RPT-Czech CEZ set for strong Warsaw bourse debut

(Repeats story published late on Tuesday)

By Piotr Skolimowski

WARSAW, Oct 24 (Reuters) - Czech power group CEZ is expected to make a strong debut on the Warsaw bourse on Wednesday as local cash-rich pension funds are likely to snap up shares in the market's first major utility, said fund managers and analysts.

Prague-listed CEZ, which is set to become the Warsaw bourse's largest company with market value of $22 billion, is also seen as a must-have stock for institutional investors since it is likely to enter the market's key blue-chip WIG 20 index, said analysts.

"The company's profile very well matches the needs of the local pension funds," said Piotr Zarebski, fund manager at PZU Asset Management in Warsaw.

"Only a few utilities stocks are listed in Warsaw right now while their liquidity is low and the scale of activities cannot be compared with CEZ," he added.

Warsaw's bourse, on which the capitalisation of domestic firms tops $130 billion, has been dominated by local banks, while the power sector is represented only by a handful of small players such as Bedzin or Kogeneracja.

Eight foreign companies, including Bank Austria and Hungarian oil group MOL have already listed in Warsaw, hoping their stocks would benefit from strong demand from influential pension and mutual funds.

Polish pension funds, whose total assets are over 100 billion zlotys ($32.37 billion) and growing, are allowed to invest no more than 5 percent of their premiums in foreign financial instruments.

Some fund managers, however, argued interest from local pension funds could be limited since part of the institutions might have already invested in CEZ shares.

"I don't expect huge demand as those who wanted to buy the stock have already done so in the Prague exchange," said Pawel Bogusz, fund manager at Bankowy pension fund in Warsaw.

CEZ stock has gained 40 percent over the past 12 months, driven mainly by rising electricity prices, foreign acquisitions and a dominant domestic position in both power production and distribution. It has outperformed the PX index, which has risen 16 percent.

It closed at 852.50 crowns on Tuesday, up 0.06 percent on the day but below the all-time high of 873 seen in February. The Tuesday close is a reference price for the Warsaw debut, which has been set at 116.40 zlotys per share, the Warsaw bourse said.

CEZ, in which the Czech state has a 68 percent stake, posted a 16.4 billion crown net profit in the first half, up 41 percent year-on-year.

CEZ has been on the acquisition trail through central and eastern Europe and the Balkans and has acquired power plants and distribution assets in Poland, Bulgaria and Romania.

It said in a prospectus ahead of the share listing in Warsaw that it was ready to use all 6-7 billion euros in cashflow it generates by 2009 for acquisitions. (Additional reporting by Jan Lopatka in Prague) ((Writing by Piotr Skolimowski; editing by Richard Barley; Reuters messaging://piotr.skolimowski.reuters.com@reuters.net; telephone +48 22 653 9716)) ($1=3.089 Zloty)

Keywords: UTILITIES POLAND CEZ