Investors leave early for holiday
Everybody investors on the Warsaw Stock Exchange (WSE) included is awaiting the current account deficit results for March.
The feared macroeconomic indicator is expected to exceed 8% of gross domestic product (GDP) when released on May 4. That, combined with a series of national holidays in Poland, expected rate hikes in the United States, and volatile international markets contributed to low volume and little change from last week's lows, said Grzegorz Latala, analyst with Raiffeisen Capital & Investment Polska.
"If (the C/A deficit) is more than $1.1 billion, it's going to dump the market," Latala said. IT stocks, he said, already bottomed out last week.
The all-share WIG index ended 3.09% higher than the previous week at 19,631 points. Volume was down 10.54% with 534 million shares trading hands.
Though the market was down all around throughout most of the week, one stock in particular, Telekomunikacja Polska (TPSA), took a roller coaster ride, Latala said. "It's very volatile because of the speculation of the price which would be offered by the strategic investor," he said. "Definitely TPSA is the most observed stock."
On Friday, both France Telecom and Telecom Italia announced they had placed final bids for a 25% to 35% stake in the state-owned company. The sell-off is expected to be worth $2.6 billion-$3.6 billion.
In anticipation of this, TPSA, which ended the week at zl. 32.80 per share, up 5.81% from the previous week, bounced around between zl. 30 and zl. 40, Latala said.
And it wasn't only TPSA that caught analysts' attention. BRE Bank announced that Commerzbank, its strategic shareholder, which currently holds over 48% of the bank's shares, will increase its holdings to 50%. BRE also announced first-quarter results proving that although the merger with Bank Handlowy failed, the bank didn't suffer any serious financial damage. At the end of March the bank showed net profit of zl. 126.6 million ($30 million), which came as a positive surprise to the market.
"That's a very good result indeed," said Marek Juras, analyst with Erste Securities Polska. "We expected zl. 110 million-zl. 120 million ($26 million-$28.5 million)."
That's because of high-interest margins, but also due to BRE's profitable portfolio investments, Juras added. Already in 1999, the bank proved itself a savvy investor, showing the best net profit zl. 665 million ($171 million) in its 14-year history. In 1999, revenue from financial operations made up 43.8% of the revenue on banking operations, as compared to 19.1% in 1998.
BRE also announced its plans regarding a retail banking venture, which would take off by the end of the year. "We have to start this year, we have no choice," said Slawomir Lachowski, newly appointed to the BRE management board.
BRE has a strong position in corporate banking and while it started to develop its retail project, Multibank, the project had been abandoned due to the planned merger with Handlowy.
According to Wojciech Kostrzewa, BRE's president, a new retail project "will use what was the best" in the Multibank project, and then some. BRE's offer is to be addressed to "very demanding customers," and will be based on advanced technology and such distribution channels as PCs, mobile phones and both cable and satellite TV supported by a traditional network of branches.
On Friday BRE closed at zl. 140 per share, up 7.69% from the previous week's closing price.
