Stocks report: WSE holds its breath

Prices in Warsaw are 27 percent higher than four months ago and the market has started a rather flat correction period. There are no signs of pessimism on the market, however, and elections polls showing a huge rise in support for Civic Platform (PO) resulted in a stable situation on the stock market.

The IPO of PGNiG, the oil and gas exploration and distribution company, attracted investor funds but it could be a main halt to the bull market in Warsaw. The PGNiG public offer came, however, with a threat that the election winners PO and Law and Justice (PiS) will bring some of the company's assets back under the control of the state. If this really happens after the elections, the market can react very negatively - the unprecedented nationalization of previously-sold assets could cause some investors to flee and threat Poland with multi-million dollar lawsuits.

Last week's fall in crude prices resulted in strong corrections for oil companies. PKN Orlen, MOL and Lotos were heavily sold off after the euphoric run for stocks. PKN was the main cause of the slight fall of the WIG20. On the other side, the banks were still very strong, along with GTC. The market is still very narrow, the majority of volume comes from the five biggest stocks and thus it is hard to call the current situation a strong bull market.

Adam Łaganowski,
Warsaw Investment Group (WGI)