Living on the edge

 

“Still very nervous, sometimes on the brink of panic,”

- is the best way to describe the mood in August on the WSE

 

Some analysts say that being an investor is a permanent fight between greed and fear – if this is so, the last couple of weeks on bourses all over the world were about fear. The reason - which one could have read about in last month’s stock exchange report – is still the same: anxiety about US mortgage market problems and the possibility this could damage not only the US, but the world economy too. As news concerning the worries broke, indexes plunged all over the world. The WSE and z∏oty were affected as well. The biggest sell-off took place on August 16th. The WIG 20 blue-chip index dropped by over 4 pct, small and medium companies’ indexes fell by over 5 pct. However, relief came the next day – when the FED unexpectedly cut the discount rate from 6.25 to 5.75 pct. In the wake of this move, the markets rebounded, including the WSE, whose WIG broad market index regained 1.8 pct. And on August 22nd, bullishness returned to the WSE – the WIG rose by over 4 pct; but, as analysts claim, mortgage problems in the US are not yet over, with volatility still expected on the world market over the coming weeks.

With investors on the WSE pre-occupied by events on US markets, quarterly results remained in the shadows. Despite the construction sector being one of the main losers in the last few weeks, company results were actually rather good, confirming the good health and prospects of this part of the economy. Budimex is still the leader when it comes to revenues, but the biggest profits were posted by Polimex and PBG. According to stats published by the ‘Parkiet’ newspaper, 56 pct of constructors increased their profits. Turning to developers, it is worth noticing the results of the largest homebuilder JW Construction, whose Q2 profit fell to PLN 14.4 mln from

PLN 36.7 mln a year ago, and sales dropped 32 pct to

PLN 121.2 mln. According to the firm, its results were affected by rising material costs and wages, as Polish workers migrate to Western Europe.

   

(mir)