Stocks report: Strong GDP helps stocks

Despite a correction in US and Western European markets, Polish and Hungarian markets were up. The WIG20 once again broke through the 2,500-point level. However, the market was narrow and volume flat. Good GDP Q3 figures, which showed a 3.7-percent rise, were welcomed on the market. If Polish GDP is to rise next year at a comparable speed, stocks listed in Warsaw may have some room for further gains. The long predicted decision by the Monetary Policy Council to leave interest rates unchanged at 4.5 percent had no impact on stocks.

KGHM led the gains, with its stock breaking above the zł.50 mark and continuing to rise. High copper prices, hopes for telecom asset sales and the resulting large dividend next year are attracting investors. Dividend payouts in companies where the state has a controlling interest, are going to be a record in 2006. The huge government spending needs highlighted in the 2006 draft budget and record net income in companies such as KGHM, PKN Orlen and PKO BP will result in very high dividends. If companies continue to perform very well in Q4 2005, the dividend payout will be 100 percent of net income.

Adam Łaganowski,

Warsaw Investment Group (WGI)