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The Warsaw Voice » Business » July 31, 2013
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DM PKO BP recommends investing in WIG20 companies
July 31, 2013   
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WSE investors should invest in companies from the large-cap index WIG20 as their results may have already bottomed out and should improve, while the WIG20 index itself is expected to grow to 2,320-2,420 points over the next three months, DM PKO BP brokerage experts said.

"Previously we bet strongly on small and medium-size companies . . . In the new quarterly strategy we have made a slight turn in the direction of big companies, which, after weak six months, should be a better investment over already strongly priced mid-caps," DM PKO BP head of analysis Artur Iwanski said during a press conference.

"The worst is behind us in terms of companys' results," Iwanski added. "We expect a slow economic rebound . . . It seems that our stock exchange could be a good investment, although the OFE [pension system] reform remains a risk factor which exerts pressure of uncertainty."

Over the course of three months, the analysts expect the WIG20 to reach the 2,320-3,420 range.

"If we add to this 60 points of dividends, it means an expected rate of return at a positive 5%," Iwanski noted.

Among preferred stocks, DM PKO BP recommends KGHM copper, PGNiG natgas, PZU insurance, Pekao bank, CEZ power utility, CCC and LPP retailers, TVN media, among others.

On the flip side, analysts recommend selling shares of TPSA telco, PKN Orlen and Lotos fuels, banks BRE, Handlowy as Millennium, as well as Dom Development residential real estate.

Power and mining firms will be under pressure in the coming quarters, the brokerage said.

In the banking segment, to which the brokerage has a neutral stance, the analysts expect a net result decline of 8% in 2013. Growth in the following year will be 5.8% due to a slow improvement in Poland's economic situation and the possible implementation of a new banking tax.
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