WSE trading becalmed
The WIG20 index closed at 1,063.7 points on Friday, losing 0.7% for the week, reflecting an anemic market, as turnover was merely zł. 110 million ($26 million). And Polish investors largely shrugged off poor news in the U.S., such as profit warnings from General Electric and Philip Morris, and in Germany, which just put the kibosh on the operations of its tech-dense Neuer Markt - once the exemplar of Europe's New Economy.
"On the one hand the (WSE) was quite strong in relation to other countries," said Michał Mierzwa, an analyst at Erste Securities Polska.
In the U.S., the Dow Jones Industrial Average fell 101 points, or 1.27%, while the Standard & Poor's 500 Index lost six points, or 0.76%.
However, listed companies were not immune from news closer to home.
Analysts said one of the biggest losers on the market was Prokom Software, whose shares lost 3.03% on Friday and 6% on the week.
"I think that the company is going to fall even further to zł. 80," said Sławomir Dęmbowski, an equity research analyst at Bank Handlowy.
Investors were discerning, but they refused to pursue sell-offs in full sectors, and instead looked at financial data company by company.
"In terms of sectors, it's difficult to pick sectors," Mierzwa said.
But, of course, it can be done.
"The bank sector is quite strong compared to technology," Dembowski said. "And I think that it may rebound (further)." He declined to say how high the banking segment would climb in the future. The exchange's WIG-Bank index closed at 21,586.1 points, down 0.31% on Friday.
Mierzwa said that the reason for investors' dislike for technology companies, and recently for Prokom in particular, was simple: "The IT sector is bad."
"Banks were really strong up to the beginning of June; after that, the Polish banking sector fell," he said. "They will rebound by the end of October."
Dęmbowski also said that investors are and will be keen on Polish banks, even though the mass of them reported disappointing second-quarter earnings, mainly because other industries are so weak and Polish pension funds have to invest in something.
For the next few months, analysts touted only a handful of stocks, especially Telekomunikacja Polska (TPSA), Polski Koncern Naftowy Orlen (PKN Orlen) and KGHM Polska Miedź.
"They are very undervalued," Mierzwa said, referring to TPSA and KGHM. "The market punished the stocks too much in recent months."
But PKN Orlen shares should lure investors due to the recent news that it would partner with U.K.-based Rotch Energy to buy No. 2 Rafineria Gdańska (RG). PKN shares had jumped 2.8% immediately on the news.
"It was helped in the privatization of the Gdańsk refinery," Mierzwa said. "Most of it depends on third-quarter results."
And recent events in the U.S. and Europe - with discussions about a possible U.S.-led war with Iraq - did not threaten the market last week, analysts said.
"I think that investors are waiting to hear about the war in the Persian Gulf (and) macroeconomic data from the U.S.," Mierzwa said.
The European Union's own bid of confidence could bring about more foreign investment to Poland's markets with a confirmation of the country's EU membership later this year, he added.
But the relatively few active investors in Poland still have to confront the situation at hand.
"Foreign investors have been out of the market for a few months, pension funds have had delayed payments from the Social Insurance Administration (ZUS), and companies don't report any good news," Mierzwa said.
