Boom time on the WSE, but will the bubble burst?

The summer rally on the Warsaw Stock Exchange has pushed the shares of the largest banks to an all-time high, prompting market watchers to reassess their valuations and prospects. Among the main gainers are Pekao and BPH PBK, which have now taken the top position in terms of price on both d omestic and European markets with trailing price-earning ratios at 43 and 19 respectively. "The soaring price of banks' shares does not come from their good results or better forecasts for the nearest future, but rather stem from a huge capital inflow to the market from investment funds," said Jakub Korczak of CA IB Securities. According to analysts, investors are now looking towards more liquid stocks and are bidding up prices, but at the same time increasing market investment risk. Others claim that the trend is not a new phenomenon on the bourse and is merely a reflection of investors' hope in a better future. (Parkiet, p. 1) J.K.