Issuance activity: Tomorrow, MinFin is scheduled to auction CZ5.0bn of 2033 bonds and CZK3.0bn of 2035 bonds. The newly published issuance calendar for May shows an indicative amount of CZK19.0bn to be sold, down from CZK23.0bn in April. The issuance pace is unlikely to slow significantly in the remainder of the year, as we estimate that 28% of annual gross CZGB issuance has been covered so far this year.

Issuance activity: Tomorrow, MinFin is scheduled to auction CZ5.0bn of 2033 bonds and CZK3.0bn of 2035 bonds. The newly published issuance calendar for May shows an indicative amount of CZK19.0bn to be sold, down from CZK23.0bn in April. The issuance pace is unlikely to slow significantly in the remainder of the year, as we estimate that 28% of annual gross CZGB issuance has been covered so far this year.

Market situation: Since the last auction (10 April), the CZK IRS has followed the rise in core interest rates after the Fed’s rate cut expectations were scaled back. Today, CNB Governor A. Michl reiterated that he prefers a cautious approach to rate cuts and that the Board believes that the neutral nominal policy rate is moderately higher than the 3% assumed in the CNB’s core staff forecast model. 

Rates outlook: We expect 50bp cuts at the May, June and August meetings, which would reduce the current mismatch between interest rates and economic and inflation developments. In September and December, we expect a standard cut of 25bp. We therefore see the repo rate to end the year at 3.5%. Given the CNB Board’s recent statements on a "higher neutral rate", the decline could stop at this level or even at 4%. The CNB is expected to publish an analysis of the policy-neutral level at May’s meeting.

The Annual General Meeting of Moneta Money Bank will be held today, Tuesday, April 23, 2024 at 10 a.m.

At the meeting, the shareholders approved the dividend proposal of the Board of Directors of the Bank in the amount of CZK9 per share. The record date is Monday, April 29, 2024, which means that on Thursday, April 25, Moneta shares will be traded for the last time with the right to this dividend. Payment will commence on May 21, 2024.

The approved dividend offers a dividend yield of +8.8% (gross).

On Thursday, April 25, Moneta will also release its 1Q24 results. Our estimates can be found at https://bit.ly/Moneta_e1Q24_EN. Despite several key rate cuts by the CNB, we expect funding costs to remain high. Traditionally, regulatory fees are also due in the first quarter. We also expect strong growth in fees and commissions due to strong sales of third-party products. Operating income is expected to be almost +20% higher year-on-year. However, unlike in 1Q23 when provisions were released, we estimate net provisioning in the first quarter of this year. As a result, net profit should be virtually unchanged year-on-year.

The Annual General Meeting of Moneta Money Bank will be held today, Tuesday, April 23, 2024 at 10 a.m.

At the meeting, the shareholders approved the dividend proposal of the Board of Directors of the Bank in the amount of CZK9 per share. The record date is Monday, April 29, 2024, which means that on Thursday, April 25, Moneta shares will be traded for the last time with the right to this dividend. Payment will commence on May 21, 2024.

The approved dividend offers a dividend yield of +8.8% (gross).

On Thursday, April 25, Moneta will also release its 1Q24 results. Our estimates can be found at https://bit.ly/Moneta_e1Q24_EN. Despite several key rate cuts by the CNB, we expect funding costs to remain high. Traditionally, regulatory fees are also due in the first quarter. We also expect strong growth in fees and commissions due to strong sales of third-party products. Operating income is expected to be almost +20% higher year-on-year. However, unlike in 1Q23 when provisions were released, we estimate net provisioning in the first quarter of this year. As a result, net profit should be virtually unchanged year-on-year.