A breather among the falling leaves

The improvement in the mood on the stock markets has not left out the development and construction sectors this time. After the sudden decreases in the middle of September, which had all the hallmarks of blind panic, the following weeks saw the emergence of some stability on the exchanges, which was preceded by a rebound and a partial recovery. The positive news from across the pond also helped to improve the mood in Europe, even though the situation in Greece and other eurozone countries struggling with debts is still feeding the insecurity. Fears about the status of public finances are raising questions about the condition of banks which had eagerly lent money to governments. In Poland the August economic data, particularly for production and retail, confirmed the good condition of local companies and consumers, but did not help to stop the initial decreases or fuel the increases resulting from the better news from abroad later. The increases followed a strong statement by the governments of the biggest EU countries - Germany and France - confirming that the banks would receive an injection of capital, which sent investors into a state of euphoria. However, as usually happens in the case of increases generated by political declarations, the good mood only lasted for a few days. The beginning of November, when politicians will discuss methods for tackling the next wave of the crisis at the G20 summit, should be a relatively calm period on the stock exchanges. Meanwhile, in Poland the parliamentary elections and the victory of Civic Platform were given a quiet reception by the markets. The balance of the last month is not so bad: the WIG and WIG20 were up by 3.4 pct and 2.3 pct respectively, making a pleasant change after the September and August declines. Sector sub-indexes performed even better, with WIG-Construction, which had fallen to the lowest levels in its history, bouncing back to its level at the beginning of September, while WIG-Developers shot up by as much as 7 pct. This was a result of the growth in Globe Trade Centre's share price, which had been falling for the last few months but has now rebounded. Also J.W. Construction, LC Corp and Polnord could consider the beginning of October to be a success. The latter company was the hero of the hottest piece of news at the beginning of autumn, about a reported merger with Gant. The merger would result in the biggest residential construction company in Poland, and in spite of the fact that the companies have not confirmed the information, it has stirred the imaginations of investors and analysts.
When it comes to construction companies, Budimex was the only one to make use of the improvement of the mood on the broad market, as its shares appreciated by 13 pct. The company continues to secure new contracts and is finalising the takeover of PNI (a company involved in the modernisation of railway track) from PKP. In addition it is also extending the land bank for its subsidiary Budimex Nieruchomości. The stock of Mostostal Warszawa, which had been repeatedly indicated by analysts as the most undervalued in the last few months, finally rebounded. Perhaps the slightly better atmosphere surrounding the financial markets contributed to the fact that announcements by companies of their plans to enter the trading floor now sound much more concrete. GC Investment (currently listed on NewConnect) is one of the companies that would like to raise money from investors. In 2010 the company, which had a net profit of app. PLN 10 mln and revenue of PLN 90 mln, raised its profile with the construction of a golf course in Bytom, among other projects. Trust, a development company from Poznań whose prospectus has already been submitted to the Financial Supervision Authority, is also waiting for an improvement in the economic situation. So far the company has entered Warsaw's Catalyst corporate bond market. Representatives of Murapol have also been discussing plans to go public in Q4 2011. A similar pattern - a long-term decrease, followed by a rebound - also affected PBG's shares, but here it would be more apt to mention that the decreases that resulted in its share price falling by over 70 pct last year have stopped. (Mir)

Prague still doing pretty badly
The trading floor in Prague continued to register losses. The PX index fell by 2.6 pct over the month. Investors have been spooked by the spectre of recession in Europe, which could impact a Czech economy dependent on exports. Meanwhile, the stock exchange in Budapest gained much more than Warsaw's WIG and WIG20, growing by over 7 pct in one month. Here, for once, investors were not put off by concerns about an impending economic slowdown. The driving force behind the increase was the upward movement of OTP bank's shares, which constitute nearly 30 pct of the BUX index. We should also remember that the Budapest index had more losses to recover from.