Still bullish

... would sum up investors\\\' mood on the WSE last month

The WIG index gained 4,000 pts., mainly due to good news from US Markets, which spurred capital markets worldwide. Of course, from time to time some corrections occurred, but the trend seems to remain strong. Moreover, the Polish economy is in an extremely good condition - GDP grew by 7.4 pct in the first quarter of 2007, the best figure for 10 years. Although economists predict that the second quarter results will be slightly worse, on the whole 2007 GDP will grow by around 6 pct and the construction sector contribution will be significantly bigger compared to previous years.

On the subject of the construction sector on the WSE, it would be hard to ignore the big debuts which took place over the last few weeks. Firstly, at the end of May, Austrian developer Immoeast enjoyed successful share issues on the Warsaw and Vienna stock exchanges. The company\\\\\\\'s offer was worth more than EUR 2.8 bln, which makes it the biggest share issue ever held by a real estate company in Europe. Secondly, the largest developer in Poland, J.W. Construction, entered the WSE with an IPO to the value of PLN 245 mln. On the first day, investors were euphoric as the company\\\\\\\'s shares jumped by 30 pct. And finally, another European developer entered the WSE in June - Orco. And this debut was successful too - at the opening its stocks rose by over 10 pct.

Since there are more and more developers on the market, the WSE has decided to create a new sub-index called WIG-Developers. The explanation for this move given by the president of the WSE is that the sector is becoming increasingly influential and the intention is for the WSE to be seen as the market where the sector is best represented in the region.

(mir)