Santa brings cheer to the bourses

The problems of the eurozone at the end of the year were replaced with the ?fiscal cliff', the euphemistic name for the troubles the largest economy in the world has been having with balancing the federal budget. The introduction of an emergency plan drawn up by the US Republicans before Christmas ended in fiasco. Now that the problem has been apparently resolved, it can be seen that it has not troubled stock exchange investors' moods (helped by an influx of cash ?manufactured' by the Federal Reserve), nor has it impacted the real US economy - its GDP growth for Q3 has been revised up to 3.1 pct from 2.8 pct.

However, the same was not true in Poland - the data for Q3 turned out to be weaker than expected with the economy only growing by 1.4 pct y-o-y. The recession in the eurozone has hurt and adds to the hangover of poorer results in the construction sector after the end of Euro 2012. The question now is how the economy will cope in the coming quarters. But so far the Santa Claus effect has been clearly perceptible on the WSE. In just over a month, the WIG and WIG-20 each gained 8 pct and the blue-chip index reached its highest level since August 2011. The sector indexes also increased as the WIG-Developers left behind the main indexes of the Warsaw trading floor.

At the beginning of a new year it is also worth taking a look at the behaviour of the indexes over the last 12 months. The year was not a bad one for the broad market indexes - excluding the last three sessions at the end of December, the WIG gained more than 23 pct and the WIG 20 just over 15 pct. Last year turned out to be disastrous for WIG-Construction (which fell by more than 33 pct). Such a scenario would have been considered science fiction only a few years ago, during the euphoria surrounding the build-up to Euro 2012. The year was marked by huge problems for the largest WSE-listed players (PBG and Polimex). Picking out a company with a positive rate of return among those listed is almost impossible, with the exceptions of Mostostal Płock and Instal Kraków. Developers looked better in comparison, as their index increased by 7 pct, which was, however, significantly less than even the WIG-20. Investing in Celtic, Triton and especially Alterco, would have resulted in big losses, although Gant and J.W. Construction cannot boast a rise in the value of their shares over the year either. Commercial developers did better: after some temporary problems, GTC's stock rose over the 12 months, while that of Echo Investment and Rank Progress provided an opportunity to earn even more. However, Residential developers are now preparing for hard times - it was probably with this in mind that Gant Development abandoned its plans to merge with Geo, Dom i Mieszkanie and instead teamed up with Hungarian developer Futureal, which is to buy up to 2 mln shares (app. 5 pct of the company) and will directly support the company's projects.

As far as construction companies are concerned, Polimex announced before Christmas that it had reached an agreement and agreed to a restructuring deal with its creditors. This will involve the conversion of bonds into shares, the entry of an investor (ARP - the Industrial Development Agency) and the reduction of its costs by PLN 300 mln by 2015. The ARP is to acquire the shares before the end of January. The future of PBG seems to be much more complicated - the unclear status of its dispute with Rafako has led to the Financial Supervision Authority (KNF) warning creditors against buying PBG shares. Meanwhile, when it comes to companies' activities on the primary market it is worth mentioning another action plan of the Treasury for Polski Holding Nieruchomości - firstly, a minority block of shares is to be traded on the WSE; and secondly, the company is to be sold to an investor from the sector. Also, Platinum Properties Group is planning to float on the WSE. The company, which is already listed on the NewConnect market, is known for having the largest flotation on this market to date, which was worth PLN 250 mln. Together with its relocation to the WSE, the company wants to acquire an additional amount of PLN 45 mln from investors. (Mir)

Prague growth and Hungarian strife
The Hungarian BUX index followed the other indexes of the emerging markets by going up slightly just before Christmas. Its monthly balance is, however, very weak - a slight loss is very poor news for investors on this bourse, compared to the growths in Warsaw and Prague. The Hungarian economy is still struggling with the recession, a reduction in industrial production (most significantly in the last three years) and its difficult fiscal situation. However, the Prague PX index increased by almost 8 pct and was able to join in with the merry pre-Christmas mood on the global stock exchanges.