TPSA weighs heavily on lackluster market
While global market conditions continued to weigh upon Poland's exchange, a much more local factor began to take its toll - the upcoming initial public offering (IPO) of Telekomunikacja Polska (TPSA).
Polish investors are revving up for the announcement of the price range for up to 25% of the phone company's IPO Oct. 14, and the final-issue price announcement Nov. 7. The offering will take place between Oct. 19 and Nov. 10.
Domestic investors, particularly small investors, are preparing for the IPO by selling off other shares, said Marcin Billewicz, an equity analyst with ING Barings.
TPSA "will become increasingly part of people's thinking as we near one of the clear dates associated with that offering," said Stephen Pettyfer, an analyst with Merrill Lynch.
While TPSA's IPO may create a short-term downturn on the market, over the long-term it could have a positive effect, said Daniel Kwiatkowski, a salesman for Raiffeisen Capital & Investment Polska. The IPO will draw foreign investors to the market because "this company is so huge that the market capitalization of our stock exchange will be doubled."
Another significant market event this week was the government's announcement that Bayerische Hypo-und Vereinsbank has exclusive rights to negotiate a strategic-investor position with Bank Przemyslowo-Handlowy (BPH). The announcement boosted BPH's share prices, with the stock closing at zl. 225 Friday, a 4.2% hike over last week's finish. (See also WBJ, Oct. 5-11, 1998.)
On Friday, Hypo-und Vereinsbank announced that it was offering about double the current market price of BPH, placing the number at approximately zl. 450-zl. 480, Billewicz said. "German banks have to be here so they're willing to pay such a price," he added.
Regarding local companies listed on overseas markets, Nasdaq-listed @Entertainment's shares plummeted 36% over last week reaching an all-time low of $5 per share Thursday before edging up to $5.125 on Friday. The share value of the company, which operates the largest cable television network here and just officially launched the country's first digital television platform, has dropped by more than 75% from its IPO price a little more than a year ago.
Among the reasons for the sell off, analysts cited the fact that Canal+ Polska, the country's largest pay-TV channel, said it was ready to launch its own digital platform at the end of October. Also, over the last two weeks the French-owned station said it had signed a letter of intent to include into its platform the country's most popular television channels - public broadcaster Telewizja Polska (TVP) and privately owned Polsat. "It's a natural flight from risk," said Louis Kerner, equity analyst with Goldman Sachs in New York. In his opinion, the drop was also influenced by low turnover as well as the fact that many emerging markets shares are seeing investor withdrawals. "Otherwise, operationally, @Entertainment is in splendid condition," he said.
Looking to this week, the market is expected to continue in a sideways pattern with the main influence being the upcoming TPSA sale. "I see more of the same," Pettyfer said. "We seem to have a lot of global forces at work."
"In my opinion, the best-case scenario is a flat performance," Billewicz said. "Investors will be waiting for the price" of TPSA.
Polish investors are revving up for the announcement of the price range for up to 25% of the phone company's IPO Oct. 14, and the final-issue price announcement Nov. 7. The offering will take place between Oct. 19 and Nov. 10.
Domestic investors, particularly small investors, are preparing for the IPO by selling off other shares, said Marcin Billewicz, an equity analyst with ING Barings.
TPSA "will become increasingly part of people's thinking as we near one of the clear dates associated with that offering," said Stephen Pettyfer, an analyst with Merrill Lynch.
While TPSA's IPO may create a short-term downturn on the market, over the long-term it could have a positive effect, said Daniel Kwiatkowski, a salesman for Raiffeisen Capital & Investment Polska. The IPO will draw foreign investors to the market because "this company is so huge that the market capitalization of our stock exchange will be doubled."
Another significant market event this week was the government's announcement that Bayerische Hypo-und Vereinsbank has exclusive rights to negotiate a strategic-investor position with Bank Przemyslowo-Handlowy (BPH). The announcement boosted BPH's share prices, with the stock closing at zl. 225 Friday, a 4.2% hike over last week's finish. (See also WBJ, Oct. 5-11, 1998.)
On Friday, Hypo-und Vereinsbank announced that it was offering about double the current market price of BPH, placing the number at approximately zl. 450-zl. 480, Billewicz said. "German banks have to be here so they're willing to pay such a price," he added.
Regarding local companies listed on overseas markets, Nasdaq-listed @Entertainment's shares plummeted 36% over last week reaching an all-time low of $5 per share Thursday before edging up to $5.125 on Friday. The share value of the company, which operates the largest cable television network here and just officially launched the country's first digital television platform, has dropped by more than 75% from its IPO price a little more than a year ago.
Among the reasons for the sell off, analysts cited the fact that Canal+ Polska, the country's largest pay-TV channel, said it was ready to launch its own digital platform at the end of October. Also, over the last two weeks the French-owned station said it had signed a letter of intent to include into its platform the country's most popular television channels - public broadcaster Telewizja Polska (TVP) and privately owned Polsat. "It's a natural flight from risk," said Louis Kerner, equity analyst with Goldman Sachs in New York. In his opinion, the drop was also influenced by low turnover as well as the fact that many emerging markets shares are seeing investor withdrawals. "Otherwise, operationally, @Entertainment is in splendid condition," he said.
Looking to this week, the market is expected to continue in a sideways pattern with the main influence being the upcoming TPSA sale. "I see more of the same," Pettyfer said. "We seem to have a lot of global forces at work."
"In my opinion, the best-case scenario is a flat performance," Billewicz said. "Investors will be waiting for the price" of TPSA.
