Okocim rises on Carlsberg speculation
The market experienced another quiet week, with many investors cautious before the U.S. Federal Reserve meeting Feb. 2 and the expected release of poor current-account data.
The all-share WIG index slipped 0.7% on the week, closing Friday at 19,765.5, while volume continued its decline, falling 17.19% to zl. 1.1 billion ($268.3 million). "It's hard to call it a downward trend," said Pawel Puchalski, an analyst at Dom Inwestycyjny BRE Banku. "It's just profit taking after the high rise of the index since October."
Pawel Zach, an analyst with Citibank (Poland), said that the market was still wary given fears of a U.S. interest rate hike, which may be as high as 50 basis points, while at the same time December's current account deficit looks set to hit $1.2 billion. However, despite the unease, certain stocks managed to outperform the market, including paper company Swiecie, which rose 22.36% to close Friday at zl. 19.7 per share. He said the price rise came with the announcement of impressive fourth-quarter earnings.
In addition, various IT stocks rallied after the previous week's tumble, with Softbank surging 6.41% to close at zl. 191, while Prokom rose 3.3% to finish at zl. 155. Piotr Wozniak, an analyst at CDM Pekao Securities, said that, after having taken profits the week before, investors were going back into tech stocks in the belief they will be 2000's best performers. "But it's a risky business; they are very volatile," he said. Another top tech stock, ComputerLand, fell 4.02% to finish at zl. 83.6.
Troubled brewery Okocim was again the subject of speculation last week, rising 11.64% to zl. 21.10 on the news that Denmark's Carlsberg Group may divest of its stake in the Polish brewer. Carlsberg is expected to sell its stake to Kulczyk Holdings, owner of Euro Agro Centrum (EAC). EAC, together with South African Breweries (SAB), controls Kompania Piwowarska, Poland's second-largest brewery, which enjoys a 22.7% market share.
Okocim, which watched its market share drop from 9.7% in 1997 to 7.4% in the first three quarters of 1999, has long been the subject of takeover rumors. Those rumors have been further fueled by Carlsberg's reluctance to help Okocim build a distribution chain or to invest in a new brewery. This time however, speculation is stronger after Carlsberg two weeks ago upped its stake in Okocim to 47%. Analysts said that may have been a move by Carlsberg to gain a larger stake, which it could then sell at a higher price. Speculation that Carlsberg will sell could drive Okocim's share price up to as much as zl. 30, said Rafal Wiatr, an analyst at Citibank.
"It appears that this time it may be something serious," Wiatr said. "Something will happen this year and Carlsberg appears to be giving up." Carlsberg would not comment on divesting of its stake in Okocim. "We have no further comments to make. We are committed to Okocim," said Henrik Moelstroen, Carlsberg's public relations director. Moelstroen also refused to detail what specific investments Carlsberg has made in Okocim in recent years.
Wiatr said that rumors on the market suggest two possible scenarios: either Kompania Piwowarska purchases Okocim, bringing its market share up to around 30%, or another foreign brewer gets there before it. He said that current speculation suggests that Germany's Holsten, the majority shareholder in Brok, may be interested in putting in a bid, which would bring its market share up to around 10%. However, Franke Udo, head of public relations at Holsten, denied this. "We will not buy it," he said.
