CDM Pekao muses merger

At the end of June, brokerage house CDM Pekao had a net profit of zł.75 million, against zł.43 million in the same period the year before. The broker's H1 revenues amounted to zł.191 million.

"It's been a very good period. We can already say that after the first eight months of 2006 our net profit exceeded that of the entire year 2005 [which was zł.92 million]. We could observe growth both in the retail and institutional sector," said Jakub Papierski, CEO of CDM Pekao.

Before the end of the year, the broker will prepare three to four IPOs worth zł.3 billion. The figure includes the public offer of Dom Development, the second-largest developer in the Warsaw market, whose issue prospectus was approved last week by the Securities and Exchange Commission (KPWiG).

"We believe that Dom Development's offer should be closed in October. It's worth a couple of hundred million złoty and I think within a year the company will join the WIG20 index," said Jacek Radziwilski, managing director at CDM Pekao.

CDM Pekao is the second-largest brokerage house in Poland with a 13-percent share in the total turnover of stocks on the WSE. Along with CA IB Securities and BM BPH it is part of banking giant Unicredit. It hasn't been decided yet whether, following in the footsteps of banks Pekao and BPH, the brokers will merge.

"We will start talks on this issue within the next six months and we will choose the best-case scenario. At the moment different concepts are being drafted," said Papierski.

According to Sobiesław Pajšk, director of the analysis department at CDM Pekao, in H2 2006 the most promising sectors for investors will be banking, automotive, construction and building-materials.

"Still, the decisive issue is not so much the sectors themselves, but the choice of the right companies within them," Pajšk said.