Business notes
The station was offered to stations Nasza, TVN and Telewizja Niepokalanow, according to Rzeczpospolita sources, who said that the deal should be closed in two to three weeks. RTL-7 is reportedly being sold because its owners were not satisfied with the return they were seeing on the investment. Media watchers said that the station had misjudged the market, thinking that if it showed American movies from the 1980s it would attract a large audience. That has proved not to be the case, sources said.
n Privatization Notes
The failure of a third major privatization suggests that Poland may have already missed its best chance for state sell-offs, analysts said. A consortium of Austria's Voest-Alpine Stahl and Dutch Hoogovens said it had abandoned plans to invest in the Huta Sendzimira steel mill since the government had failed to clarify how the sector was to be restructured. The government's failure to ensure flat steel output from Sendzimira and its rival Huta Katowice as well as high investment costs, deterred the buyers. It was another blow to government revenue and struck at the heart of a steel job cut and production cutback scheme set down as a membership requirement by the European Union (EU). "The best time for privatizing Polish firms was two or three years ago. There was more confidence in emerging markets and many Polish companies had higher value," said Krzysztof Bledowski, chief economist at Wood & Co. "This period was to some degree wasted." The unfavorable climate has been vividly felt in the last month with two other deals refused by the Treasury Ministry because purchase offers were too low.
n Banking notes
The chief executive of BRE Bank, Wojciech Kostrzewa, has sold 1,600 of the bank's shares at zl. 75 each, the bank said. The bank's officials were not immediately available for comment.
Fitch IBCA, the international rating agency, has affirmed Pekao's ratings at a long-term outlook of BBB, a short-term of F3, an individual of C and a support of 2. At the same time, it has withdrawn its long-term, short-term and support ratings of Bank Depozytowo-Kredytowy (BDK), Pomorski Bank Kredytowy (PBKS) and Powszechny Bank Gospodarczy (PBG). The ratings were F3, BBB and 2, respectively, for each bank. BDK, PBKS and PBG were acquired by Pekao on Nov. 25, 1996, and fully merged into Pekao effective Jan. 1, 1999. They have ceased to exist in their own right.
n Capital markets
Shareholders of garment maker Vistula decided to earmark zl. 10 million ($2.85 million) for a share buyback. The shares will be bought on the market and retired by June 30. Vistula currently has six shares outstanding. The stock traded at zl. 9.95 million in the single-price auction system last week.
Spain's Campofrio Alimentacion bought 631,164 shares in a public bid for meat processing firm Morliny at zl. 18 per share, the Warsaw Stock Exchange (WSE) said. In the tender Campofrio, which wanted to buy up to 75% in Morliny, increased its stake in the firm to 2.4 million shares or 41.7%. Campofrio late last year purchased 1.8 million shares, or 31%, of the firm from National Investment Fund (NIF) Hetman. The other bidder, Animex has 9.1% of Morliny's shares and signed two initial agreements to buy 9.8% and 4.35% stakes. One of the largest Morliny shareholders, the state treasury, has not yet decided to whom it would sell the shares.
Erste Securities brokerage uprated BIG Bank Gdanski to a speculative "buy" from "hold" expecting share prices will rise on the bank's plans to capitalize its expenses on developing a retail network and a pension fund. Erste said the other reason for the upgrade was the expected profit the bank would have from the sale of its stake in Polifarb Cieszyn Wroclaw to Britain's Kalon, if Kalon calls a public tender for Polifarb's shares. "After including these two facts into our estimates we increase our consolidated 1999 net profit forecast from zl. 135 million to zl. 207 million ($39 million-$60 million)," Erste said. "As we expect this should have a very positive impact on the share price performance in the short term, we recommend BIG Bank Gdanski as speculative 'buy'," it said.
Construction firm Budopol Wroclaw said it planned to issue new shares, but gave no further details. "The management will start marketing operations connected to plans for a new share issue. These actions will be spearheaded by gathering information from potential investors about their interest in the new issue," the statement said. Budopol, which is listed on the free market of the Warsaw Stock Exchange (WSE), has 4.5 million shares outstanding.
Trading firm Universal has received the Securities Commission's decision delisting its shares and plans to appeal it within the required period of 14 days, Universal spokeswoman Agnieszka Szostek said. "We got the decision on Monday ... We are now analyzing it," she told Reuters. The Securities Commission withdrew Universal shares from public trade on Jan. 8, saying the firm had been failing to inform investors about market-moving information. Universal plans to appeal the decision. If the commission upholds the verdict, the firm wants to ask the Supreme Administrative Court to scrap it.
n Government and macro
Core inflation, which amounted to 9.5% in 1998, will probably fall below 8% in 1999, Cezary Jozefiak, member of the decision making Monetary Policy Council (RPP) said. "(Core) inflation will be slightly lower than in 1998, but no revolutionary changes are expected. It should be slightly below 8% (in 1999)," Jozefiak told a news conference. Jozefiak called for wider use of core inflation, which excludes the effects of external price fluctuations and seasonal changes on domestic prices, instead of the present benchmark - the consumer price index (CPI). The CPI index fell to year-on-year 8.6% in December 1998 from 13.2% at the end of 1997. Consumer prices are expected to grow some 6-8% this year.
More than three-quarters of Poles now favor the restoration of the death penalty, which has not been carried out since 1988, Poland's leading polling center said. Some 77% of those asked wanted capital punishment restored for the most violent crimes, PAP reported the public CBOS polling group as saying. It was the highest percentage in favor of the death penalty since the punishment was abandoned. A moratorium on putting convicted murderers to death has been in effect since 1988 and capital punishment was officially abolished last year. Observers attribute growing support for capital punishment to the crime rate, which has soared since Poland ditched its authoritarian communist regime in 1989.
Prime Minister Jerzy Buzek has sacked Deputy Health Minister Jacek Wutzow for fumbling a major reform of the medical system, the government spokesman said. Buzek dismissed Wutzow at the request of his boss, Health Minister Wojciech Maksymowicz, spokesman Jaroslaw Sellin said. His dismissal was one of the demands the Freedom Union (UW), the junior coalition party, made as a condition of remaining in the government with its larger partner, the Solidarity Election Action (AWS). Wutzow told PAP news agency his removal was the price that had to be paid for restoring industrial peace to the country. A major health reform introducing free-market elements to a medical system largely unmodernized since the pre-1989 communist era has been widely condemned as badly planned, underfunded and poorly implemented.
Finance Minister Leszek Balcerowicz criticized his government for dragging its feet on promised economic reforms and privatization. Balcerowicz wrote in a newspaper article that the delays pose a threat to Poland's European Union (EU) membership talks and could undermine a key social security revamp. "By further delays, we risk crises in many areas of the economy and increase strains in negotiations with the EU due to enforced subsidizing of such sectors," the minister wrote in daily newspaper Gazeta Wyborcza. Poland hopes to join the EU around the year 2003. Its outmoded farm sector, ailing heavy industries and heavy state involvement in the economy are seen as the biggest obstacles.
n Privatization Notes
The failure of a third major privatization suggests that Poland may have already missed its best chance for state sell-offs, analysts said. A consortium of Austria's Voest-Alpine Stahl and Dutch Hoogovens said it had abandoned plans to invest in the Huta Sendzimira steel mill since the government had failed to clarify how the sector was to be restructured. The government's failure to ensure flat steel output from Sendzimira and its rival Huta Katowice as well as high investment costs, deterred the buyers. It was another blow to government revenue and struck at the heart of a steel job cut and production cutback scheme set down as a membership requirement by the European Union (EU). "The best time for privatizing Polish firms was two or three years ago. There was more confidence in emerging markets and many Polish companies had higher value," said Krzysztof Bledowski, chief economist at Wood & Co. "This period was to some degree wasted." The unfavorable climate has been vividly felt in the last month with two other deals refused by the Treasury Ministry because purchase offers were too low.
n Banking notes
The chief executive of BRE Bank, Wojciech Kostrzewa, has sold 1,600 of the bank's shares at zl. 75 each, the bank said. The bank's officials were not immediately available for comment.
Fitch IBCA, the international rating agency, has affirmed Pekao's ratings at a long-term outlook of BBB, a short-term of F3, an individual of C and a support of 2. At the same time, it has withdrawn its long-term, short-term and support ratings of Bank Depozytowo-Kredytowy (BDK), Pomorski Bank Kredytowy (PBKS) and Powszechny Bank Gospodarczy (PBG). The ratings were F3, BBB and 2, respectively, for each bank. BDK, PBKS and PBG were acquired by Pekao on Nov. 25, 1996, and fully merged into Pekao effective Jan. 1, 1999. They have ceased to exist in their own right.
n Capital markets
Shareholders of garment maker Vistula decided to earmark zl. 10 million ($2.85 million) for a share buyback. The shares will be bought on the market and retired by June 30. Vistula currently has six shares outstanding. The stock traded at zl. 9.95 million in the single-price auction system last week.
Spain's Campofrio Alimentacion bought 631,164 shares in a public bid for meat processing firm Morliny at zl. 18 per share, the Warsaw Stock Exchange (WSE) said. In the tender Campofrio, which wanted to buy up to 75% in Morliny, increased its stake in the firm to 2.4 million shares or 41.7%. Campofrio late last year purchased 1.8 million shares, or 31%, of the firm from National Investment Fund (NIF) Hetman. The other bidder, Animex has 9.1% of Morliny's shares and signed two initial agreements to buy 9.8% and 4.35% stakes. One of the largest Morliny shareholders, the state treasury, has not yet decided to whom it would sell the shares.
Erste Securities brokerage uprated BIG Bank Gdanski to a speculative "buy" from "hold" expecting share prices will rise on the bank's plans to capitalize its expenses on developing a retail network and a pension fund. Erste said the other reason for the upgrade was the expected profit the bank would have from the sale of its stake in Polifarb Cieszyn Wroclaw to Britain's Kalon, if Kalon calls a public tender for Polifarb's shares. "After including these two facts into our estimates we increase our consolidated 1999 net profit forecast from zl. 135 million to zl. 207 million ($39 million-$60 million)," Erste said. "As we expect this should have a very positive impact on the share price performance in the short term, we recommend BIG Bank Gdanski as speculative 'buy'," it said.
Construction firm Budopol Wroclaw said it planned to issue new shares, but gave no further details. "The management will start marketing operations connected to plans for a new share issue. These actions will be spearheaded by gathering information from potential investors about their interest in the new issue," the statement said. Budopol, which is listed on the free market of the Warsaw Stock Exchange (WSE), has 4.5 million shares outstanding.
Trading firm Universal has received the Securities Commission's decision delisting its shares and plans to appeal it within the required period of 14 days, Universal spokeswoman Agnieszka Szostek said. "We got the decision on Monday ... We are now analyzing it," she told Reuters. The Securities Commission withdrew Universal shares from public trade on Jan. 8, saying the firm had been failing to inform investors about market-moving information. Universal plans to appeal the decision. If the commission upholds the verdict, the firm wants to ask the Supreme Administrative Court to scrap it.
n Government and macro
Core inflation, which amounted to 9.5% in 1998, will probably fall below 8% in 1999, Cezary Jozefiak, member of the decision making Monetary Policy Council (RPP) said. "(Core) inflation will be slightly lower than in 1998, but no revolutionary changes are expected. It should be slightly below 8% (in 1999)," Jozefiak told a news conference. Jozefiak called for wider use of core inflation, which excludes the effects of external price fluctuations and seasonal changes on domestic prices, instead of the present benchmark - the consumer price index (CPI). The CPI index fell to year-on-year 8.6% in December 1998 from 13.2% at the end of 1997. Consumer prices are expected to grow some 6-8% this year.
More than three-quarters of Poles now favor the restoration of the death penalty, which has not been carried out since 1988, Poland's leading polling center said. Some 77% of those asked wanted capital punishment restored for the most violent crimes, PAP reported the public CBOS polling group as saying. It was the highest percentage in favor of the death penalty since the punishment was abandoned. A moratorium on putting convicted murderers to death has been in effect since 1988 and capital punishment was officially abolished last year. Observers attribute growing support for capital punishment to the crime rate, which has soared since Poland ditched its authoritarian communist regime in 1989.
Prime Minister Jerzy Buzek has sacked Deputy Health Minister Jacek Wutzow for fumbling a major reform of the medical system, the government spokesman said. Buzek dismissed Wutzow at the request of his boss, Health Minister Wojciech Maksymowicz, spokesman Jaroslaw Sellin said. His dismissal was one of the demands the Freedom Union (UW), the junior coalition party, made as a condition of remaining in the government with its larger partner, the Solidarity Election Action (AWS). Wutzow told PAP news agency his removal was the price that had to be paid for restoring industrial peace to the country. A major health reform introducing free-market elements to a medical system largely unmodernized since the pre-1989 communist era has been widely condemned as badly planned, underfunded and poorly implemented.
Finance Minister Leszek Balcerowicz criticized his government for dragging its feet on promised economic reforms and privatization. Balcerowicz wrote in a newspaper article that the delays pose a threat to Poland's European Union (EU) membership talks and could undermine a key social security revamp. "By further delays, we risk crises in many areas of the economy and increase strains in negotiations with the EU due to enforced subsidizing of such sectors," the minister wrote in daily newspaper Gazeta Wyborcza. Poland hopes to join the EU around the year 2003. Its outmoded farm sector, ailing heavy industries and heavy state involvement in the economy are seen as the biggest obstacles.
