Trading strong despite Warset glitches
Despite technical glitches following the introduction of the long-awaited Warset IT system last Friday, the Warsaw Stock Exchange (WSE) ended the week without any serious casualties.
Although adjustment to the new system left Friday's closing numbers unknown until after press time, the all-share WIG index finished down 1.24% for the week by Thursday's close at 16,225 points. Volume was down 52% to zl. 561.27 million ($124 million).
Warset, which promises to speed up transactions and add a series of new trade vehicles, performed satisfactorily on its opening day. "Generally, the transactions went quite smoothly," said a spokesman for CA IB Securities after getting a consensus from traders. Downward market trends continued for the week. "The downward trend came to a halt, but then Optimus pushed the market downward again," said Tadeusz Kozaczynski, head of research at CA IB. "It just got hammered."
The computer group's share price plunged 20% Wednesday and Thursday to zl. 121.50 on news that strategic investor ITI Holdings plans to sell Optimus' lucrative Internet assets. Kozaczynski said he normally expected share prices to go up in such a situation, especially considering ITI will pay 50% above market prices for its strategic stake.
ComputerLand and Agora also saw stock prices fall after giving the thumbs up to a joint venture company that will provide e-commerce services. The new company, Centrum Handlu Internetowego (CHI), is expected to start doing business next year. The company's planned activities range from an Internet shopping mall to call center services and accounting solutions. ComputerLand was down 2.68% to zl. 109, while Agora lost 2.35% to end up at zl. 83.
Announcements about Internet start-ups, even from companies with solid reputations and customer bases, don't turn heads at all these days, Kozaczynski said. "Now it takes even more than ambitions and sensible plans," he said. Bank Pekao was up another 4.86% to zl. 56.10 after gaining more than 8% two weeks ago. Even though a recent public offering met limited success because institutional investors thought zl. 49 per share was too high, investors changed their minds.
CA IB issued a "buy" recommendation on the stock with a 12-month target price of zl. 70 per share. "This is a fundamentally strong stock," Kozaczynski said. "A nice restructuring story." Wielkopolski Bank Kredytowy (WBK) was up 7.30% to zl. 23.60 after Allied Irish Bank announced it would merge its two Polish subsidiaries, WBK and Bank Zachodni.
Last week's low volumes were influenced by uncertainties over Warset. Marcin Andrzejczuk, a broker with Amerbroker, said his brokerage was well prepared for the new system, which made the changeover relatively painless. "It's easier and better than the old one," he said.
Minutes after trading started over the new network, the WIG index shot up 6% and calculations of the index were suspended for the rest of the day. The WSE told a press conference the glitch had been caused by human error. Somebody entered into a computer wrong numbers that were used to make certain calculations, officials said.
Warset's hardware and software correlate with systems used in Euronext, which was formed through the merger of the Amsterdam, Paris and Brussels exchanges. Andrzejczuk said brokers would benefit most from speedier transactions and an expanded offering of order vehicles, including limit orders, stop orders, day orders and hidden orders to come into play in several months' time.
