Little trading leaves market stable
Though the U.S. Federal Reserve Board left short-term interest rates unchanged for the time being, global sentiment preceding the announcement likely pushed the Warsaw Stock Exchange (WSE) south in the early part of the week, analysts said.
Volume was up 63.29% to zl. 796.10 million ($181 million) and the all-share WIG index finished the week flat at 19,642.70 points, down 0.42% from the previous week.
All in all, little active trading and no major climbers or plungers meant a stable and unspectacular market, said Sebastian Siejko, equity salesman with CA IB Securities.
Even the U.S. situation had minimal effect: "Foreign influences right now are not as strong as they used to be," he said.
Stocks that did see activity were, as in past weeks, oil giant Polski Koncern Naftowy (PKN) Orlen and telecommunications conglomerate Elektrim. PKN Orlen's second public offering ended Friday, meaning 110 million new shares will be floated on the WSE, Siejko said. Also, PKN began trading on the FTSE All-World market Friday. "I think it's going to make the stock more popular," he said. PKN Orlen was down 2.33% for the week at zl. 21 per share.
Elektrim, though up 2.25% from the previous week to zl. 50 per share, didn't have good news to report after its shareholders met Friday. Though the company had hoped to issue 17 million shares as global depository receipts (GDR), 5 million to employees and 3.1 million to internet companies, shareholders voted to allow only the latter. They apparently were not satisfied with explanations as to how income from the issues would be used, Siejko said. "That's quite a surprise. It looks like Elektrim is in desperate need of money," he said.
Another company with problems is Optimus, Poland's largest computer manufacturer. Although IT analysts were not startled by a zl. 11.7 million ($3 million) consolidated net loss in 1999, they said they could only speculate about the causes due to a stock exchange commission gaffe.
Most analysts were unable to read the Securities and Stock Exchange Commission's (KPWiG) electronic version of Optimus' annual report after the regulatory body recently changed the format of its financial reports for Polish companies listed on the WSE, said Marcin Sadlej, an IT analyst at CDM Pekao Securities.
But without having seen the company's 1999 report, analysts speculated on the causes for the loss based on Optimus' previous financial record.
Benita Mikolajewicz, an equity and IT analyst at ING Barings, said the company's weak performance at the operating level and the lack of revenue generated by its internet portal Onet.pl led to the loss. Optimus owns the internet subsidiary Onet.pl, formerly Optimus Pascal, which operates the portal. The site is one of the most popular search engines in Poland.
Optimus recorded a zl. 26.8 million ($7.7 million) net profit in 1998 after cashing in on some transactions between the parent company and its subsidiaries, Mikolajewicz said.
But despite last year's profit, the company has suffered losses at the operations level for the last two to three years, she added.
Jacek Dzierwa, an analyst at Salomon Smith Barney in London, said the 1999 loss resulted from "the operating difference in the core business of PCs" and the "heavy ad spending in the internet (subsidiary), which is not generating any profit yet."
Investors, however, were unfazed by the news. After the company released its financial results last Wednesday, the price of Optimus' stock dropped only 1% to close at zl. 208.
