Wave of optimism

The issues troubling the global economy have not disappeared. However, either the insecurity stemming from the payment of more tranches of aid to Greece and the implementation of reforms in the country has receded into the background, or investors have simply got used to ?the Greek problem'. The publication of favourable macroeconomic results from around the world as well as the US Central Bank announcement that American interest rates are to stay at zero until the end of 2014 certainly helped to alleviate the situation. The only factor militating against optimistic scenarios is the debt issue, as is the case in Europe. Positive signals on the old continent are also boosting the stock exchanges (these include improvements in the leading indicators in the service and industry sectors).
The Polish stock exchange has finally taken on board the healthy data for the real economy. At the end of January it turned out that that Polish GDP had grown by 4.3 pct over 2011, which demonstrated that the economy is still doing fine. Industrial production continues to grow and consumption is still strong. The data is overshadowed by an increase in the unemployment rate, but investors have so far only been heeding the positive news. The WIG index grew by nearly 9 pct, while WIG 20, the key index of larger companies, increased by 7 pct. The growth of the former was mainly due to small and medium-sized companies, whose indexes broke the record high levels of autumn 2011. These include development and construction companies, so the growth of the two indexes for the sectors comes as no surprise. The latter sector stood out in particular - after months of stagnation, it shot up and increased by 14 pct. After some excellent results at the end of 2011 and early this year, the construction sector was left with a growth of over 9 pct, which was still higher than the indexes of the broader market. The share prices of construction companies continued to grow, though slightly slower. Only three companies registered declines during this time - compared to none in the previous month. These were PBG, Ulma and Unibep. The fastest growing companies, however, were Instal Kraków and Mirbud, with as many as 14 companies registering double-digit growths. Pol-Aqua recorded an almost 30 pct increase, as its stock price returned to its levels of November last year. Analysts have pointed out that the beneficiaries of the increases in the quarters to come might be those companies that are actively involved in power-related investment projects, pointing to giants such as PBG and Polimex Mostostal.
Meanwhile, development companies enjoyed excellent results. There was a clear growth in the share price of Dom Development, which sold more apartments than any other listed firm. At the beginning of February the company issued bonds worth PLN 120 mln. Analysts of brokerage house Trigon predict that 2012 might also be a good year for the company thanks to the completion of projects involving high pre-sales of apartments, with the sales level possibly reaching 2,100 (i.e. over 60 pct more y-o-y), while its profit could exceed PLN 106 mln, compared to the PLN 80 mln expected to be generated in 2011. The highest increases were registered by the Swedish developer Reinhold, whose share price grew by 80 pct in just a few sessions. Investors are also putting a lot of trust in the share price of Warimpex, Rank Progress (which is to construct new shopping centres in Piła and Chojnice) and LC Corp (which has launched four new projects in Gdańsk and Wrocław). Only two companies, Alterco and Interferie, suffered declines. The limiting of the availability of mortgages at the beginning of this year did not significantly influence demand for residential developers, as confirmed by positive sales results in January. Marvipol, Gant, Polnord and Triton sold more apartments in January than in the same month last year. Such good stock market performances by developers have given some encouragement for the new boys - Vantage Development is to debut on the WSE at the end of March or early April. The Wrocław-based developer operating on the residential and office markets is to be spun off from Grupa Impel, which is already listed on the Warsaw bourse. ? (Mir)

Growth in Hungary and the Czech Republic
On the Hungarian stock exchange the increases were of a similar scale to those in Warsaw. The BUX index grew by over 7 pct. After the recent turbulence set off by the threat to international aid and the activities of Viktor Orban's government, the mood was lifted by the country's economic data. Hungarian GDP grew by 1.4 pct in Q4 on the previous year, whereas growth of 0.9 pct had been predicted. However, the Prague stock exchange remained exceptionally flat over the last month. The index grew by only 0.2 pct. Orco, which is also listed on the bourse, experienced a monthly increase of 15 pct, while the share price of ECM was stable at the level of around CZK 25.5.