Czech Republic - Factors To Watch on Dec 15

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POLITICS

Rightist Prime Minister Mirek Topolanek is expected to propose a new government to President Vaclav Klaus. He is expected to invite centrist Christian Democrats and the Green Party to his cabinet after talks with Social Democrats failed.

Topolanek is expected to meet Christian Democrat and Green Party leaders during the day.

Analysts said the collapse of talks on forming a broad coalition government led by Topolanek is likely to bring the country closer to early elections or a weak government backed by defectors.

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Topolanek's Civic Democrat (ODS) leaders meet at 5 p.m. (1600 GMT). News conference at 6:30 p.m. (1730 GMT).

- For most recent stories on Czech politics, double click on [RTRS-LEN-CZ-POL].

IPO PRICING

The initial public offering (IPO) for Czech artificial fabrics maker Pegas Nonwovens has been oversubscribed by investors at the top of the range, a source familiar with the matter said.

Pricing of the issue should be announced on Friday.

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CROWN AT RECORD HIGHS

The Czech crown rose to a lifetime high versus the euro on Thursday, extending its year-to-date gains to 5 percent despite central bank concerns about its strength.

It firmed as high as 27.630 per euro in offshore activity on Thursday when domestic banks were idle.

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- For regular updates on currency moves, click on [CZK/].

REUTERS POLL: RATES SEEN ON HOLD INTO 2007

The central bank will keep policy on hold into early next year as inflation is below target while the crown is at record highs, a Reuters poll showed.

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UNIPETROL DIVIDEND

Downstream oil group Unipetrol would receive 124.5 million crowns ($5.89 million) as a pre-tax dividend from its refinery venture Ceska Rafinerska, in which it owns 51 percent.

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PPI BELOW CONSENSUS

Industrial producer prices dipped by a slightly more than expected 0.2 percent in November from October, taking the annual index (PPI) to 2.0 percent, a touch below the consensus market forecast.

Analysts said the release re-inforced market expectations that interest rates could hold flat until at least the end of the first quarter of 2007, when the central bank might tighten policy further.

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- For real-time economic data releases and consensus forecasts, double click on the code in brackets:

BUDGET DEFICIT MAY RISE

The next Czech government will have to raise the newly-approved central state budget's deficit target by nearly 7 billion crowns ($333.6 million), Finance Minister Vlastimil Tlusty was quoted as saying.

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Overview of past economic data and market forecasts For Instant Views of key economic data click on [CZ/INSTANT] For summary of economic data and forecasts For diary of forthcoming Czech events [CZ/DIARY] For calendar of east European economic indicators [CONV/DIARY] TOP NEWS -- Emerging markets [TOP/EMRG] TOP NEWS -- Convergence watch [TOP/EAST]

For an economic indicator diary for the euro zone, the United States and other Group of Seven countries see

For real-time stock market index quotes click in brackets: Warsaw WIG20 Budapest BUX Prague PX

News editor of the day: Alan Crosby on +420 224 190 477; fax: +420 224 229 935

E-mail: prague.newsroom@reuters.com

Reuters Messaging: alan.crosby.reuters.com@reuters.net

((Compiled by Marek Petrus; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477)) ($1=21.09 Czech Crown)

[PRAGUE/Reuters/Finance.cz]