Producer prices’ mom dynamics decelerated for the fourth time in a row. In a yoy comparison, producer prices together with those of construction work and services increased in August; only agricultural producer prices lowered. On the long-term horizon, producer prices will ease off along with lower prices of crude oil on international markets.

Producer prices’ mom dynamics decelerated for the fourth time in a row. In a yoy comparison, producer prices together with those of construction work and services increased in August; only agricultural producer prices lowered. On the long-term horizon, producer prices will ease off along with lower prices of crude oil on international markets.

Producer prices’ mom dynamics decelerated for the fourth time in a row. In August, producer prices added 0.1% mom, and the yoy dynamics slowed to 3.3%. Growth was mainly supported by higher fuel and energy prices. Metal prices went up 4.1%, and chemical products were 8.1% more expensive than a year ago. However, energy prices increased the most, nearly 10%.

Construction work price dynamics accelerated to 3.5% yoy in August. At the same time, the prices of materials and goods input needed for construction rose 4.4% in comparison with August 2017. Higher prices in the construction sector are pushed up by high demand as well as solid wage dynamics. Higher wages also pulled up prices of market services for businesses by adding 1.5% yoy.

On the contrary, agricultural products prices were 2.1% lower than a year ago. This was due to cheaper fruit, the prices of which were nearly cut in half, and potatoes, for which prices dropped nearly a quarter.

Industrial production retains its good dynamics as well as its optimism. Today’s statistics, however, confirm that higher labour costs in combination with increasing input costs are increasing inflation pressures in the economy. In the coming period, we expect producer prices to slow down further. Oil prices will stabilise a touch below the current level, which will help stabilise PPI. Prices in construction are set to continue increasing. High demand and insufficient capacity will furthermore push construction prices up. Overall, higher producer prices will continue to boost consumer prices. Thus, we expect domestic inflation to not dip below 2% in the following year and the CNB to continue increasing rates at a pace of one hike per quarter.

Technological company Avast, which performed extremely well in regard to its stock price (more than 20% upside on the Prague Stock Exchange), has another positive announcement. Avast will convene a general meeting on 10 October, where it hopes to approve a decrease in share premium by GBP138m. This step was already announced in the prospectus to its IPO on the London Stock Exchange.

Technological company Avast, which performed extremely well in regard to its stock price (more than 20% upside on the Prague Stock Exchange), has another positive announcement. Avast will convene a general meeting on 10 October, where it hopes to approve a decrease in share premium by GBP138m. This step was already announced in the prospectus to its IPO on the London Stock Exchange.

The purpose of the reduction of share premium is to support future payment of dividends and share buybacks. The share premium comprises of a non-distributable amount of GBP138.6m. These proceeds from the IPO cannot be distributed as a dividend and the handling options are very restricted. The company aims to reduce the share premium by GBP138m in order to create a distributable reserve. The handling options for this kind of reserve are quite wide. It is only an accounting reclassification of two accounting items with no impact on any other area such as the number of shares, etc. If the general meeting approves the reduction, the whole accounting operation must also be approved by the British courts, which would decide in November.