Orbis, Elektrim wake up sleepy week
The WIG ended Wednesday up 1.4% from the previous week's close, settling at 15,800.3. Main market volume amounted to zl. 351.7 million ($90.2 million), 42% below the previous five-day week. The market was closed Thursday and Friday for the Corpus Christi holiday.
"The week was rather sleepy, the volume was relatively low," said Artur Szeski, an analyst at CDM Pekao Securities.
He said he did not expect the situation to change much in the coming week. "The volume will increase of course, but not the prices."
While few events really sparked investors' interest, Szeski said that news about hotel and tourism company Orbis did cause some talk.
Deutsche Bank last week purchased 15.4% of the company from the state treasury and almost immediately resold the shares to other institutional investors.
"There are still too many unclear things in that transaction, such as why Deutsche Bank sold the shares for the same price it had paid," Szeski said. "The information that these shares will be converted into GDRs (global depository receipts) has not been confirmed."
Deutsche Bank paid zl. 31.1 a share for the Orbis stake. On Wednesday, the company's shares were trading at zl. 33.8, up 1.5% over the previous Friday.
Other market news included Credit Suisse First Boston's announcement May 26 that it planned to downgrade Bank Handlowy from a "neutral" to a "sell."
CSFB lowered its 12-month price target from zl. 50 to zl. 35 a share. The reason for downgrading was Handlowy's 42% drop in first-quarter revenue, and a sluggish, 1.4% expansion in its loan portfolio. CSFB said it expects Handlowy's net revenue to come in 25% lower for the year.
"This recommendation has to be viewed in the context with the bank's price," Szeski said. "The price was volatile in March and then it came down as the market was going up. Recently it has risen again."
He also pointed out that the bank had not moved quickly enough to roll out its retail network or stave off increasing competition for its corporate business.
"Our recommendation has been neutral for a very long time," Szeski said.
Bank Handlowy closed at zl. 45.9 on June 2, down 1.92% from the previous Friday.
Conglomerate Elektrim was the subject of discussion again as its subsidiary Regionalne Sieci Telekomunikacyjne El-Net was expected to finally receive the long-awaited local telecommunications license for Warsaw. The Communications Ministry on Wednesday was expected to officially award El-Net the disputed license, which competitor Netia had protested. Whether that had actually happened or not, however, was not clear by press time. If the license did go through, El-Net would have received it just one day after Elektrim announced that it had increased its stake in the firm to 90% from 60%.
The bad news is that El-Net will most likely be required to pay the entire $300 million fee for the Warsaw license before the end of this year, instead of in installments over five years. The Communications Ministry did not want to comment on that decision.
"It could be a way to put pressure on El-Net to agree to split the license with Netia," said Michal Buczynski, a telecom analyst at COK Banku Handlowego brokerage.
Elektrim's share price rose 4.3% from the previous Friday, closing at zl. 48.5 on Wednesday.
"The week was rather sleepy, the volume was relatively low," said Artur Szeski, an analyst at CDM Pekao Securities.
He said he did not expect the situation to change much in the coming week. "The volume will increase of course, but not the prices."
While few events really sparked investors' interest, Szeski said that news about hotel and tourism company Orbis did cause some talk.
Deutsche Bank last week purchased 15.4% of the company from the state treasury and almost immediately resold the shares to other institutional investors.
"There are still too many unclear things in that transaction, such as why Deutsche Bank sold the shares for the same price it had paid," Szeski said. "The information that these shares will be converted into GDRs (global depository receipts) has not been confirmed."
Deutsche Bank paid zl. 31.1 a share for the Orbis stake. On Wednesday, the company's shares were trading at zl. 33.8, up 1.5% over the previous Friday.
Other market news included Credit Suisse First Boston's announcement May 26 that it planned to downgrade Bank Handlowy from a "neutral" to a "sell."
CSFB lowered its 12-month price target from zl. 50 to zl. 35 a share. The reason for downgrading was Handlowy's 42% drop in first-quarter revenue, and a sluggish, 1.4% expansion in its loan portfolio. CSFB said it expects Handlowy's net revenue to come in 25% lower for the year.
"This recommendation has to be viewed in the context with the bank's price," Szeski said. "The price was volatile in March and then it came down as the market was going up. Recently it has risen again."
He also pointed out that the bank had not moved quickly enough to roll out its retail network or stave off increasing competition for its corporate business.
"Our recommendation has been neutral for a very long time," Szeski said.
Bank Handlowy closed at zl. 45.9 on June 2, down 1.92% from the previous Friday.
Conglomerate Elektrim was the subject of discussion again as its subsidiary Regionalne Sieci Telekomunikacyjne El-Net was expected to finally receive the long-awaited local telecommunications license for Warsaw. The Communications Ministry on Wednesday was expected to officially award El-Net the disputed license, which competitor Netia had protested. Whether that had actually happened or not, however, was not clear by press time. If the license did go through, El-Net would have received it just one day after Elektrim announced that it had increased its stake in the firm to 90% from 60%.
The bad news is that El-Net will most likely be required to pay the entire $300 million fee for the Warsaw license before the end of this year, instead of in installments over five years. The Communications Ministry did not want to comment on that decision.
"It could be a way to put pressure on El-Net to agree to split the license with Netia," said Michal Buczynski, a telecom analyst at COK Banku Handlowego brokerage.
Elektrim's share price rose 4.3% from the previous Friday, closing at zl. 48.5 on Wednesday.
