Political correction

The first half of February was not as bullish as the beginning of the year. A correction, which had been predicted to happen earlier, finally occurred on the WSE - but with a little help from the politicians

Firstly, a sell off among investors was sparked by the signing of the PiS (Law and Justice) party\'s stability pact. The main force in the Polish Parliament signed the pact with Samoobrona (the Self-Defence Party) and LPR (the League of Polish Families) - both parties well-known for their hostility towards the financial markets and economic reforms. The second time politics adversely affected the WSE in February was when parliament was threatened with dissolution. After this, indices started to rise, thanks mainly to the foreign markets and the strong złoty.
Turning our attention to the construction companies, one could have noted an impressive increase in the value of Mostostal Zabrze\'s shares - two months after Zabrze\'s creditors signed a PLN 115 mln settlement for the company\'s liabilities, an agreement which has now been confirmed by a court of law. It brought to an end a three year period in which the company had been fighting for its life. Now Zabrze wants to implement a new strategy within three months, focusing on construction and assembly on the domestic market. But Polnord\'s price increase was even more impressive than Zabrze\'s - over 100 pct in one month. This was due to the signing of new contracts - one worth PLN 72 mln with Poczta Polska and another for PLN 45 mln in Russia. Polnord is now organizing a new share issue for its shareholders and the cash generated from this will be invested in development.

(mir)