Tech stocks strong amid mild trading
Strong high-tech earnings reports and a fairly steady week for U.S. technology stocks fueled some Polish equities last week during mild trading, although the Warsaw Stock Exchange (WSE) lost some of the gains it had made through April, brokers and analysts said.
"The market generally is in an upward tendency," said Piotr Dudzinski, a broker with Dom Maklerski Banku Handlowego. "The IT sector, together with Agora and Telekomunikacja Polska (TPSA), is very strong. We can see quite a big demand for IT stocks. The reason is the good technical situation of the Nasdaq."
The WSE's market-inclusive WIG index closed down a fraction last week at 15,569.37, the blue chip WIG20 was down 1.09% to 1,483.16 and the TechWIG dropped 1.72% to 972.36. Even with the slight downturn, blue chip stocks are up more than 12% since the WIG20 hit 1,317.33, and tech issues are up 16.7% since the TechWIG hit 833.20 on April 4, both 52-week lows.
Volume last week registered zl. 1.28 billion ($320 million). This week is expected to be especially mild with the possibility of a light downturn, in part because holidays will limit trading to only three days.
Poland's leading high-tech firms posted strong unconsolidated sales in the first quarter of 2001, according to preliminary information released by the companies, helping to boost shares last week.
"Prokom, ComputerLand and ComArch's quarterly results were very good," said Maria Skowron-Szafranska, an IT analyst with CDM Pekao Securities. "Other companies like Softbank and Optimus were very disappointing."
Software company Prokom's stock was up 2.52% to zl. 122, software maker ComputerLand's shares were up 5.07% to zl. 99.50 and Krakow-based IT firm ComArch's share price was up 5.5% to zl. 57.50 for the week ending Thursday. Softbank was down 1.58% to zl. 43.60 and Optimus fell 0.36% to zl. 55.80.
Skowron-Szafranska said that overall 2001 could be a tough year for IT firms because the economy will grow slowly and government contracts, a main source of revenue, are expected to be few.
"This year will be very difficult for these companies," she said. "In the long term, these companies are very good for investors but in the short term they are subject to the Polish economy and dependent on the public sector."
In the financial services sector, Netherlands-based ING Group last week ended an effort to raise its stake in Bank Slaski, finishing with 74.7% of the company's shares.
"This means that ING can merge its Polish branch with Bank Slaski," Dudzinski said. ING started its bid with a 55% stake and bought another 1.83 million shares for zl. 477 during a public bid. Some minority shareholders had resisted the move but the treasury, which sold its stake to the foreign company, backed ING. Slaski's share price was up 3.46% to zl. 269 for the week.
The week would not be complete without mentioning the continuing Elektrim-Vivendi battle. Investment funds holding a stake in power and telecom company Elektrim said on Thursday they will back a plan for France-based Vivendi to swap shares in a telecom joint venture for Elektrim shares, raising Vivendi's stake in the Polish group to more than 60%, Reuters reported. If the agreement works out, Vivendi would be able to oust Elektrim's management and scrap its potential deal with Deutsche Telekom. Elektrim's shares were off 9.34% to close at zl. 30.10 Thursday.
"I think that this price shows that Vivendi will win the battle and investors are slightly afraid of the majority shareholder," Dudzinski said, noting that minority investors are concerned they will have no influence on the company.
