A new hope

May wasn't a good month for the WSE's indexes. The WIG 20 fell during the first two weeks, however the 1600 point level was defended and the index stabilised above this level. During the last days of May the WIG-20 index was slowly rising again, which may hint to change for the better on the market. Especially, if the 1,700 point level is passed at the beginning of June. Very favourable corporate results weren't enough to prevent the market losses which occurred during the first half of May. These results confirmed the fast pace of economic growth (expectations being for growth in GDP of 6.5 pct for the first quarter). Investors' negativity was brought on by political factors, especially the troubles concerning appointing a new government. But at long last the good days for the construction sector have come. Company results haven't shown it yet, but according to GUS figures construction and assembly production rose by 26 pct. y/y in April. Analysts and asset managers believe that the ever faster pace of construction and assembly production growth will be reflected in companies' results for the third and the fourth quarters of 2004, when big contracts may be signed. Taking a look at specific construction companies, Mostostal Export has made a quarterly net profit for the first time since 2001. It seems that business conducted in Russia has had a positive effect on its results. In spite of Budimex's slightly worse results, especially its revenues, analysts forecast that there will be a considerable improvement.

Contributed by:

Mirosław Kuk