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The Warsaw Voice » Business » May 7, 2008
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Month in Review: April Showers
May 7, 2008 By Michal Jeziorski   
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The Warsaw Stock Exchange failed to spring back to life in April despite marked improvements on the world's leading equity markets.

The stock market here has been stagnant since January despite the sound fundamentals of the Polish economy and strong corporate-sector performance. The WSE may still be able to catch up with Wall Street and other exchanges, but time is working against the Warsaw bourse, analysts say.

April saw a number of new listings in Warsaw. Marketing/technology company K2 Internet hit the market, but shed 6 percent at the close of its first trading session. Other companies to make a debut in April included ZREMB Chojnice and Perfect Line. The latter, a Warsaw-based IT company, gained 212.5 percent on its first trading day on the WSE's NewConnect alternative market.

In the first quarter of this year, 18 new companies were listed on the WSE, four on the regulated market and 14 on the NewConnect alternative market. All the new entrants are headquartered in Poland. The number of debuts was larger than in the first quarter of 2007, yet smaller than in the fourth quarter of last year, when a record 42 companies were floated, including 28 on the main market. In terms of the number of IPOs, the WSE ranked second in Europe after the London market, where 20 companies were floated in the first quarter of this year. The average IPO on the main Warsaw market was worth 6.5 million euros, versus 20.1 million euros in the previous quarter, while the average IPO on NewConnect was worth 1.35 million euros, versus 1.53 million euros in the fourth quarter of last year. The total value of IPOs on the main and NewConnect markets was 43 million euros. In the first quarter, only one IPO was worth more than 10 million euros-that of Optopol, a manufacturer of ophthalmic diagnostic equipment, which floated 18 million euros worth of stock. The IPO of Euroimplant, a tissue engineering company, was worth 3.1 million euros and marked the largest issue on the NewConnect market in the first three months of this year.

Both the total number and value of IPOs were smaller than in the fourth quarter of last year. Many companies postponed their debuts or gave them up altogether due to discouraging trends on the stock market. However, most IPOs turned to be successful, which shows that investors still want to buy shares in new companies on the WSE. The planned privatization of Treasury-owned companies in sectors such as energy (Enea and PGE), finance (Bank Gospodarki Żywnościowej and WSE), chemicals (Zakłady Azotowe Tarnów), and transport (LOT Polish Airlines and PKP Intercity) should give a boost to the WSE. Whether or not the government's privatization plans are eventually carried out will depend on many factors, including developments on the WSE.

Meanwhile, according to analytical office Wood&Co, media company Agora is interested in acquiring Bankier.pl for zl.130 million, while Telekomunikacja Polska, ING Bank Śląski and ABG are preparing to pay dividends to shareholders. TP plans to set aside up to zl.700 million to soak up its own stock.

On April 10, the WSE marked its 17th anniversary. The exchange's president, Ludwik Sobolewski, delivered a special address in which he spoke about measures taken to build a "high-standard" regional financial center in Warsaw. The competitive position of the Warsaw exchange will be strengthened by a new code of best practice, Sobolewski said. The WSEInfoStrefa and WSEInternational news services launched last year mean that investors are now much better informed about public companies listed on the WSE, Sobolewski said. In his address, he emphasized the importance of the Ukrainian market for the WSE's strategy.
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