WIG and WIG40 slide as investors re-think strategies

WIG40, the mid-cap index, took an even more severe hit, falling by more than 4% for the second day running. Together, Wednesday and Thursday's losses wiped zł.25 billion off WSE stocks, making it one of Europe's worst-performing bourses this year. Several billionaire investors, notably Leszek Czarnecki, saw huge losses in the value of their holdings, but the impact will be most acute for Poland's 3 million retail investors. In fact, it was major withdrawals by retail investors that triggered the recent sell-off, as mutual-fund managers had to sell big in order to unlock cash. "Many investors reassessed their strategies in the new year and those who felt disappointed by the 2007 performance are withdrawing money from mutual funds and putting it into bank deposits," said Zbigniew Jagiełło, CEO of TFI Pioneer Pekao, adding: "If there is no major rebound in the stock market soon, we will see more withdrawals in January than in previous months." Some experts believe the bursting of the mid-cap bubble will continue as many companies remain overvalued. Even so, the fate of WSE indices will be determined much more by global investors as they react to the signs of a recession in the US. (Gazeta Wyborcza, p. 32; Parkiet, p. 1; Puls Biznesu, p. 1) R.M.