Elektrim issue fails to drive flat market
By : Jeffrey Sparshott
Telecom and power group Elektrim along with a handful of blue chip stocks drove up and then let fall an otherwise directionless Warsaw Stock Exchange (WSE) last week during relatively light trade.
"The beginning of the week was under the pressure of Elektrim but the rest of the week the market was very quiet and the turnover was low," said Piotr Dudzinski, a broker with Dom Maklerski Banku Handlowego. "Even big-caps are quiet at the moment."
The blue chip WIG20 index fell by less than 1% to 1,394.52 while the TechWIG slid slightly to 893.77. The WIG index, which tracks the market, shed 0.1% to close Thursday at 14,959.65. Turnover was zl. 1.2 billion ($300 million), up slightly from the previous week. Barring unexpected news, brokers expect the market to continue to move horizontally.
Elektrim drove the market leading up to, and following, an all-day shareholders meeting Monday that saw France's Vivendi Universal backslide in its battle with Deutsche Telekom (DT) to control the heavily traded blue chip. The power struggle coincided with Elektrim's chief executive officer announcing her resignation, a minor victory for Vivendi, but left the French company with direct control of only two of nine seats on Elektrim's supervisory board. The board will decide between the German group and Vivendi when choosing a partner for mobile telecom firm Polska Telefonia Cyfrowa (PTC).
DT directly and indirectly controls 49% of PTC. Elektrim and Vivendi, through a holding company, control the remaining 51%.
"The outcome will be dependent on which party is more determined to pay more, simply," said Wlodzimierz Giller, a stock analyst with Erste Securities. Details on offers from Vivendi and DT are limited and it is too early to predict which way the shareholders will lean, he said. The offer from Vivendi, however, appears more attractive at this point, he added.
Last month Vivendi proposed to swap a minority stake in the company it holds jointly with Elektrim for stock in Elektrim. DT's competing offer would pay $400 million for Elektrim's telecom assets but the Polish company would lose part of its stake in the sector. The company's stock ended the week up more than 4% to zl. 29 per share.
Other companies making waves in the market included mining and telecom company KGHM Polska Miedz, up more than 2%, oil company Polski Koncern Naftowy Orlen (PKN Orlen), down more than 2%, and Pekao bank, which held steady, analysts said, though overall interest in the market was limited.
Beer-maker Okocimskie Zaklady Piwowarskie (Okocim) remained in the spotlight as Denmark-based Carlsberg Breweries last week announced a public tender for all outstanding shares in the company. Carlsberg offered zl. 16.25 per share, a premium of about 30% over the stock's average price this year. The company's share price was up 2.4% to zl. 14.75 per share by Thursday's close.
Carlsburg's offer was the sixth tender on the WSE's main market this year and coincided with Sweden's NCC plans to buy 75% of Gdansk-based civil engineering firm Hydrobudowa on the exchange's secondary market.
"I think between now and the end of the year we can expect some more tenders," said Adam Kalkusinski, head of sales at Wood & Co. "This situation is quite similar to the process in 1999 ... when prices were depressed after the Russian crisis and that sparked foreign interest. This year prices are attractive and there are takeover opportunities.
"Okocim was the story of this week. I wouldn't be surprised to see four or five more tenders this year," he said.
