IT stocks fall; investors flock to Net
Though the Warsaw Stock Exchange's (WSE) downtrodden TechWIG was on its way up during mid-week trading last week, the technology-heavy index was back down to the previous week's lows before it was all over.
Analysts said a volatile NASDAQ probably influenced the TechWIG it was down almost 1% for the week on the back of several weeks' losses but said the summer vacation season and Tuesday's upcoming holiday kept turnover low.
The broad-market WIG index saw volume up 14.81% from last week's lows to zl. 664.25 million ($154.48 million), but was down 0.21% to 18,756.3 points.
Telephone monopolist Telekomunikacja Polska (TPSA) again grabbed analysts' attention by losing 9.27% on the week, ending at zl. 28.4. It lost roughly the same amount three weeks ago on the heels of its announcement that it had sold a strategic stake to France Telecom.
An analyst, who wished to remain anonymous, said market speculation over an employee share sell-off in November played a role as did news that France Telecom is pressuring TPSA to purchase its 33% stake in mobile phone group Centertel. Investors are concerned TPSA might pay too much for the stake, the analyst said.
Other IT stocks with continued losses were financial software producer Softbank and systems integrator ComArch, which saw 3.61% and 5.56% losses, respectively, and ended the week at zl. 80 and zl. 136. A few IT companies held the index up, however, after positive quarterly results.
"They even advanced slightly during the week," said Benita Mikolajewicz, an equity analyst with ING Barings Securities. Prokom and Optimus were both up more than 4% for the week to zl. 196 and zl. 169 per share.
"This shows that results are also important for investors," Mikolajewicz said. "The IT companies that are in good financial condition also perform better."
But some companies, especially smaller ones with low liquidity, still see share prices skyrocket when they announce internet plans.
Atlantis, for example, a light-industrial construction firm that recorded losses last year, saw share prices surge 40.31% when it announced it was abandoning its construction activities to get into the internet business, Kwiatkowski said.
Mikolajewicz said some smaller-scale retail investors apparently still view the internet as a fail-safe business venture.
Ocean, however, last week's glad-not-to-own-it stock that plunged 78% on bad quarterly showings, also announced internet plans, but only to limited availability. The textile trading company was up 3.97% for the week to zl. 3.14.
Bank Pekao was also up. This week's glad-to own-it stock jumped 6.92% to zl. 55.6 after the nation's largest private bank announced its net profit had nearly doubled in the second quarter. Restructuring by parent UniCredito Italiano, it seems, is boosting profit, as are Poland's exorbitant interest rates. The bank also raised its 2000 net profit forecast by 36% to zl. 750 million. Deutsche Bank reacted to the positive news by upgrading its investment rating on the bank from "market perform" to "buy."
Telecom and power conglomerate Elektrim also finished the week up 1.53% to zl. 50 per share, though the stock was down most of the week on news that Netia is looking to buy Millennium Communications (see page 1), a firm that has worked alongside Elektrim in Warsaw.
In related news, Elektrim and AIG Emerging Europe Infrastructure Fund (EEIF) said last Wednesday they ended their second round of discussions to acquire the telecom firm Polish Telecom Operators (PTO).
Ewa Bojar, Elektrim's spokeswoman, said the two firms decided not to proceed with an acquisition because the transaction would not be profitable considering PTO's high license fees.
Roseanne Gerin contributed to this report
