Market edges up on targeted interest
Shares on the Warsaw Stock Exchange (WSE) rose with the all-share WIG Index closing up 2% on the week on Friday at 14,887.8. But any optimism from the upturn was cooled by thin trading with volume down 27% at zl. 303 million ($76 million) on the week.
"It was a rather, more or less, stable market," said Piotr Gawrys, head of sales at Raiffeisen Capital & Investment. But, he added, "in general the activity was rather low."
Friday proved the exception, according to Mariusz Pawlak, an equities salesman at SG Bank. At the close of the week, investors showed strong interest Bank Slaski, Elektrim, Bank Pekao, Bank Handlowy and Stomil Olsztyn, he said.
It's hard to say who specifically was buying shares, said Pawlak, speculating it could have been funds. Activity would not last, he said, but die off by the beginning of this week. Pawlak forecast the WIG could drop to 13,900 as early as this week.
But that could stimulate a rebound, based in part on low valuations making certain stocks more attractive, market watchers said.
Other market supports could come from Polski Koncern Naftowy's (PKN) initial public offering (IPO) planned for early November, said Gawrys of Raiffeisen. The Monetary Policy Council's (RPP) decision this week not to raise interest rates was also helpful, he said.
Elektrim was in the spotlight last week after courts dismissed a move by Deutsche Telekom to block Elektrim from upping its stake in mobile telephone operator Polska Telefonia Cyfrowa (Era GSM). Elektrim is looking to build its stake in Era GSM and transfer ownership to one of its subsidiaries. In the balance is $615 million in funding from Vivendi that would pave the way for Elektrim to build its telecom presence.
"This was seen as a very positive signal for Elektrim," Pawlak said. Trading was suspended on Thursday due to demand and closed at zl. 39 on Friday, climbing 18% on the news, but only 10.5% on the week.
Last Tuesday, the Banking Supervisory Commission cleared Deutsche Bank to increase its stake in BIG Bank Gdanski from 10% to 25%. This caused a one-day jump on BIG BG shares from zl. 8.1 to zl. 8.6 on the continuous market. BIG BG returned any gains by week's end, closing Friday at zl. 8.1.
Rumors also circulated last week that either Deutsche Bank or Citibank would want to buy into Bank Handlowy. Gawrys also stressed that this was mere speculation but said: "Whether it's true or not, it should have an impact," he said.
In info tech news, a price of zl. 16 was set for the new share issue by systems integrator Ster-Projekt. Dom Inwestycyjny BRE Bank completed the bookbuilding last week, and subscriptions for the D series shares takes place through Thursday this week. Ster-Projekt, which specializes in fulfilling IT contracts with the armed forces, national police and border guards, is traded on the over-the-counter (OTC) market. The D-series shares will be sold in two tranches, with 500,000 shares available to small investors and 1 million reserved for institutional investors.
The company projects 1999 earnings of zl. 8.2 million ($2.05 million) on sales of zl. 180 million ($45 million). Ster-Projekt projects earnings will grow 34% next year to zl. 11 million ($2.75 million) on the back of zl. 250 million ($62.5 million) sales. Ster-Projekt plans to launch on the Warsaw main market by the end of the year, said Monika Sadowa, spokeswoman at the company.
Gregory Keller contributed to this report.
