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The Warsaw Voice » Business » May 20, 2009
Month in Review
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What Comes Down Must Go Up
May 20, 2009 By A.R.    
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After a prolonged nose-dive, the Warsaw Stock Exchange (WSE) was bullish for the second straight month in April.

Investors generally ignored whatever bad things happened on the market and focused on the good news instead, in an approach that may indicate that the bulls have returned to the Warsaw trading floor, analysts said.

The WIG20 blue-chip index rose from 1,534 points at the beginning of April to 1,798 points at the end of the month, gaining 17.2 percent month on month. The index reached a monthly high of 1,814 points April 14. The WIG broad-market index performed even better, gaining more than 19 percent.

The banking sector fared better than other sectors in April, with the WIG-Banki index rising by 36 percent. The WIG-Spożywczy index of food-sector companies gained 33 percent and was among the fastest growing indices. The food sector is attractive to investors because it has largely remained unaffected by the global financial crisis, while other sectors have reported a drop in consumption. The WIG-Deweloperzy index of listed developers gained over 32 percent in April after a sharp decline in previous months.

Bank Pekao SA, one of Poland's largest banks, did the best among the 20 blue chips, gaining almost 43 percent. It rose sharply in early April and then saw further growth later in the month. BRE Bank SA was the second best performing blue chip, gaining almost 41 percent in a steady growth trend throughout the month. Bioton, a rapidly expanding biotechnological company that makes modern drugs, ranked third in this league table. It gained 40.9 percent thanks to a sharp rise at the beginning of the month after a disappointing performance in March.

Among the blue chips, investors were particularly interested in banks. As banks have been heavily affected by the crisis in recent months, their stock has gone down in price. This, coupled with their high liquidity, made banks an especially attractive investment.

Although the month was good on the whole, some companies saw their stock prices sink. The worst performer was the largest Polish telecommunications operator, Telekomunikacja Polska, which plummeted by 7.5 percent. This was evidently due to the company's poor first-quarter results, with both profit and revenue far lower than analysts had expected.

Meanwhile, consulting firm PricewaterhouseCoopers published its IPO Watch Europe report about the European stock market. In the first quarter of this year, the WSE led the field in terms of the number and value of IPOs, according to the report. The WSE was even ahead of Europe's largest stock markets including the London Stock Exchange, NYSE Euronext, and Nasdaq OMX. The WSE accounted for six of Europe's 18 IPOs in the first quarter. In terms of the total value of IPOs, Warsaw also ranked first. Companies newly listed on European stock markets raised a total of 9 million euros. Of this, 6 million euros was raised on the WSE.
The WSE's largest IPO, involving engineering company Hydrapres, which hit the NewConnect alternative market, was the largest European IPO in the first quarter.
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