Everybody up!

The upward trend, which came to a brief halt in March, continued through the next month, mainly due to evidence of the Polish economy’s outstanding performance in the first quarter of 2007, as well as a good feeling on Western markets and the high prices of raw materials. The WSE is still benefiting from the constant flow of capital to investment funds. In such conditions no one should be surprised by new all-time highs recorded on the WIG 20 and the WIG-BUD construction index.
Polimex Mostostal, the only construction company included on the WIG 20, announced that it is possible that its sales may increase even by a third this year as the Polish building boom gathers pace. In an interview, Bloomberg Polimex’s CEO revealed that the company aims to achieve EUR 1 bln in revenue “relatively quickly”. The company may look for new acquisitions in order to offer
a full range of projects.
Polnord’s shares were in April one of the top gainers in our table – the firm announced that it expects to make a PLN 2.5 bln operating profit from new projects planned for 2007–2012. This could happen thanks to an deal with Polnord’s main owner – Prokom – which is contributing a 54-ha plot. In exchange for the land, the Prokom Group will receive over 5 mln of Polnord’s shares.
As for construction companies poised to enter the WSE, it’s worth mentioning that
J.W. Construction’s PLN 200 mln IPO is scheduled for May, and Atlas Estates, a British real estate developer operating on the Polish market, is considering a debut on the WSE in 2007. In May, another international developer is expected to debut – the Orco Property Group, which has announced that its shares will soon be listed on the Warsaw and Budapest bourses.
Turning back to the construction sector on the WSE in general, it is not a common situation when sport events affect moods on the market. But on April 18th, UEFA’s decision to make Poland and Ukraine joint-hosts of the European football championship in 2012, resulted in an observable lift on the WSE, especially for construction firms. Analysts claim that hosting such a big event will be a big boost for the Polish economy. Building new stadiums and infrastructure could cost as much as PLN 20 bln. Needless to say, constructors will be the main beneficiaries of this investment.  
(mir)