Issuance activity: Tomorrow, MinFin is scheduled to auction CZK4.0bn of 2027 bonds and CZK3.0bn of 2035 bonds. The widening of this year’s state budget deficit by CZK30.0bn to CZK282.0bn was approved last week. As discussed in the previous CZGB Auction Alert, there is thus around CZK100.bn to be issued in 4Q24, in our estimate.

Issuance activity: Tomorrow, MinFin is scheduled to auction CZK4.0bn of 2027 bonds and CZK3.0bn of 2035 bonds. The widening of this year’s state budget deficit by CZK30.0bn to CZK282.0bn was approved last week. As discussed in the previous CZGB Auction Alert, there is thus around CZK100.bn to be issued in 4Q24, in our estimate.

Market situation: Since last week’s auction, CZGB yields have risen by 10-20bp. This move was supported by the strong US NFP data as well as hawkish rhetoric from the CNB and solid August data from the Czech real economy (more here: https://bit.ly/3YdPbPd). As the upward move in the IRS was even more pronounced, the ASW tightened from relatively high recent levels to close to 3M averages. On Thursday, 10 October, the Czech CPI for September will be published. We expect a slight increase from 2.2% yoy in August to 2.3% yoy, while the BBG consensus calls for 2.4% (full preview here: https://insight.sgmarkets.com/publication/323524?lang=en).

Rates outlook: We expect a 25bp cut at each of the two remaining CNB meetings this year given the weak economic data, taking the repo rate to 3.75% by the end of the year, although the CNB’s August forecast implies an average repo rate of 4.5% in 4Q24. We continue to forecast the terminal repo rate for the current policy cycle at 3.5% and expect it to be reached in February next year, but with downside risks related to both the recent weak economic data and the Board’s communication. More on the latest CNB meeting here: https://bit.ly/CNB_Sep24_EN.

Kofola announced that the Board of Directors has decided to pay an advance dividend for 2024. The advance dividend will amount to CZK7.5 per share. This represents a gross yield of +2.3% on the current market price.

The record date for this advance dividend payment is October 11, 2024. The standard settlement means that Kofola's shares are trading for the last time today with the right to this dividend.

Payments will begin on October 31, 2024.

Kofola typically pays out approximately CZK300m in dividends to shareholders. This is equivalent to approximately CZK13.50 per share. However, due to recent acquisitions, namely those of the Pivovary CZ brewery group, Kofola's earnings will increase significantly beginning this year. From our perspective, this could also lead to a reassessment of the dividend policy. For the full year (2024) we expect a total dividend payout to shareholders of CZK19.10 (yield +5.8%).

Kofola announced that the Board of Directors has decided to pay an advance dividend for 2024. The advance dividend will amount to CZK7.5 per share. This represents a gross yield of +2.3% on the current market price.

The record date for this advance dividend payment is October 11, 2024. The standard settlement means that Kofola's shares are trading for the last time today with the right to this dividend.

Payments will begin on October 31, 2024.

Kofola typically pays out approximately CZK300m in dividends to shareholders. This is equivalent to approximately CZK13.50 per share. However, due to recent acquisitions, namely those of the Pivovary CZ brewery group, Kofola's earnings will increase significantly beginning this year. From our perspective, this could also lead to a reassessment of the dividend policy. For the full year (2024) we expect a total dividend payout to shareholders of CZK19.10 (yield +5.8%).