Nervous investors mean volatile WSE
Following signals from abroad, the Warsaw Stock Exchange endured a turbulent five days plummeting to two-year lows early but regaining ground by the weekend.
"It's pretty volatile, I would say," said Michal Szymanski, an investment manager at ING BSK Asset Management. "Investors are very nervous so any kind of news that appears to be important triggers a very strong reaction."
All major indices were up in a strong day of trading Thursday but they could not recoup all earlier losses. The market-inclusive WIG index finished the five days ending Thursday down 1.52% at 14,399.39. The market-leading WIG20 was off 1.75% to 1,347.36 and the TechWIG fell slightly to 866.59. Trading was light for the week at zl. 1.07 billion ($260 million), down 1.7% from the previous five days.
In the United States, markets surged Thursday, with the Dow Jones posting its second-biggest point gain ever and the Nasdaq rallying against the three-day slump. For the week, the Dow Jones was up 1.21% but the Nasdaq still slipped nearly 2%. Leading European indices were barely down.
"We see the influence of foreign markets on our market," said Dariusz Kowalski, deputy director of portfolio management at Pekao bank. "Rebounds on the U.S. market and in Europe have a great influence on our market. (Thursday) we saw a better situation."
Support for the WIG20 appeared to hold above 1,300, giving investors some hope. "When the market didn't break this support, we saw some rebound in the short term," Kowalski said. "High-tech and telecom stocks will be particularly strong in the next few sessions."
Kowalski projected that the WIG20 could bounce into the 15,000-16,000 range through the next month or two, though long term the market will likely endure a downward trend.
As has been the case for the past several weeks, speculation on the fate of telecoms and power group Elektrim was fierce, making it the heaviest-traded stock.
"This is one of the biggest companies listed on the stock exchange," Szymanski said. "At the same time there are very deep problems so it's pretty obvious that that drives everybody's interest."
French company Vivendi Universal, which owns 49% of Elektrim's telecoms unit, was angered by Elektrim's move last year to sell fixed-line phone operations to Deutsche Telekom, and the companies have been locked in a fierce management struggle since. Elektrim's stock was down 0.72% to zl. 27.40 per share.
Netia, Poland's second-largest fixed-line telecom operator, has fallen about 70% since the company debuted on the WSE, but in strong trading Thursday it picked up 6.8%. Because of the severe drop during the past three months, some rebound is possible, Kowalski said. The stock ended the week off more than 8%, closing at zl. 31.20 per share.
Reacting to favorable investor sentiment generally toward tech and telecom issues, IT stalwart Prokom was strong on the week and telecom giant Telekomunikacja Polska (TPSA) always one of the most active shares helped steady the TechWIG index with solid gains Thursday. Prokom gained 8.28% during five days to close the week at zl. 102. TPSA surged 4.5% Thursday but was still down 2.33% on the week at zl. 21.
Continuing a trend this year, investors ignored domestic economic figures announced last week. The Central Statistical Office (GUS) said that the current account deficit shrank to $449 million in February from January's $932 million on strong exports and weak domestic demand, while business climate indices showed construction and retail sectors gaining some confidence and manufacturing dipping. The market was mostly indifferent.
