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Five Ways to Invest in the Czech Republic

by: Stockerblog September 03, 2008 | about stocks: CEE / CZAVF.PK / KMBNY.PK / TFATF.PK / ZTVAF.PK    

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With the Russian invasion of Georgia, attention has been focused on Eastern Europe and any investment opportunities or bargains there. The Czech Republic is one of the larger countries in that part of the world. Here are some interesting facts about the country:

  1. It is a pluralist multi-party parliamentary representative democracy.
  2. They have a flat tax.
  3. Their annual GDP growth has recently been approximately 6%.
  4. It has the highest ranking compared to the former Comecon countries in the Human Development Index.
  5. It ranks 35th out of all countries for GDP based on purchasing power parity.
  6. Most of the country's economy has been privatized.
  7. It has abolished border controls with all of its neighbors.
  8. The Programme for International Student Assessment ranks the Czech education as the 15th best out of all countries.
  9. 4.6% of their electricity comes from renewable sources, including hydropower.
  10. They have the most Wi-Fi subscribers in the European Union.

Here are some stocks, and an ETF connected with the Czech Republic.

  • KOMERCNI BANKA (KMBNY.PK) is a Czech Republic-based commercial banking company based in Prague. Net profit margin for the latest quarter increased 41.10%, and return on average equity rose 27.13%.
  • TELEFONICA 02 CZECH (TFATF.PK) provides telecommunications services, including voice and data services, primarily in the Czech Republic. Net profit margin for the latest quarter increased 21.22%, and return on average equity rose 17.12%.
  • ZENTIVA NV (ZTVAF.PK) develops and markets pharmaceutical products, primarily for the treatment of cardiovascular disease, pain and central nervous system diseases. Net profit margin for the latest quarter increased 8.96%, and return on average equity rose 17.97%.
  • CZECH REPUBLIC RESOURCES [CZHC.PK] has a goal of exploitation of resources, such as minerals and ores, from mines in central Europe. This is an extremely low cap stock and should therefore be considered extremely speculative.
  • CESKE ENERGETICKE ZAVODY (CZAVF.PK) is an electric utility in the Czech Republic.
  • Central Europe & Russia Fund (CEE) is an ETF that has about 6% of its portfolio invested in the Czech Republic.

Disclosure: Author does not own any of the above.

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This article has 3 comments:

  •  
    Sep 03 09:52 AM
    Two errors and one major problem with this blog piece:
    "It has abolished border controls with all of its neighbors." -- not true, there are strict customs, border controls, and multiple tariffs with all CR's neighbors.
    "Central Europe & Russia Fund (CEE) is an ETF" -- not true, CEE is a closed-end fund and as such can trade at discount or a premium for months or even years.
    Lastly, all of the Pink Sheet stocks are completely illiquid and, essentially, "uninvestible.&qu...
    Reply
  •  
    Sep 04 09:52 AM
    I’m an American who has lived in the Czech Republic for the last 17+ years.

    The biggest problem with this article is the inclusion of CZECH REPUBLIC RESOURCES [CZHC.PK] in the list of “ways to invest in the Czech Republic”. Quite frankly, I have serious doubts about the integrity of the person who wrote this article.

    >
    > In a comment to the article, GlobalTrekker wrote: “all of the Pink Sheet stocks are
    > completely illiquid and, essentially, ‘uninvestible’.”
    >

    Hmmmm.

    Komercni Banka

    Actively traded on the Prague Stock Exchange
    A very strong company
    KMBNY.PK was last traded on July 15, 2008 (not too bad, I think)

    Telefonica 02 Czech

    Actively traded on the Prague Stock Exchange
    A very strong company
    TFATF.PK was last traded on August 15, 2008

    Previously named “SPT Telecom” until it was bought out by the Spanish company “Telefonica”

    Zentiva NV

    Actively traded on the Prague Stock Exchange
    A very strong company
    ZTVAF.PK was last traded on August 8, 2006 (OK, not much market here)

    Ceske Energeticke Zavody (the natives simply call it “CEZ”…sounds like “chez”)

    Actively traded on the Prague Stock Exchange
    A very strong company
    CZAVF.PK was last traded on August 12, 2008


    GlobalTrekker, if you are a day trader, then of course you don’t want to invest in these companies. However, if the share price is low and you are a real…sorry…long-term investor, you can’t find better stocks ***that are still listed on the Prague Stock Exchange*** than these four companies.
    Reply
  •  
    Sep 04 09:54 AM
    When the Prague Stock Exchange started in the mid 1990s, shares in 1700+ companies could be traded. Almost all of these companies have since been delisted.

    My wife and I have stock certificates from several Czech companies that we want to sell.

    A buyer could regard these certificates as an equities investment. It is possible to perform “due diligence” at the following websites:

    Obchodni rejstrik (portal.justice.cz/uvod...)
    Obchodni rejstrik is maintained on the official server of the Czech Ministry of Justice.

    Obchodni vestnik (ov.ihned.cz/)
    Obchodni vestnik is maintained by the company ECONOMIA a.s. for the Czech Ministry of the Interior (i.e. the ministry that includes the Czech police).

    IPoint (ipoint.financninoviny....)
    IPoint is maintained by the Czech Capital Information Agency (Ceska kapitalova informacni agentura, a.s., CEKIA), a leading domestic provider of corporate databases and economic information.


    A buyer could also regard these certificates as “collectibles”, especially given that most companies in the Czech Republic have very few outstanding shares.

    If you would like to receive a detailed list of the stock certificates that we are selling, including name of company, identification number, number of certificates, and price per certificate, please contact us by email.


    Jeffrey W. Bowyer (American)
    jbowyer@seznam.cz

    Ing. Pavla Bowyerova (Czech)
    pabow@seznam.cz

    Reply
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