IMF optimism boosts exchange
The Warsaw Stock Exchange (WSE) got a boost last week as international investors returned to the markets amid news the U.S. economy is beginning to slow down.
A positive macroeconomic appraisal from the International Monetary Fund (IMF) didn't hurt much either.
The all-share WIG index was up 5.75% to 17,675.6 points, while the blue-chip WIG20 was up 6.47% to 1,799.4 points and the MIDWIG was up 2.84% to 980.5 points. The telecom-heavy TECHWIG benefited from another wave of telecom fever that swept through Central Europe last week and was up 7.38% to 1,414 points.
Volumes shot up as well. Wednesday's turnover of zl. 453 million ($103 million) was one of the highest in the WSE's history. Telekomunikacja Polska (TPSA), the Polish phone giant, was responsible for zl. 4 million ($909,000) of the turnover. TPSA's share value jumped to zl. 28.30 per share by Thursday's close, up 12.75% from the previous week.
"TPSA is a highly speculative stock at the moment," said Krzysztof Kaczmarczyk, an analyst at Deutsche Research. "Maybe Kulczyk Holding and France Telecom decided to buy some shares from the market."
There's speculation that the two companies, which together bought 35% of TPSA in July and hold options to buy shares at zl. 40 in 2001, may have decided to get in while the prices are considerably lower, Kaczmarczyk said.
"The problem is they can't do it officially," he said. Polish exchange law prevents investors holding more than 33% of a company from buying another 2% of that company's shares without official clearance. But the law is difficult to monitor.
Other Polish heavyweights also saw prices up last week, notably oil group Polski Koncern Naftowy Orlen, up 3.79% to zl. 21.90 at Thursday's close, copper miner KGHM Polska Miedz, up 6.64% to zl. 27.30, and Bank Pekao, up 10.34% to zl. 65.10.
"Generally there is very good sentiment to emerging markets right now," Kaczmarczyk said.
The IMF, in its assessment of Poland's economy released Wednesday, influenced that sentiment when it said annual inflation should fall to 6-8% next year from October's 9.9%. It expects the current account deficit to improve as well, although it forecasts it to remain above 6% of gross domestic product.
Interest rates, currently at 19-23%, will also come down in 2001, the IMF said.
Even Elektrim acted positively to the news, though it had seen share prices plummeting earlier in the week. Rumors that the telecom and energy conglomerate owes zl. 2.7 billion ($613 million) in unpaid value-added taxes saw Elektrim shares dive 10% in a matter of minutes Wednesday to zl. 44.
Elektrim management called an emergency meeting and then issued a statement denying the accusation.
Elektrim was up 2.84% to zl. 47 by Thursday's close. "Shareholders saw that it definitely wasn't true that they didn't pay taxes," Kaczmarczyk said, adding that it looks like someone may have started the rumor to manipulate Elektrim's share price.
Another reason the stock may have headed upward again was the sacking of Polska Telefonia Cyfrowa's (PTC) CFO, Stanislaw Majewski, he said. The mobile phone company is owned by Elektrim and Deutsche Telekom.
Majewski was officially fired for "unsatisfactory performance," Kaczmarczyk said. Though PTC lost zl. 64.8 million ($14.7 million) during 1999, it recently announced a net profit of zl. 36.8 million ($8.4 million) through September 2000.
