Warsaw Stock Exchange WIG index drops below psychological threshold

The Warsaw Stock Index (WIG) dropped below the psychological threshold of 18,000 points yesterday. The last time the WIG dropped to such a low level was before Christmas 1999. The most significant decreases in value were of the largest companies such as Polski Koncern Naftowy (PKN) Orlen, Telekomunikacja Polska S.A. (TPSA), and Elektrim S.A. The sharp decrease in the WIG was a response by investors to the deteriorating macroeconomic data. But high inflation, lower than expected increases in industrial output and the projected high cost of third generation UMTS licenses are not the only problems influencing the Warsaw Stock Exchange (WSE) and the economy. "The new cabinet that will be chosen, according to public opinion polls, does not say even a word about an economic program," said a CDM Pekao analyst. "The key moment for the market will be the Monetary Policy Council (RPP) meeting on Aug. 30 and the end of the holiday period," said Erste Securities adviser Grzegorz Zawada. (Parkiet, page 1, 2)