Issuance activity: Tomorrow, MinFin is scheduled to auction CZK5.0bn of 2034 bonds and CZK2.0bn of 2038 floaters. In July MinFin indicates to supply CZK24.0bn of CZGBs in total, which is slightly above ytd average of CZK21.3bn. Nevertheless, issuance calendar volumes are not binding and MinFin has sold around 40 % higher volume of CZGBs in primary auctions than indicated ytd. As for the CZGB supply in 2H25, it is, in our view, unlikely to decrease meaningfully compared to 1H25. In1H25 MinFin has issued CZK181.3bn in primary auctions and an additional CZK10.4bn and EUR250mn in the secondary market thus far this year. MinFin’s update of the Strategy states that in 2H25 it plans to issue CZK150-250bn, which is consistent to the full-year plan of CZK350-450bn in the previous strategy published in January.

Issuance activity: Tomorrow, MinFin is scheduled to auction CZK5.0bn of 2034 bonds and CZK2.0bn of 2038 floaters. In July MinFin indicates to supply CZK24.0bn of CZGBs in total, which is slightly above ytd average of CZK21.3bn. Nevertheless, issuance calendar volumes are not binding and MinFin has sold around 40 % higher volume of CZGBs in primary auctions than indicated ytd. As for the CZGB supply in 2H25, it is, in our view, unlikely to decrease meaningfully compared to 1H25. In1H25 MinFin has issued CZK181.3bn in primary auctions and an additional CZK10.4bn and EUR250mn in the secondary market thus far this year. MinFin’s update of the Strategy (https://www.mfcr.cz/en/fiscal-policy/state-debt/publications-and-presentations/funding-and-debt-management-strategy/2025/the-czech-republic-funding-and-debt-management-str-60264) states that in 2H25 it plans to issue CZK150-250bn, which is consistent to the full-year plan of CZK350-450bn in the previous strategy published in January.

Market situation: On the Czech data front, June flash CPI will be published on Friday. We expect Czech inflation to have increased further in June, from 2.4% to 2.9% yoy. The base effect should continue to have an impact. This will also likely be reflected in core inflation, which we expect to have accelerated from 2.8% to 3.0% yoy. Growth in services prices, including the strong rise in housing prices, is likely to remain high (full preview: https://insight.sgmarkets.com/publication/340052?lang=en).

Rates outlook: Front-end CZK IRS is likely to remain elevated in the near term relative to EUR IRS due to accelerating yoy inflation and hawkish CNB (see: https://bit.ly/CNB_Jun25_EN). There are no further cuts priced in for the remainder of 2025 in the FRAs. However, we expect headline inflation to gradually settle close to the central bank’s 2% target in 2H25 and remain there in 2026. This positive outlook, coupled with an expected economic slowdown, should lead to further CNB rate cuts later this year to the end-year 3% terminal.

Starting today, Thursday, June 26, 2025, CEZ shares will trade for the first time without the right to dividends from last year's profits. On Monday, shareholders approved a dividend of CZK47 per share at the Annual General Meeting.

On the ex-dividend date, the price of shares usually declines by the amount of the dividend.

The approved dividend corresponds to 80% of last year's adjusted net profit and offers a gross yield of +3.8%.

Starting today, Thursday, June 26, 2025, CEZ shares will trade for the first time without the right to dividends from last year's profits. On Monday, shareholders approved a dividend of CZK47 per share at the Annual General Meeting.

On the ex-dividend date, the price of shares usually declines by the amount of the dividend.

The approved dividend corresponds to 80% of last year's adjusted net profit and offers a gross yield of +3.8%.