New highs lead to suspensions on the exchange
The decision came after the Privatization Ministry wrote a letter to the exchange explaining that employees in the companies who were also shareholders were involved in the negotiation process and, therefore, were aware of the price under negotiation.
All shareholders in the companies should have a right to such information, and the exchange decided to suspend the stock because of uneven treatment of shareholders, said Piotr Szeliga, WSE vice president.
The two companies continually hit all-year highs last week and Monday following speculation among investors that Goodyear is going to take a stake in Debica and Michelin in Stomil Olsztyn. By Monday, Debica had risen 2.5% from its Friday price to zl. 41.20 ($17) and Stomil was up 4.2% to zl. 24.80 ($10). Stomil was the second-highest gainer last week, up 7.4% on the week. Debica didn't show such firm gains finishing at zl. 40.2 ($16.4) but still up nearly 4%.
It was still unclear at press time who the investors in Debica and Stomil Olsztyn would be. Officials at Debica said they were unable to confirm whether Goodyear would be the buyer. While officials at Stomil Olsztyn said there was interest from Michelin the outcome of the sale is in the hands of the Privatization Ministry.
The good financial results of the two tire companies also influence their strong performance on the exchange, said Cezary Iwanski, analyst at Bank Pekao brokerage house. Stomil's net profits of zl. 62 million ($25 million) for the first 10 months of this year were up 8% in real terms on sales of zl. 283 million ($116 million), up 25% also in real terms.
Debica is showing the same upward trend with net profits of zl. 39 million ($16 million) for the first 10 months of the year, up 51% in real terms on sales of zl. 412 million ($168 million), up 22%.
Another high riser on the exchange last week was construction company Mostostal Gdansk, which debuted last Wednesday. The company's share price rose 21% to zl. 5.8 ($2.40). Mostostal Gdansk is one of the smallest on the exchange, with the fourth-smallest market capitalization of nearly zl. 16 million ($6.5 million) as of last Friday. The company's successful initial public offering - oversubscribed by 60% - was probably the reason why Mostostal Gdansk's first day on the exchange went so well, said Pawel Wielgomas, analyst with Polski Bank Rozwoju (PBR) brokerage office. The company has good fundamentals and is similar to other smaller companies in the construction sector, he said. Mostostal Gdansk's net profits of zl. 1.2 million ($500,000) for the first ten months of this year were up 33% in real terms on net sales of zl. 47 million ($19 million) up 26% in real terms. The company's stock valuation makes it more expensive than its competitors, Wielgomas said. Mostostal Gdansk was trading at a price/earnings ratio of 17.6 based on 1994 earnings last Friday, whereas Mostostal Warszawa was trading at a p/e of 15.3 last Friday.
All shareholders in the companies should have a right to such information, and the exchange decided to suspend the stock because of uneven treatment of shareholders, said Piotr Szeliga, WSE vice president.
The two companies continually hit all-year highs last week and Monday following speculation among investors that Goodyear is going to take a stake in Debica and Michelin in Stomil Olsztyn. By Monday, Debica had risen 2.5% from its Friday price to zl. 41.20 ($17) and Stomil was up 4.2% to zl. 24.80 ($10). Stomil was the second-highest gainer last week, up 7.4% on the week. Debica didn't show such firm gains finishing at zl. 40.2 ($16.4) but still up nearly 4%.
It was still unclear at press time who the investors in Debica and Stomil Olsztyn would be. Officials at Debica said they were unable to confirm whether Goodyear would be the buyer. While officials at Stomil Olsztyn said there was interest from Michelin the outcome of the sale is in the hands of the Privatization Ministry.
The good financial results of the two tire companies also influence their strong performance on the exchange, said Cezary Iwanski, analyst at Bank Pekao brokerage house. Stomil's net profits of zl. 62 million ($25 million) for the first 10 months of this year were up 8% in real terms on sales of zl. 283 million ($116 million), up 25% also in real terms.
Debica is showing the same upward trend with net profits of zl. 39 million ($16 million) for the first 10 months of the year, up 51% in real terms on sales of zl. 412 million ($168 million), up 22%.
Another high riser on the exchange last week was construction company Mostostal Gdansk, which debuted last Wednesday. The company's share price rose 21% to zl. 5.8 ($2.40). Mostostal Gdansk is one of the smallest on the exchange, with the fourth-smallest market capitalization of nearly zl. 16 million ($6.5 million) as of last Friday. The company's successful initial public offering - oversubscribed by 60% - was probably the reason why Mostostal Gdansk's first day on the exchange went so well, said Pawel Wielgomas, analyst with Polski Bank Rozwoju (PBR) brokerage office. The company has good fundamentals and is similar to other smaller companies in the construction sector, he said. Mostostal Gdansk's net profits of zl. 1.2 million ($500,000) for the first ten months of this year were up 33% in real terms on net sales of zl. 47 million ($19 million) up 26% in real terms. The company's stock valuation makes it more expensive than its competitors, Wielgomas said. Mostostal Gdansk was trading at a price/earnings ratio of 17.6 based on 1994 earnings last Friday, whereas Mostostal Warszawa was trading at a p/e of 15.3 last Friday.
