Yahoo! optimism buoys market
Finance Minister Jaroslaw Bauc's obscure 2001 budget proposal continued to hold down market activity, but positive second-quarter Yahoo! earnings had pretty much the same effect on the Warsaw Stock Exchange (WSE) as they did on markets the world over, analysts said.
The world's leading web portal had seen its share prices down 25% in recent weeks, but stellar second-quarter results sent global TMT (technology, media and telecoms) indices up Thursday. Poland's "new economy" TWIG index, which lost 11% in July, subsequently rose 3.4% to 1,757.7 points Thursday.
"Most of the IT companies trading in Poland have a stake in a horizontal portal," said Gregorsz Latala, head research analyst at Raiffeisen Capital & Investment Polska. "The whole sector is correlated."
TWIG growth would have been more substantial weekly growth was just 1.8% if mixed reactions and disagreements over Bauc's budget proposal hadn't been clouding investor sentiment for a second week, Latala said.
Overall volume was up 17.06% for the week to zl. 800.31 million ($181 million). The broad-market WIG index was up 0.94% to 19,658 points. Roughly 0.6% of that happened during the market's last session.
Concerning individual stocks, Elektrim, Polski Koncern Naftowy (PKN) Orlen and Orbis got the brunt of analysts' attention last week.
Share prices of power and telecom group Elektrim decreased at the beginning of the week until brokerage Wood & Co. sold off a 4.9% stake in the group. The mere fact that anybody would sell such a considerable stake in a big company led to speculation that a strategic investor was lurking in the shadows, Latala said. Wood & Co. sold 4.1 million shares worth zl. 200.7 million ($45.6 million) to an unnamed buyer. Elektrim stock was up 7.30%, finishing the week at zl. 50 per share.
PKN Orlen closed Friday at zl. 20.80 and was up only 1.46% during the first full week of its second public offering. Trade volume for the nation's largest oil group was heavy, however, and the current share-price is considered a bargain by analysts.
A press announcement Thursday that hotel chain Orbis had signed an agreement with a consortium led by French hotel group Accor, in which Accor committed to keep Orbis' workforce at 8,500 employees until 2003, didn't do much for Orbis stock. It was down 1.23% to zl. 32.10 per share at week's end.
The consortium is expected to take 35.4% in Orbis, which operates 53 hotels in Poland, but the state's sale tender is still officially open for undisclosed additional bidders.
Though brokerage houses are expecting shares to go for zl. 45 when final talks begin, presumably with the Accor consortium, Latala said the market is expecting something closer to the zl. 30-zl. 35 range.
Also on Friday, the Sejm sent a piece of legislation to the Senate known as the "mass privatization act," which in several years' time will see housing cooperatives handing over full-ownership rights to flat owners.
If the act passes, economists are predicting chaos as flat owners with new liquidation rights begin selling flats and creating inflationary demand with their new income, Latala said. The government will also lose out on untold amounts of revenue, he said.
"Whichever way you look at it, it's wrong for the economy," Latala said. And "this is a concern for the market as well."
