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The Warsaw Voice » Business » August 13, 2008
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Upward Correction
August 13, 2008 By Michal Jeziorski   
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After months of nose-diving, the Warsaw Stock Exchange's main index, the WIG, regained 3.1 percent in July. But the bad news is that the index was still 23.8 percent lower than at the beginning of the year.

The bulls and bears wrestled for control of the market throughout the month. The bulls took the upper hand from July 17 when an upward correction began.

The Midas company was the top gainer of the month, appreciating by 112 percent.

Data on unemployment and domestic retail sales had little impact on the market. As expected, unemployment dropped to 9.6 percent, while retail sales were only slightly lower than predicted, growing by 14 percent. In fact, this was the worst monthly figure so far this year.

Meanwhile, news of industrial orders in the United States growing by 2 percent caused an explosion of joy on international markets, including Warsaw.

In other July highlights, the Warsaw Stock Exchange company acquired shares in the Ukrainian stock exchange INNEX, and the Polish Treasury minister unveiled a revised strategy for privatizing the WSE company.

The WSE company's acquisition of 25 percent of INNEX marks the latest stage in a series of steps to develop ties between the WSE and the Ukrainian market. The first step was the opening of a WSE representative office in Kiev June 25.

Meanwhile, the Warsaw Stock Exchange company is preparing to hit the trading floor in Warsaw itself Nov. 27. Investors will be offered more than 60 percent of the company's stock. The government wants to limit the risk of a hostile takeover by including 25 to 35 percent of non-voting shares in the public offering. Such shares do not give their holders voting rights at general stockholders' meetings. As compensation and an incentive for investors, these shares carry the right to a 2.5 times higher dividend than ordinary shares. The Treasury ministry wants only 50 institutions selected by the government to have the right to co-manage the WSE. Other European stock exchanges will not get a chance to acquire WSE shares.
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