Political uncertainty scares away investments on the Warsaw Stock Exchange

On Wednesday share values dropped for the fifth time in a row on Warsaw Stock Exchange (WSE). The WIG, the key index on the WSE, lost 4% yesterday to close below an important technical line of 18,900 points. There are fears the WIG could fall below its 52 week low to 14,000. Everything depends on psychological factors more than on fundamentals. The slump is mainly caused by the unstable political situation, a drop in the value of information technology partnerships and weak macroeconomic data. "Slumps are caused by individual investors who decide about sudden changes of the indexes. [That's the time] Institutional investors buy shares," says ING BSK investment adviser Sebastian Buczek. He also claims that over the weekend important political issues should be cleared, in turn calming the market. (Parkiet, page 1) M.M.