Bullish Nasdaq and blue chips lift WSE
The Warsaw Stock Exchange (WSE) gained ground last week on the back of bullish U.S.-market sentiment after a series of dismal sessions earlier in the month. Also a renewed round of alliance talks and general activity in Poland's corporate sector provided further pep for the market's strong growth.
"I think the boost for the WSE's growth last week came from two sides," said Benita Mikolajewicz, an analyst with ING BSK brokerage house. "Firstly, the Warsaw bourse was elevated by the rally of U.S. markets, in particular the Nasdaq. And the unexpectedly strong performance of some of the WSE's large caps on the back of a flood of corporate news kept the rise going."
The main WIG index, which tracks all WSE-traded stocks, closed 4.9% up to 15,701.1 points on Thursday. The blue chip WIG20 index rebounded 7.2% on the week to 1,494.4 points, while the TechWIG index of the SiTech segment of IT companies increased 8.1% to 966.2 points.
The Nasdaq rose 3.9%, or 83.14 points, to 2,282.02 points on the week.
In Poland, investors focused on IT and technology conglomerate Elektrim after France's Vivendi presented details of a plan to merge the conglomerate and its telecom unit. While Vivendi and Germany's Deutsche Telekom are wooing Elektrim's shareholders with competing proposals to restructure the holding, both are looking to gain control over Elektrim's flagship mobile telephony unit Polska Telefonia Cyfrowa. Elektrim's shares rocketed 23.4% to zl. 34.30 on the week.
Alliance speculations hovered around Poland's largest refiner Polski Koncern Naftowy Orlen (PKN Orlen), as Austria's oil concern OMV sent a letter of intent to the government expressing its interest in the refiner. The treasury plans to sell up to 18% of PKN Orlen to a strategic investor by November. According to market sources, the ministry has been negotiating the PKN Orlen sale with Austria's privatization agency. "The market is positive about OMV's offer for a stake in PKN Orlen," said Mariusz Pawlak of Societe Generale. "The offer means that 18% of PKN Orlen shares will not be floated on the WSE. Moreover, in speculative terms it's good to invest in PKN Orlen stocks now."
PKN Orlen's share price was off 9.8% to zl. 19.65 on the week.
Also software integrator Prokom, the owner of Poland's second-largest Internet portal Wirtualna Polska (WP), saw its stocks jump on the news that the country's dominant telecom Telekomunikacja Polska (TPSA) intends to take majority control of WP. Prokom's stocks ended the week up 9.7% at zl. 125.
The forthcoming week will be marked by the National Bank of Poland's Monetary Policy Council (RPP) meeting, renewing hopes for an interest rate cut. "The market is so strong that the speculations will not reverse its upward trend," Pawlak said. "However, if the RPP cuts rates, the stocks will probably jump even higher to test the 1,600-point level on the WIG20." The RPP cut interest rates twice this year by 200 basis points.
