Elektrim, PKN Orlen highlight flat week
Warsaw Stock Exchange (WSE) (http://www.wse.com.pl) investors last week tuned into lackluster financial results from Poland's leading oil refiner and the financial sector as the market dipped in trading that was limited by two holidays. Analysts said market sentiment could be dampened in the coming sessions.
"We don't expect a strong performance from the market over the next couple of weeks," said Artur Szeski, director of research for CDM Pekao, citing last week's financial results, unimpressive company reports expected this week and the Monetary Policy Council's (RPP) decision two weeks ago not to cut interest rates as influences on market sentiment.
At Wednesday's close, the market-wide WIG index was down 2.15% to 15,234.8, the blue chip WIG20 fell 3.04% to 1,438.14 and the TechWIG slipped 3.66% to 936.75. Volume was a scant zl. 702.5 million ($175 million) because the market was closed Tuesday and Thursday.
The technology-focused Nasdaq enjoyed a four-session rally until Wednesday, boosting the index by more than 35% from its April 4 two-year low, though it fell Thursday.
Poland's leading oil refiner and retailer, Polski Koncern Naftowy Orlen (PKN Orlen), dragged down the WSE when it unexpectedly reported a first-quarter net loss of zl. 15.7 million ($3.9 million) on Monday. (See story on page 3)
"PKN Orlen reported a net loss, which was kind of surprising for market players," Szeski said. "That was why the stock was down for the week."
The company accredited a slowing economy, and thus lower demand, for its worse-than-expected results.
In heavy trading, PKN Orlen's stock fell 8.29% to zl. 18.25 on the week.
Outdoor advertising firm Art Marketing Syndicate (AMS) stepped back into the spotlight when it rejected a second attempt by a company to buy a chunk of its stock. French advertising group Jean Claude Decaux attempted to buy 25% of AMS but backed off Wednesday when it became apparent that not enough shareholders would sell. Decaux bid zl. 70 million ($17.5 million), or zl. 66 per share, but BB Investment, AMS's main shareholder, rejected the offer.
Polish media group Agora last month bid for 25% of AMS but also failed when its zl. 70 per share offer was rejected.
"JC Decaux has failed with its bid but this was no surprise because its offer was lower than Agora's," said Ulrich Konstanzer, an equity analyst with Erste Securities Polska.
AMS' stock fell 1.93% to zl. 66.20 for the week.
Power and telecom group Elektrim was again one of the heaviest-traded stocks on the WSE as more news surfaced about the company's battle with France's Vivendi Universal. Elektrim on Monday said it would not give control of fixed-line telecom assets to Deutsche Telekom (DT), allowing instead a letter of intent signed in December to expire. Moody's Investor Service cut Elektrim's credit rating following the announcement.
The deal was a main point of contention between Elektrim and Vivendi. The French company has been trying to gain control of Elektrim's management board and keep DT at bay. Elektrim's shares slid almost 11% to zl. 26.80.
The market ignored National Bank of Poland (http://www.nbp.pl) figures on the current account deficit. The current account gap reached $742 million in March, about 5.3% of gross domestic product on a 12-month rolling basis, against February's $461 million, or 5.7%.
"The numbers had no influence," Konstanzer said.
Hoga, which will become the region's second listed Internet portal on May 9, last week set the price for its initial public offering at zl. 4.50 per share. The subscription for 2 million new shares is scheduled to run from May 9 to May 16.
