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The Warsaw Voice » Business » March 5, 2008
Month in Review
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February See-Saw
March 5, 2008 By Michal Jeziorski   
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The Warsaw Stock Exchange's (WSE) main blue-chip WIG index saw ups and downs in February as the market experienced a change of mood.

An optimistic beginning and middle of the month were followed by a nose-dive, with bears taking the upper hand over bulls. The market performed poorly, mainly due to an absence of willing buyers. The banking sector was especially weak, as the WIG-Banki index plunged near to the January low.

If bad news starts to hit trading floors abroad, the Polish stock market is bound to lose out. This is mainly due to loss of confidence in a continued bounceback on global markets. Consequently, few are feeling inclined to pay higher prices. And with demand remaining low, a sudden plunge might come easily.

Central Statistical Office (GUS) data does not look too optimistic, with inflation reaching 4.3 percent against the projected 4.1 percent. Of some consolation is that pay increased by 11.5 percent against the expected 9.8 percent, and employment by 5.9 percent against the expected 4.9 percent. But that does not save the day.

Interestingly, investors on the NewConnect alternative trading market appear to be especially partial to pizza. Shares of the Maxipizza restaurant chain, debuting on the market, reported a 202-percent rise at opening. The company, based in Kielce, southeastern Poland, runs four restaurants, and a fifth one is to open soon in Zakopane, a popular holiday resort in southern Poland, with four more later this year. Share prices of the debuting Optopol also increased by 45 percent at opening.

The end of February saw the publication of results for the fourth quarter of 2007. Most companies reported growing profits, with some exceptions. For example, the losses at Mediatel went up by 150 percent, and the company's share price dropped by 6.7 percent. On the other hand, Bomi's profits nearly doubled, and its share price went up by 1.7 percent. The quarter turned out to be favorable for ZCH Police, but less so for Groclin. KGHM and PKN Orlen reported good results.

February's best news is that, as expected, the sales of leading public companies reached zl.156 billion in 2007, an all-time record figure, up by 19 percent on the previous year. Banks topped the list of fastest developing companies, with construction firms and developers placing second. Their success was due to a boom on the residential market. The WSE leader was KGHM again, with profits of nearly zl.4 billion, followed by PKO BP bank and PKN Orlen.

In the third week of March, Poland's first capital-protection structured certificates, issued by Deutsche Bank, will appear on the WSE to allow dealings on other markets. They will enable investment in markets in several countries, including Turkey, Russia, Croatia, Slovenia and Georgia. Possible gains will stem from changes in the value of the basket of investment funds specializing in New Europe markets. The three-year capital protection as guaranteed by the issuer means that, even if things take an unfavorable turn on the stock market, the investor will obtain no less than 100 percent of the issuing price.
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