Fair to moderate
Unfortunately not only the weather in Poland in July was at most moderate, so were moods on the Warsaw bourse
The beginning of July was quite good – the WIG reached its historical highs, but some signs were interpreted as the beginning of a bigger correction (see below). Good news was coming from the world major markets – the Dow Jones reached a psychological level of 14.000 pts, Ben Bernanke (president of the FED) announced that the U.S economy will grow faster next year and left the inflation forecast unchanged. However, he did say that the housing market will remain sluggish for some time and could stymie economy growth. In fact, a worsening situation on the U.S. house market was the main trigger for the global sell-off that took place on bourses around the world at the end of July (one has to remember that the situation on the U.S. house market is the lodestar for the whole U.S. economy). The main question is whether this represents a major correction, about which analysts have been warning for several months. Still, a rebound is possible when companies publish their second quarter results - providing they are better than expected due to the rapidly growing Polish economy. In such circumstances, even the political crisis in Poland (early elections are now likely) was pushed into the shadows and influenced neither the WSE, nor the Polish currency.
One of the biggest events in the few last weeks on the WSE was the debut of another developer - LC Corp. It was the largest IPO to date of
a private Polish company with a value exceeding PLN 1 bln. But the debut and subsequent performance of LC Corp on the WSE were rather disappointing, especially bearing in mind the reduction in subscription amounted to 98 pct. Only for a few minutes did shares exceed their initial value of PLN 6.5, but a while later at the end of the day they dropped by almost 7 pct. Analysts claimed that the debut of LC Corp has given the whole market a warning - and especially for homebuilders, as flat prices stopped growing.
(mir)
