Stocks report: Market falls asleep

The strengthening of the złoty along with a neutral global market outlook resulted in no signs of profit-taking in Warsaw. Fund managers, who only by tracking the WIG20 had 25 percent profits in 2005, are waiting for the year to end and book their results on clients' accounts. The analysts, overly optimistic for 2006, have no reason to sell right now. There are, however, two factors that could be indicators of an end to the two-year bull market in Poland.

The first is the technical situation. The WIG20 looks really the same as in 2000 after the 'dotcom bubble'. If fresh capital doesn't attack the WSE, a fall below 2,500 points will be a very clear sell signal.

The second factor is macroeconomics. The market expects Polish GDP to grow at a similar pace as in 2005. However, there are signs, supported by Monetary Policy Council (RPP) members' statements, that the interest-rate-cuts cycle is over. 

Adam Łaganowski,

Warsaw Investment Group (WGI)