A brief moment of happiness

At the end of February, the Warsaw Stock Exchange was the only exchange not to follow the trend set by foreign trading floors. its indexes did not climb despite the lead from developed economies. analysts have put this down to local issues: the reform of open pension funds, anxieties over higher inflation and the prospect of less money from the European Union

As a result the WIG 20 fluctuated at around 2,600-2,700 points. The anxiety resulting from the tense situation in Libya and its effects on the global economy could be sensed in the news coming out of various economies. The fall in the world's exchanges turned out to be short-lived and indexes started to climb again in the first days of March. This time a positive influence from abroad could clearly be felt in Warsaw. At the beginning of March the WSE was one of the fastest growing indexes in the world. The fuel for the growth turned out to be better forecasts for the Polish economy (which is to grow by over 4 pct this year) and no increase in interest rates. The good mood disappeared quickly when the news emerged from Japan of the massive earthquake and tsunami. Despite the fact that the WSE behaved better than most indices, the deterioration in the mood abroad meant that the WIG 20 could not climb beyond its peak of 2,800. In such unsettled circumstances, the announcements of companies' Q4 and yearly results took on a secondary importance. Banks and raw materials companies enjoyed particularly good results. The growth of the WIG 20 was due to the results from these two sectors, since it contains a significant share of such companies (over 3.5 pct). The WIG grew by only 1 pct in the same period, which when compared to sector sub-indices is a decent result. The developers' index dropped slightly (0.4 pct) while the construction companies' index slipped by nearly 3 pct. Among construction companies the securities of Erbud, P.R.I. Pol-Aqua, Mostostal Warszawa, ABM Solid and Unibep fell substantially. Erbud's profits slumped by as much as 65 pct, while Mostostal Warszawa only earned half as much as in 2009. However, in the case of this company, some analysts have pointed out that its lower price could present a good opportunity to buy its shares. It is hard to say the same thing about P.R.I. Pol-Aqua's securities. Not only did it have weak results (a loss of nearly PLN 290 mln last year), but the company has been shunned by investors for failing to provide information about the condition it is really in.
Meanwhile the biggest players are in good shape. Despite the fact that Polimex's profit for the four quarters of 2010 was lower than the profit it generated in 2009 (PLN 112 mln vs. PLN 156 mln), the company has announced an improvement in its revenues this year and that it would pay dividends. In 2010 these amounted to nearly PLN 4.2 bln. Polimex is now planning to establish a stronger presence in the energy sector. Construction companies are currently looking for alternatives to road construction after the announcement of less government expenditure on the construction of motorways and expressways. As a consequence, Budimex, for example, now wants to be an active player in the railway infrastructure sector - the company is interested in taking over Przedsiębiorstwo Napraw Infrastruktury from the Polish State Railways. It was in competition for this with Polimex, which ultimately withdrew from the race for PNI, the value of which is estimated at app. PLN 500 mln. Regardless of Budimex's attempts to diversify its business activities, investors were certainly happy to hear that its total profit for 2010 (PLN 226 mln) would be paid out in dividends. Developers have also published their results. In 2010 Dom Development generated a net profit of PLN 40.41 mln, i.e. more-or-less half as much as in 2009. J.W. Construction's profit also turned out to be lower (PLN 92 mln compared to PLN 100 mln). Globe Trade Centre, on the other hand, registered a profit of EUR 29 mln compared to a loss of EUR 139 mln in 2009, while Echo Investment's profit turned out to be PLN 43 mln higher. The Developers listed on the WSE have one thing in common - they believe that this year will be a turning point and that the sales of apartments may finally return to pre-crisis levels. (Mir)

Rescue thanks to lower turnover
Stock exchanges in Budapest and Prague registered downward movements (app. 1.5 pct each) last month. They grew at the end of February, but the panic which set in after the earthquake in Japan contributed to their subsequent adjustment. Investors' low levels of activity, particularly on the Budapest trading floor, have become an increasingly significant problem. Due to the reform of the pension system, pension funds in Hungary have virtually all gone into liquidation. In such a situation Hungarian companies are considering moving their quotations to the stock exchanges of Warsaw and Vienna. E-Star, a company from the energy sector listed in Budapest, made its debut on the WSE on March 22nd.