PKN Orlen lubricates market
Market anticipation of last week's contentious 2001 budget proposal kept investors on the sidelines, analysts said.
"Generally the mood on the market was very nervous," said Artur Szeski, an analyst with CDM Pekao Securities.
Volume was down 14.12% from the previous week to zl. 683.66 million ($155 million). The all-share WIG index finished the week down 0.86% at 19,642 points.
Activity picked up Friday when the country's largest oil group, Polski Koncern Naftowy (PKN) Orlen, went into its second public offering, attracting more than 30% of trade during the single-price auction. Shares were a bargain at zl. 20.5, analysts said. PKN Orlen, now approximately 72% privately held, saw 1.58 million or 4% of its shares sold off.
The market reacted positively to an announcement that the European Bank for Reconstruction and Development (EBRD) was selling its 9.17% stake in Kredyt Bank, Szeski said. But "I was expecting that if EBRD was selling, they'd get a better price (than zl. 21)," he said. Kredyt Bank shares ended the week unchanged at zl. 16.50.
The announcement that corporate banking competitors ING Barings Warsaw and Bank Slanski (BSK) are considering merging barely affected BSK, whose stock only went up 0.21% to finish at zl. 235 per share.
Rolling more quickly upwards were share prices of tire companies Stomil and Debica. Rumors have it that minority shareholders of Stomil, approximately 60% owned by Michelin, might decide to sell another chunk of the company to the international tire giant when a new member is introduced to Stomil's supervisory board, said Witold Chusc, a macro analyst with CDM Pekao Securities. That sent Stomil's value up 10.21% for the week to end at zl. 31.30 per share.
Likewise, Chusc said, news that Goodyear, which holds 60% in Debica, might also be positioning itself for an increased stake sent Debica up 7.99% to zl. 39.20 per share.
A slight loser for the week was media and publishing firm Agora. Last week's block trade of Agora employee stock was, according to analysts, a pioneer transaction, but it might have disappointed those who were hoping for a bigger chunk of the more than 7 million shares offered to be sold. Out of 96 B-series shareholders, 57 decided to sell their stocks and 1,148 out of 1,530 Agora's employees did the same with their D-series shares. In total, 1,205 employees placed shares worth zl. 181.5 million ($41 million) with institutional investors in a block trade by Schroder Salomon Smith Barney.
"Technically speaking, the coordinated sale was a success, especially if you look at the recent performance of Agora's stocks, varying from zl. 112-zl. 113," said Anna Hess, a CDM Pekao securities analyst. Last Friday, Agora finished at zl. 112, falling 2.61% on the week. "It's true that just days before the transaction its (Agora's) price was within the zl. 115 range but without the block trade the price could have dropped even more."
In a bid to limit a possible negative impact on the market, Agora persuaded its employees to sell their stock in a block trade. "Eventually, employees sold their stock at a price of zl. 104," Hess said. "But if those shares had entered the market in an unorganized way, because of their number and small volume, and possibly, due to psychological factors involved, the price could have really gone down." In addition, analysts expected the supply to be more substantial. "The fact that 1,200 employees placed their shares doesn't mean that they got rid of everything," Hess said. "I expect that in order to diversify the risk they left themselves part of their stocks and can still sell them later."
