEEKLY SUMMARY May 30 - June 3, 2011

Close w/w (%) 3M (%) YTD (%) y/y (%) 52W Low 52W High PX 1,232 -0.6 0.1 0.6 #N/A 1,100 1,276 CZK/EUR 24.33 0.8 0.2 3.3 6.4 23.99 26.02 CZK/USD 16.63 3.0 6.5 13.8 28.1 16.27 21.81 PRIBOR 6M 1.56% 0bp -1bp 0bp 3bps 1.47% 1.58% 10Y GB 3.75/20 3.64% -11bps -33bps -27bps -66bps 3.23% 4.35%

Prague Stock Exchange Close w/w (%) AAA Auto 25.0 -2.4 CME 348 -6.3 CEZ 900 -3.2 ECM 33 -4.9 Erste 843 0.9 Fortuna 134 3.8 KB 4,100 1.1 KITD 199 -5.2 NWR 240 -12.3 Orco 218 -4.6 Pegas 446 1.1 PMCR 9,460 2.3 TEF 417 1.3 Unipetrol 181 0.2 VIG 958 -0.4

Equity Bonds CZK m 9,168 9,087 EUR m 374.4 371.6 Source: Bloomberg, PSE, ATLANTIK FT

HEADLINES ONE-WEEK OUTLOOK CEZ - Shutdown at Temelin extended

- Ex-dividend day

- Managers sell company shares

Pegas - Investment in Egypt worth EUR 55-60m

NWR - Majority owner to sell up to 16m shares

- Third closing date of share-for-share offer

Fortuna - Last cum-dividend day

- Offer for lottery activities of Sazka

Economy - Weaker industrial output in April

- Trade balance surplus offset by high crude oil prices

Given the unfavourable macroeconomic data released last week (especially US monthly unemployment report) and the absence of new events, we still expect to see negative sentiment and potential profit-taking this week.

Fortuna is going ex-dividend today, 6 June (EUR 0.3 per share; 5.7% gross. div. yield). The situation around Sazka will be still monitored, with a potential impact on Fortuna; however, that should be already priced in.

In case of CEZ, there will be on external factor – German parliament is to decide today on the future of the nuclear energy programme.

NWR should know the outcome of the FTSE committee's review of the index on Wednesday (8 June). The effect of potential inclusion of NWR in the index should be seen on 17 June. Due to an additional supply of shares by majority owner BXR of up to 16m pieces (6.1% of the company's value), we consider this factor neutral without an impact on the stock price.

Concerning macroeconomic events, the upcoming week will be just the opposite of the previous week as regards the number and the importance of macroeconomic releases. Markets will probably follow FED's Beige Book (Wednesday), which assesses the US economy and provides an economic outlook. In Europe, the ECB meets on Thursday. The interest rates are expected to be left unchanged at 1.25%. The central bank's commentary will be followed. For the time being, market expects interest rates to be raised at the next meeting in July.

1,100

1,150

1,200

1,250

1,300

0

1,000

2,000

3,000

4,000

6/05 13/05 20/05 27/05 3/06

IndexCZK m PX

Page 2: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

EQUITY MARKET – PRAGUE STOCK EXCHANGE

MARKET NEWS The first week of June was marked by weak macroeconomic data, which triggered profit-taking. The domestic market was no exception. The PX Index closed the week at 1,232 points, down 0.6% w/w. Investors followed US macroeconomic data and rating agencies' announcements. For example, Moody´s mentioned a potential US rating downgrade if no agreement is reached on budgetary needs and gradual budget deficit cuts. The anticipated US monthly unemployment report came in below expectations (54 thousand jobs vs. exp. +162 thousand). The local market monitored events around Sazka, which showed up in the stock price of Fortuna. The stock almost reached CZK 150 during the week, finishing at CZK 134 (+3.8% w/w) as the biggest gainer of the week. NWR, by contrast, was the most declining stock (-12.3% to CZK 240.3) after BXR (majority owner of NWR) offered up to 16m shares for sale to meet investors' demand in anticipation of potential inclusion of the stock in the FTSE 250 index. As a result, the positive effect of higher demand upon the potential inclusion was counterbalanced. In addition, the upcoming IPO of Polish peer JSW (end of June) could be a potentially negative factor.

Index Close w/w (%) 3M (%) YTD (%) y/y (%) 52W Low 52W High PX 1,232 -0.6 0.1 0.6 8.5 1,100 1,276 Wien (ATX) 2,764 0.6 -4.3 -4.8 21.9 2,217 3,001 Warsaw (WIG 20) 2,884 0.6 7.1 4.6 22.5 2,271 2,933 Budapest (BUX) 23,076 0.1 1.5 8.4 8.4 20,221 24,451 Euro Stoxx50 2,789 -1.1 -6.5 -0.6 9.2 2,508 3,068 Dow Jones 12,151 -2.3 0.8 5.0 22.3 9,686 12,811 S&P500 1,300 -2.3 -0.5 3.4 22.1 1,023 1,364 Nasdaq 2,733 -2.3 -0.2 2.6 23.1 2,092 2,874

COMPANY NEWS CEZ The ongoing shut-down of the 2

nd unit of Temelin will be extended by two weeks vs. the original plan. The delay is

due to technical problems. We had already informed about this last week and consider the news neutral. CEZ's shares went ex-dividend on 3 June. The dividend approved by the general meeting from 2010 profit is CZK 50/share (5.30% gross div. yield). The dividend record day is on 7 June and the payment day falls on 1 August. According to the Czech National Bank, CEZ's managers sold in aggregate 450,000 shares of the company from 27 May to 1 June 2011. CEO Martin Roman was one of the sellers. Sale of shares by members of management could be perceived negatively by the market but we believe that given the significant stock price growth in the past few months such sale could be expected.

Pegas Nonwovens Pegas Nonwovens announced an investment in a new production facility in Egypt. Initial costs are estimated to reach EUR 55-60m. The investment depends on an agreement with a major customer, which is interested in the company's production in the Middle East. The contract should be signed within the next few months. According to a press release, in the first phase, Pegas plans to build a production line with an annual capacity of 20kt, which should be launched in 2H 2013. If markets conditions are favourable, a second line could be added (2015-2016). Details about how the acquisition will be funded were not released but the funding should be done through own sources or bank loans. We do not expect a share issue. The investment should not jeopardize the progressive dividend policy of the company, as confirmed in the 1Q11 conference call. A new production facility will be an entry point for the company to North Africa, Middle East and Asia markets. We regard the deal as the right investment decision.

NWR NWR announced that as at 1 June (4 p.m. CET), the third closing date of the share offer, it received acceptances in respect of 2,174,475 shares. Total acceptances represent almost 99% of the issued shares. Trading in the new shares started on 2 June in London and Prague and on 3 June 2011 in Warsaw. As a reminder, the offer is related to NWR's reincorporation to the UK and subsequent inclusion into the FTSE index. The news is neutral.

NWR has announced that its majority owner BXR Mining will sell up to 16m shares of NWR (about 6.1% stake), reducing its stake (64.3% in NWR) in order to enhance liquidity in connection with the inclusion of NWR in the FTSE index. The offer will be non-public and is subject to the price offered.

Page 3: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

EQUITY MARKET – PRAGUE STOCK EXCHANGE

The announced transaction is neutralizing the positive effect (in terms of higher demand) related to potential inclusion of the stock in the FTSE index. Please note that NWR expects to be included in the FTSE 250 index during the next quarterly review (scheduled for 8 June 2011), effective from 17 June. The inclusion is subject to approval by the FTSE committee. In addition, the stock could potentially face certain pressure in connection with investors' freeing funds for the IPO of Polish miner JSW (book-building period: 13-28 June; trading on the WSE will commence on 6 July). The announced sale does not change our fundamental view of the stock and we therefore maintain our target price. However, the higher supply is of course felt on the market. Nevertheless, increasing the free float could lead to potentially higher weighting of NWR in the FTSE 250 index. Having said that, the potential positive effect (higher demand) of inclusion in the index will be muted at least in the short term and, moreover, the stock could potentially remain under pressure due to the anticipated IPO of JSW.

Fortuna

Fortuna's shares are going ex-dividend today, 6 June (EUR 0.3 per share). At the present currency rate, this means about 5.7% gross dividend yield. The dividend payment day is on 24 June.

Penta (majority owner of Fortuna) and E-invest submitted a joint offer for lottery activities of Sazka, which was officially declared bankrupt last Monday. The offer price is CZK 3.5bn and the companies also offer to pay CZK 300m annually from lottery earnings to sports clubs. Penta intends to take advantage of the synergy of Sazka and Fortuna to create a dominant player on the Czech lottery market. There are more companies interested in acquiring Sazka (Fortuna itself had earlier submitted an independent offer worth CZK 2 – 2.5bn) and negotiations may be expected to be lengthy. This is positive for Fortuna even if the acquisition fails. In the second half of July, Fortuna is launching its own lottery and the unresolved problems regarding Sazka would make it much easier for Fortuna to start the lottery and acquire a market share faster. Penta's strategy will be to seek Sazka's acquisition or at least try to delay the final resolution of Sazka's situation.

Page 4: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

EQUITY MARKET – PRAGUE STOCK EXCHANGE

MARKET IN FIGURES

Market Volume (CZK m) Change (%) (EUR m) Change (%) (USD m) Change (%) 9,167.5 16.7 374.4 16.6 540.3 21.3

Note: Percentage change relative to the average weekly volume over the past six months

Close w/w 3m y/y 52W Weekly volume (%) (%) rel. (%)* (%) rel. (%)* Low High CZK m rel. (%)

AAA Auto 25.0 -2.4 2.4 2.3 36.1 30.7 17 28 4 -3 CME 348 -6.3 2.6 2.5 -39.0 -41.4 311 559 98 -49 CEZ 900 -3.2 11.8 11.7 -1.0 -4.9 736 967 4,655 47 ECM 33 -4.9 -60.5 -60.5 -83.9 -84.6 25 208 2 -39 Erste 843 0.9 -7.5 -7.5 12.9 8.4 642 965 607 -30 Fortuna 134 3.8 30.2 30.1 n.a. n.a. 84 149 526 -40 KB 4,100 1.1 -4.0 -4.1 11.1 6.7 3,275 4,600 1,201 -37 KITD 199 -5.2 -10.6 -10.6 -11.6 -15.0 163 318 27 37 NWR 240 -12.3 n.a. n.a. n.a. n.a. 240 290 1,450 103 Orco 218 -4.6 9.1 9.0 39.0 33.6 110 252 21 -13 Pegas 446 1.1 2.1 2.0 1.4 -2.6 410 475 36 13 PMCR 9,460 2.3 2.3 2.2 13.6 9.1 8,015 10,801 95 -96 TEF 417 1.3 4.5 4.4 0.5 -3.5 369 452 403 -32 Unipetrol 181 0.2 3.7 3.6 -7.9 -11.6 170 229 32 -99 VIG 958 -0.4 -5.9 -6.0 9.7 5.4 801 1,067 7 -75

Note: *Percentage change relative to the index PX.** Percentage change relative to the average weekly volume over the past six months.

Ratios P/E P/Sales EV/EBITDA EV/ Sales Target LT ST 2010 2011e 2010 2011e 2010 2011e 2010 2011e Price Recomm. Outlook AAA Auto 13.7 n.a. 0.3 n.a. 8.9 n.a. 0.5 n.a. Not rated CME 13.3 -11.9 1.8 1.7 22.8 12.3 3.3 3.1 USD 25 Buy Neutral CEZ 10.3 11.6 2.4 2.4 7.5 7.6 3.3 3.2 CZK 940 Buy Neutral ECM -0.8 n.a. 1.2 n.a. 2.4 n.a. 1.2 n.a. Not rated Fortuna 16.3 16.5 3.5 3.4 11.1 10.8 3.5 3.4 CZK 127 Buy Neutral KITD n.a. n.a. 1.2 n.a. 0.0 n.a. 1.2 n.a. Not rated NWR 11.8 8.0 1.6 1.4 5.6 3.9 1.6 1.4 CZK 308 Buy Positive Orco 12.2 n.a. 7.6 n.a. 70.1 n.a. 7.6 n.a. Not rated Pegas 7.9 6.9 1.4 1.2 4.9 4.0 1.4 1.2 CZK 488 Buy Neutral PMCR 11.6 10.9 2.4 2.1 8.0 7.6 2.4 2.1 Pending Pending Neutral TEF 11.0 16.1 2.4 2.5 5.8 6.1 2.4 2.5 CZK 427 Hold Neutral Unipetrol 31.7 11.2 0.4 0.5 6.3 4.3 0.4 0.5 Pending Pending Pending

Ratios P/E P/BV Target LT ST 2010 2011e 2010 2011e Price Recomm. Outlook KB 11.7 11.1 2.0 2.0 CZK 4,441 Hold Neutral Erste 12.9 9.7 1.0 0.9 EUR 34.0 Hold Neutral VIG 12.6 10.5 1.1 1.0 EUR 46.5 Buy Neutral

Page 5: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

EQUITY MARKET – BRATISLAVA STOCK EXCHANGE

Close w/w (%) 3M (%) y/y(%) 52W Low 52W High

Weekly volume (EUR ths)

VUB 81.0 -0.6 -11.2 15.7 67.0 95.0 7 SES Tlmače 7.0 -50.0 -50.0 -58.8 7.0 17.0 0 OTP 4.00 0.0 81.0 33.3 2.01 4.10 0 Biotika 21.0 0.0 -2.3 130.6 9.1 23.2 5 Slovnaft 50.0 0.0 0.0 -7.5 40.0 58.3 0 BHP 11.2 0.1 1.0 8.2 10.3 11.2 334 TMR 42.0 -0.2 1.4 5.5 39.7 42.5 416

SAX Index 230.34 -2.5 0.8 11.2 204 248.53 762

MARKET COMMENT After a previous long pause following the 2010 results, SES Tlmače traded at EUR 7, down 50% last week. VÚB's shares stayed at EUR 81.50 almost all week, eventually falling to EUR 81 and closing down 0.6%. TMR traded within a narrow range of EUR 42 – 42.28 and closed down about 0.2% at EUR 42. Slovnaft first fell to EUR 47.50 before rebounding to EUR 50, i.e. flat w/w. Biotika closed also flat at EUR 21.01. The only growing stock in the SAX Index was BHP, which finished up 0.1% at EUR 11.20.

The SAX Index posted a loss of 2.5% to 230.34 points. Traded volumes reached about EUR 750 thousand, with half of the volumes traded in TMR. Of stocks not included in the SAX Index, Zentiva is worth mentioning. The shares were traded within EUR 131.03 – 131.27 and they gained about 64% YTD.

220

225

230

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SAX Index

11.08

11.12

11.16

11.20

11.24

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EUR BHP - Best Hotel Properties

41.2

41.4

41.6

41.8

42.0

42.2

42.4

6/05 13/05 20/05 27/05 3/06

EUR TMR - Tatry Mountain Resorts

Page 6: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

ECONOMY

Industrial output – April Growth in industrial output slowed down to 4.7% y/y (vs. 12.9% on average in 1Q), falling short of expectations (8.0%). Seasonally adjusted production increased by 0.3% m/m. Although the year-on-year comparison was negatively impacted by a calendar effect (-1 working day), the adjusted result (7.7%) is still worse than expected and indicates an ongoing slow-down, which started in February. The data fit into the weaker results of the German industry (in particular a decline in orders). Apart from the overall result, detailed figures do not reveal any major surprises. Exports remain the decisive factor; total sales grew by 6.5% y/y, of which export sales grew by 13% y/y and domestic sales by less than 1%. Industrial production growth could continue, albeit at a slower pace, which is indicated by a solid increase in new orders (9%, of which new orders from abroad: 9%). Main growth drivers include car manufacturing (17%), machinery (10%) and metallurgy (7%). This year we expect an increase of 7%. Trade balance – April Trade balance in April ended with a surplus of CZK 12.6bn (CZK 14.1bn in April 2010), in line with our expectations (CZK 12bn) but slightly below market consensus (CZK 15bn). Exports continued to grow at a strong pace (15% y/y) in traditional categories. Car and machinery exports rose by 20%. Imports continued to grow too (17%), supported by a recovery in investment demand along with growing prices of commodities, crude oil in particular. The value of imported crude oil, gas and fuels rose by 25% but the volume of crude oil and gas fell by 13% and 2%, respectively. The trade deficit in energies increased by CZK 3.2bn, erasing a part of the 6.5bn higher surplus from trade in machinery and cars. According to the national methodology of balance of payments, foreign trade posted a surplus of CZK 0.9bn. The results passed without any reaction on the part of the FX market and the koruna stayed at 24.32 per euro.

Indicators Last Figure Period 2009 2010 2011e GDP (real) %, y/y (real) 2.9 '4Q/10 -4.0 2.2 2.0 Industrial output %, y/y (real) 16.9 '02/11 -13.4 10.5 7.5 CPI %, y/y 1.8 '02/11 1.0 1.5 2.2 Trade balance bn CZK 1.0 '12/10 151.7 124.5 105.2 Current account % of GDP -1.0 '2009 -1.0 -3.3 -1.8 Unemployment % 9.7 '01/11 8.1 9.0 8.1

Page 7: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

FOREX

CZK/EUR The koruna stagnated against the euro all week around 24.50 but firmed to 24.33 at the end of the week. The firming was triggered by the weakening of the dollar against the euro, which was subsequently reflected in other regional currencies. We still expect rather calm and stable trading, and the koruna could firm further in the short term (24.2). By the end of the summer the koruna could get stabilized around 24.2-24.6. The long-term outlook remains unchanged and we expect to see the Czech currency firm to 23.8. CZK/USD The koruna was firming against the dollar all week, moving from 17.20 to a month high of CZK 16.60/USD. The firming accelerated toward the end of the week, when the dollar weakened against the euro and the koruna firmed against the euro. Higher volatility will probably continue and the dollar could continue weakening (16.50?) in the short term. In the long term (months) rather than a clear trend we expect to see higher volatility within CZK 16-20 per USD. USD/EUR The euro was steadily firming against the dollar. After moving from USD 1.43/EUR to 1.45/EUR, it jumped to a month high of 1.463, as another loan by the EU to Greece is becoming a possibility. Moreover, US macroeconomic data, especially the unemployment report, were weak. The dollar got under a strong selling pressure and besides a technical correction there are not many events that would support the dollar in the short term. The ECB meets on Thursday. Interest rates are expected to be kept unchanged but at the same time the central bank is expected to indicate their raise in July. If expectations are not met, the euro could significantly weaken.

Exchange Rates Close w/w 3M YTD y/y 52W Forward Forward (%) (%) (%) (%) Low High 1M 6M CZK/EUR 24.33 0.8 0.2 3.3 6.4 24.0 26.0 24.3 24.3 CZK/USD 16.63 3.0 6.5 13.8 28.1 16.3 21.8 16.6 16.7 CZK/GBP 27.30 3.6 5.4 6.9 14.0 26.9 31.9 27.3 27.3 USD/EUR 1.464 -2.2 -5.9 -9.2 -16.9 1.19 1.48 1.46 1.46

23.0

23.5

24.0

24.5

25.0

16.0

16.4

16.8

17.2

17.6

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EURUSD Koruna

USD

EUR

Page 8: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

CZK–MONEY AND BOND MARKET

PRIBOR Fixing (%) w/w (bps) 3M (bps) YTD (bps) Y/Y (bps) 52W Low 52W High FRA 3M 2W 0.83 -1 -3 0 -4 0.81 0.88 n.a. 3M 1.21 0 0 -1 -4 1.18 1.25 1.32 6M 1.56 0 -1 0 3 1.47 1.58 1.52 1Y 1.83 -1 2 3 5 1.75 1.85 n.a.

Bond Market Volume (CZK m) change (%) (EUR m) change (%) (USD m) change (%) 9,087.1 -11.7 371.6 -11.4 537.6 -7.1 Note: Percentage change relative to the average weekly volume over the past six months

Name Maturity Price w/w Volume YTM w/w Duration (bps) (CZK m) (%) (bps) GB 3.55/12 18-Oct-12 102.82 1 1,208 1.44 -3.6 1.3 GB 3.70/13 16-Jun-13 103.95 -5 158 1.70 0.6 1.9 GB 3.80/15 11-Apr-15 104.97 31 63 2.43 -9.0 3.6 GB 5.00/19 11-Apr-19 110.05 27 1,439 3.51 -4.1 6.7 GB 3.75/20 12-Sep-20 100.88 89 124 3.64 -11.5 7.8

0.0

1.0

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5.0

0 2 4 6 8 10 12 14years

CZK - Yield curve

3/5/2011

3/6/2011

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1.25

1.50

1.75

2.00

1W 2W 1M 3M 6M 9M 1Y

CZK - Money Market

3/5/2011

3/6/2011

Page 9: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

COMMODITIES

Close w/w (%) 3M (%) YTD (%) y/y (%) 52W Low 52W High Crude Oil - Brent 115.8 0.7 0.4 24.4 53.6 71.5 126.7 Crude Oil - WTI 100.2 -0.4 0.6 11.6 34.3 71.4 113.9 Gold 1,542 0.4 7.6 9.8 27.8 1,162 1,564 Electricity 59.5 0.1 12.6 11.0 13.2 46.6 60.7 Coal 129.7 1.5 7.1 6.4 33.2 95.7 133.6 Aluminium 2,637 0.5 1.0 7.5 34.9 1,868 2,797 Copper 9,099 -1.1 -7.7 -4.2 39.4 6,101 10,160 Wheat 773.8 -5.6 -0.3 -1.4 75.2 428 886 Corn 754 -0.6 3.7 22.4 115.7 325 776 Soybean 1,415 2.5 3.4 3.6 48.1 931 1,451

Commodity markets were quite still last week with most major indices, as well as individual sectors, stagnating. Weaker US macroeconomic data were offset by a firming dollar. Crude oil stayed on the same level for a second week in a row (Brent: USD 115; WTI: USD 102). Gold moved around USD 1,540/oz., while silver weakened by 5% to USD 36.2/oz halfway through the week. Agricultural commodities as a whole stagnated but separate commodities showed mixed development. Wheat (-5% w/w) was hammered down by news of a lifted ban on Russian exports, and cotton (+6%) was lifted by worries of drought in the USA, the leading exporter.

1400

1450

1500

1550

1600

108

114

120

126

6/05 13/05 20/05 27/05 3/06

USD/oz.USD/bbl Crude oil & Gold

Crude oil - Brent

Gold

600

650

700

750

800

8000

8500

9000

9500

10000

10500

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US cent/buUSD/t Copper & Corn

Copper

Corn

55

60

65

115

120

125

130

135

6/05 13/05 20/05 27/05 3/06

EUR/MWUSD/t Coal&Electricity

Coal 1Y ARA

Electricity

Page 10: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

LOOKING AHEAD

Date Time Country Indicator/Company Periods eAFT eMarket Previous 6/6/2011 9:00 CR Construction output 04/11 - - 4.6% y/y 6/6/2011 9:00 CR Industrial production 04/11 8.0% y/y 8.0% y/y 9.5% y/y 6/6/2011 9:00 CR Trade balance 04/11 CZK 12.6bn CZK 15.0bn CZK 21.5bn 6/6/2011 11:00 Eurozone PPI 04/11 - 0.8% m/m 0.7% m/m 6/6/2011 11:00 Eurozone PPI 04/11 - 6.6% y/y 6.7% y/y 7/6/2011 9:00 Slovakia Retail sales 04/11 - -0.4% y/y -3.4% y/y 7/6/2011 11:00 Eurozone Retail Sales 04/11 - 0.0% y/y -1.7% y/y 7/6/2011 11:00 Eurozone Retail Sales 04/11 - - -1.7% y/y 7/6/2011 12:00 Germany Manufacturing Orders 04/11 - 2.0% m/m -4.0% m/m 7/6/2011 - CR CEZ: Dividend record date 07/02 CZK 50 - CZK 53 8/6/2011 9:00 CR Unemployment rate 05/11 8.3% 8.2% 8.6% 8/6/2011 9:00 Romania GDP Q1/11f - - 1.6% y/y 8/6/2011 9:00 Romania Industrial production 04/11 - - 7.4% y/y 8/6/2011 9:00 Slovakia GDP Q1/11f - 3.5% y/y 3.5% y/y 8/6/2011 9:00 Slovakia Industrial production 04/11 - 6.5% y/y 6.8% y/y 8/6/2011 11:00 Eurozone GDP s.a. Q1/11p - 2.5% y/y 2.5% y/y 8/6/2011 11:00 Eurozone GDP s.a. Q1/11p - - 2.5% y/y 8/6/2011 12:00 Germany Industrial production 04/11 - 0.2% m/m 0.7% m/m 8/6/2011 12:00 Germany Industrial production 04/11 - - 0.7% m/m 8/6/2011 20:00 USA Fed's Beige Book - - 8/6/2011 - Poland Central bank - Interest rate - - 4.50% 4.25% 9/6/2011 9:00 CR GDP Q1/11f - - 2.5% y/y 9/6/2011 9:00 Hungary GDP Q1/11f - - 2.4% y/y 9/6/2011 9:00 CR CPI 05/11 - 0.3% m/m 0.3% m/m 9/6/2011 9:00 CR CPI 05/11 - 1.8% y/y 1.6% y/y 9/6/2011 13:00 UK BOE interest rates decision - - 0.5% 0.5% 9/6/2011 13:45 Eurozone ECB interest rates decision - - 1.25% 1.25% 9/6/2011 14:30 USA Trade balance 04/11 - USD -48.9bn USD -48.2bn 9/6/2011 - - Fotex - - - HUF 0.1 10/6/2011 8:00 Germany CPI 05/11f - 0.0% m/m 0.0% m/m 10/6/2011 8:00 Germany CPI 05/11f - 2.3% y/y 2.3% y/y 10/6/2011 9:00 Romania CPI 05/11 - 0.3% m/m 0.7% m/m 10/6/2011 9:00 Romania CPI 05/11 - 8.5% y/y 8.3% y/y 10/6/2011 17:00 CR Pegas - AGM Registration FY2010 - - - 10/6/2011 - - National Semiconductor - - USD 0.27 USD 1.37

Page 11: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

CONTACTS

J&T ATLANTIK

Trading Name Contact

Michal Semotan Trading and Sales

+420 221 710 130 [email protected]

Michal Znojil Trading and Sales

+420 221 710 131 [email protected]

Michal Stubna Trading – Slovak Equities

+421 259 418 173 [email protected]

Tomas Brychta Money Market, Forex

+420 221 710 238 [email protected]

Petr Vodicka Fixed Income

+420 221 710 155 [email protected]

Portfolio Management – Client Service Name Contact

Roman Hajda Chief Investment Officer

+420 221 710 224 [email protected]

Petr Holinsky Portfolio Manager

+420 221 710 429 [email protected]

Portfolio Management Name Contact

Martin Kujal Chief Investment Officer; bonds

+420 221 710 698 [email protected]

Marek Janecka Portfolio Manager; equity

+420 221 710 699 [email protected]

Miroslav Padera Portfolio Manager; DPM

+420 221 710 623 miroslav.padera @atlantik.cz

Trading Name Contact

David Novy Trading – Czech and Foreign Equities

+420 221 710 628 [email protected]

Barbora Stieberova Trading – Czech and Foreign Equities

+420 221 710 648 [email protected]

Tereza Jaluvkova Trading – Czech and Foreign Equities

+420 221 710 606 [email protected]

Marek Kijevsky Trading – Foreign Equities

+420 221 710 669 [email protected]

Miroslav Nejezchleba Trading – Foreign Equities

+420 221 710 633 [email protected]

Sales and Client Service Name Contact

Dalibor Hampejs Mutual Funds

+420 545 423 448 [email protected]

Milerská Zuzana Client Service

+420 800 484 484 [email protected]

Research Name Contact

Milan Vanicek Strategy, pharma, telecom

+420 221 710 607 [email protected]

Milan Lavicka Banking, financials

+420 221 710 614 [email protected]

Bohumil Trampota Utilites, oil&gas

+420 221 710 657 [email protected]

Pavel Ryska Media, real estate

+420 221 710 658 [email protected]

Petr Sklenar Macroeconomics, fixed income

+420 221 710 619 [email protected]

ATLANTIK finanční trhy, a.s. Praha:

Pobrezni 14 186 00 Prague 8 Czech Republic

Tel.: +420 221 710 666 Fax: +420 221 710 626

Brno:

Vesela 24 602 00 Brno

Czech Republic Tel.: +420 545 423 411

Tel: 800 484 484 [email protected]

www.atlantik.cz Bloomberg: ATLK <GO>

Reuters: ATLK

J&T BANKA Czech Republic J&T Banka, a. s.

Pobrezni 14 186 00 Prague 8 Czech Republic

Tel.: +420.221.710.111 www.jtbank.cz

Slovakia J&T Banka, a. s., pobočka zahraničnej banky

Lamacska cesta 3 841 04 Bratislava

Slovakia Tel.: +421.259.418.111

www.jt-bank.sk

Page 12: Týdenní přehled J&T Banka (30. květen - 3. červen 2011)

DISCLAIMER

ATLANTIK finanční trhy, a.s. (hereinafter only “ATLANTIK FT”) is a licensed securities brokerage and a member of the Prague Stock Exchange (Burza cenných papírů Praha, a.s.) authorized to provide investment services as outlined in Act No. 256/2004 Sb. on Business Activities on the Capital Market. J & T BANKA, a.s. (hereinafter only “the Bank“) is a licensed bank and a member of the Prague Stock Exchange authorized to provide investment services as outlined in Act No. 256/2004 Sb. on Business Activities on the Capital Market. ATLANTIK FT and the Bank prepare and disseminate investment recommendations in accordance with legal regulations, their internal regulations, and Directive No. 114/2006 Sb, "Impartial Presentation of Investment Recommendations." The activities of ATLANTIK FT and the Bank are subject to the oversight of the Czech National Bank, Na Příkopě 28, 115 03 Prague 1 – http://www.cnb.cz/.

ATLANTIK FT and the Bank disseminate recommendations pursuant to Directive No. 114/2006 Sb, "Impartial Presentation of Investment Recommendations", and this document contains some important information and notice related to the creation and dissemination of investment recommendations.

ATLANTIK FT and the Bank issue investment recommendations created by the employees of ATLANTIK FT and/or the Bank (hereinafter only “Analysts”). Analysts who create investment recommendations bear full responsibility for the objectivity of such recommendations.

Levels of investment recommendations used ATLANTIK FT and the Bank use the following levels of investment recommendations:

BUY – It is anticipated that the percentage difference between the one-year target price of the share (determined by one of the valuation methods stated below) and the current market price exceeds the minimum theoretical required return for the respective share. This required return is calculated as the sum of earnings from a risk-free asset (Czech government bonds with the longest term to maturity) and the product of beta coefficient and a risk premium (determined individually for each company and derived from the risk premium for the Czech market).

HOLD – It is anticipated that the percentage difference between the one-year target price of the share (determined by one of the valuation methods stated below) and the current market price is less than the minimum theoretical required return for the respective share but, at the same time, exceeds the return from a risk-free asset.

SELL – It is anticipated that the percentage difference between the one-year target price of the share (determined by one of the valuation methods stated below) and the current market price is less than the return from a risk-free asset.

Valuation methods To valuate companies and investment projects ATLANTIK FT and the Bank use first of all a method of discounted cash flow (FCFE or DDM). A method of relative comparison is an integral part of every valuation, but it serves more as a corroborative test for the discounting method due to the following reasons: (i) differences in accounting standards, (ii) differences in the sizes of companies, (iii) information availability, (iv) impacts of acquisitions and subsidiaries on balance sheet structures, (v) differences in dividend strategies, and (vi) differences in expectations of future profit margins. If the fundamental valuation is in principle consistent with the range of values determined on the basis of the relative comparison, this implies that the projections of cash flows and other key assumptions of the discount model are correct (especially the discount factor, growth rate for the so-called “infinite period,” capital structure, etc). In the reverse case, it is necessary to identify factors which cause principal differences between the findings of the two valuation methods.

Measures preventing conflicts of interest in association with investment instruments: The remuneration to persons who participate in producing investment recommendations depends in particular on the quality of the work performed, the results achieved and the company’s overall profit. Those who participate in producing the investment recommendations have neither financial nor other motivations to issue investment recommendations of a particular level or direction. In complying with the rules for prudently providing investment services and for organizing the company’s internal operations, ATLANTIK FT and the Bank apply procedures and rules set forth by legal regulations and the company’s internal regulations which prevent conflicts of interest in association with investment instruments contained in the investment recommendations disseminated by ATLANTIK FT and the Bank.

Additional notice ATLANTIK FT, the Bank and their related parties, and persons that have a legal or actual relationship with them, including members of authorised representative bodies, senior employees or other employees, may trade in investment instruments or make other investments or transactions related to them, and may during a decisive period buy or sell, or offer to buy or sell on regulated markets or elsewhere, whether as a broker, an intermediary, or in another legal role. Traders and other employees of ATLANTIK FT and the Bank and/or related parties may offer clients and its own trading department oral or written market commentaries or trading strategies reflecting opinions which are at variance with the opinions expressed in investment recommendations. In making investment decision, investors should regard investment recommendations only as one of several factors to be considered. Investment analyses and recommendations issued by ATLANTIK FT and the Bank and/or related parties have been prepared in accordance with the rules of conduct and internal regulations for managing conflicts of interest associated with investment recommendations. An overview of changes in the level for an investment instrument in regard to which ATLANTIK FT and the Bank have issued an investment recommendation and its price targets during the past 12 months are published and accessible at http://www.atlantik.cz/ and/or http://www.jtbank.cz. The issuer was not acquainted with the recommendation prior to its issuance and therefore the recommendation has not been modified or adjusted in any way at the issuer´s request. It is always the Client’s responsibility to make the final investment decisions and the Client bears full responsibility for them. Although investment recommendations of ATLANTIK FT and the Bank are prepared by Analysts in good faith, in a professional and a fair manner and with due care, ATLANTIK FT and/or the Bank cannot accept responsibility and cannot guarantee that the information contained therein is complete or accurate, except for the information concerning ATLANTIK FT and the Bank. The investment recommendations express the opinions of Analysts as at the date of their publication and may be changed without prior notice. Successful investments in the past do not guarantee the same results in the future. Investment recommendations do not in any case constitute an offer to purchase or sell any investment instruments. The individual investment instruments or strategies stated in the investment recommendations do not have to be suitable for every investor. The opinions and recommendations stated therein do not take into account the situation of individual clients, their financial positions, objectives or needs. The investment recommendations should serve those investors who are anticipated to make their own investment decisions without depending unreasonably on the information stated in the investment recommendations. These investors are obliged to make their own decisions as to the expediency of investments made in any investment instruments by appropriately considering the price, possible threats and risks, along with their own investment strategies and financial situation. The value or price of any investment may change. Therefore, investors may receive funds in return that are lower than their original investments. Successful investments made in the past do not guarantee favourable results in the future. 2011 © ATLANTIK finanční trhy, a.s., J & T BANKA, a.s.


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