Wide discount in WIG20. Speculation on EC Będzin’s shares in WSE continues

On Wednesday morning, recession data from Poland’s Central Statistical Office was released and the NBP read indicating lower core inflation. Apart from the Polish GDP data, investors also relied on the sentiment of the underlying markets, as the sentiment was also not the best the day before, when there was no session in Warsaw.

This is the effect of fears about the state of the Chinese economy, which received disappointing data, on the basis of which the domestic central bank decided to unexpectedly cut interest rates. So Wednesday was a day to catch up with the WSE and deepen more than a month’s worth of declines in the WIG20, which fell the most. Our domestic index was weak, as major indices in Europe lost their downward momentum after a bullish opening for trade on Wall Street, as good data from US manufacturing and construction showed.

In the WIG20, it decreased by 2.04 percent. WIG decreased by 1.79 percent. mWIG40 was 1.33 percent lower, and sWIG80 was down 1.09 percent. The turnover was clearly higher than on Monday and amounted to more than PLN 1.08 billion, of which PLN 864 million was related to WIG20.

In terms of sectors, all industry indices with the biggest discount were gaming (-3.28%) in the red, but the most burdensome were banking (-3.11%) and mining (-3.07%), with a turnover of 271 PLN. 130 million. Food, chemicals, energy and fuels were relatively stronger, with declines of just 0.5 percent.

In the WIG20, strong declines were broad by more than 2 percent. 13 stocks fell. CD Projekt (-4.59%) and mBank (-4.53%) were the biggest discounters. by about 4 percent. PKO (-3.81%) and the lowest since June 2012 Cyfrowy Polsat (-3.83%) also fell. Since the beginning of the year, the price of the latter company has recovered nearly 19 percent, and for the year it has fallen almost 27 percent.

Also noteworthy was JSW’s share price (-3.97%), which is just over a one-year low. On Wednesday, previous assumptions that only JSW would pay tax on extraordinary profits were confirmed. Thus, the state treasury, which is the largest shareholder of the company, will participate in JSW’s standard dividend, but without the participation of other shareholders due to the no-dividend vote.

Only Kroc’s share price (1.35%) ended the session in the black in the portfolio of the largest companies. On a smaller scale, shares of Grupa Kęty (-0.12%), PGE (-0.18%), Dino (-0.23%), Orlen (-0.45%) and LPP (-0.45%) fell by 0.46%).

In mWIG40, the largest discount affected millennials (-5.22%). The deterioration in sentiment in the banking sector may be related to Fitch’s additional announcements about a possible downgrade in the credit rating of the US sector, but one must also take into account the potential interest rate cuts and thus lower earnings, the upcoming elections and the settlement of extended credit holidays. Only 5 company prices from the mWIG40 basket managed to increase, but Huuuge (4.11%) and Tauron (2.15%) rose by more than 1%.

In the broad market, Patentus announced a new agreement with JSW, so the stock rose 8.25 percent.

The share price of EC Będzin was the most distinguished in terms of volume growth and turnover (35.65%). The trade value exceeded PLN 4.68 million on Wednesday, and prices have been suspended several times. After five weeks of decline, Będzin’s share price rose after the details of the repayment of the company’s obligations and the cancellation of accumulated interest of more than PLN 1.6 million were announced on Monday after the end of the session.

Michael Kopecky