Telecom market plunges to 31-month low, affecting blue chip stocks

Poland's largest telecom companies: TPSA, Netia and Elektrim, lost from 5% to 20% of their value and pulled the rest of the market near a 31-month low yesterday. Vast sale orders and waning demand brought the TPSA and Netia shares to their lowest since they entered the Warsaw Stock Exchange (WSE). Elektrim prices fell by 9.9% to their lowest in 5 years,at zl.7.9, after the company failed to meet the deadline to complete talks with Vivendi last week. Netia lost nearly 40% of its value in two consecutive sessions. The blue-chip WIG-20 index fell by over 2.1% to 1,118.6, while the TechWIG index plummeted by 4% to its lowest point ever. According to market analysts, the panic among investors is a consequence of the negative rumors surrounding the telecom companies. The Treasury Ministry's talks with France Telecom pertaining to the sale of a 10% stake in TPSA have now reached a deadlock. Netia's credit worthiness is declining, while Elektrim is still in talks with Vivendi about their strategic partnership. Merril Lynch specialists believe the situation on the market could improve with the arrival of some good news, such as the sale of TPSA shares to France Telecom. (Gazeta Wyborcza, p. 19, Reuters) M.T.K.