WSE rallies after NASDAQ recovery
The Warsaw Stock Exchange (WSE) last week saw an overall recovery after hitting its low point for the year two weeks ago.
The broad-market WIG index was up 8.79% to 16,241.6 points, having dropped below the 15,000 psychological barrier during the previous week. Volume was up 12.4% to zl. 531.28 million ($118 million).
"The general idea is that Polish investors were looking at U.S. indices this week," said Piotr Dudzinski, Citibrokerage broker, adding that there were late-week NASDAQ recoveries in IT and telecom stocks.
The WSE's mini-NASDAQ, the TechWIG, was up nearly 11% for the week to 1,420.9 points, with telecom firm Netia surpassing all others with 34.62 in gains and finishing the week at zl. 83.60 per share.
"We have no idea why the company gained 40% (in the last 10 days)," Dudzinski said. "There's no reason, just no reason."
The company has recorded substantial financial losses while attempting to compete with tele-giant Telekomunikacja Polska (TPSA) in the fixed-line market, Dudzinski said. Now that it hopes to dish out about e650 million for one of five universal mobile telecommunications system (UMTS) licenses to go on offer, its financial standing could look even bleaker in the near future, he said.
Poland's blue chips also saw modest gains, with such headline grabbers as KGHM Polska Miedz, Polski Koncern Naftowy (PKN) Orlen and Elektrim up 9.79%, 11.95% and 6.58%, respectively, to zl. 25.8, zl. 17.8 and zl. 40.5.
PKN, the country's largest oil refiner with a roughly 60% market share, could inch up an additional few percentage points next week, Dudzinski said. "I think the company has its worst times behind it," he said.
One company witnessing a remarkable recovery in recent weeks was media group Agora, owner and publisher of leading daily Gazeta Wyborcza, up 20.79% for the week to zl. 86. Once traded at above zl. 131.90 per share, Agora hit a low of zl. 60.5 not too long ago, but has gained 40% in the last 10 days, Dudzinski said.
"Agora is generally seen as a very good company with a great future," he said.
After trading closed Friday, Agora released preliminary third-quarter results showing a net profit of zl. 107.3 million ($23.3 million).
Anna Hess, an analyst with CDM Pekao Securities, said Agora's profits will not look as good as they might have in the second half of 2000 considering zl. 22 million ($4.8 million) will be going into an internet project and zl. 33 million ($7.3 million) into further capital expenditures.
The preliminary results submitted to the Central Statistical Office (GUS) show net sales of zl. 595,224 and operating profits of zl. 138,258.
Already claiming 80% of the Warsaw newspaper market, the company is trying to diversify. It now owns radio stations and 12% of pay television channel Canal Plus+, Hess said. The internet project, a digital version of Gazeta Wyborcza, will serve as a horizontal portal for financial and localized information and services.
Hess said the media giant always follows through on stated plans right on schedule. "In my opinion, the company is very well managed," she said.
One factor that could have dissuaded investors in the recent past is a decline in revenue from the company's advertising divisions, Hess said. But even that looks pretty good, she added.
Though media competitors on average spend 18.18% of earnings on press advertising, for Agora it's roughly 20%, she said.
