News Parkiet

Money management

VIP accounts moving abroad

Polish asset management firms are starting to lose their top clients to international competition, sources in the brokerage industry told PARKIET recently.

'Several of our best clients have transferred their money to international institutions offering hedge funds and other investments', one stockbroker says. Few local companies acknowledge they are having problems retaining customers.

CA IB Investment Management, one of the few money management firms that has agreed to talk openly about this issue says sales staff representing international asset management companies sometimes try to arrange meetings with their Polish counterparts, ostensibly to discuss joint sale of asset management services. 'However, when we do meet, they try to obtain as much information as possible about our clients and about the market situation here, CA IB's Rafał Mania says.

Polish Securities and Exchanges Commission says it is monitoring the situation. It could file criminal charges against money management firms that offer investment products without registering with the SEC.

People raising money for hedge funds have to go through regular IPO procedure. Alternatively, they can set up their own mutual fund company in Poland to sell investment products, SEC's Witold Pochmara, the head of Investment Fund Department says.

Polish money management firms had over 40 billion zloty in assets under management at the end of June. Individual investors accounted for a fraction of that amount.

Telecommunications

TP's mobile unit lifts 2Q profit

Poland's main telephone operator Telekomunikacja Polska (TP) said on Friday its net profit doubled in the second quarter on the strength of Centertel mobile arm.

TP's net earnings rose to PLN 550 million ($150 million), up from PLN 243 million a year ago. Group sales were up 0.6% to PLN 4.6 billion, of which Centertel accounted for some 945 million zloty.

Real estate

Developers lining up to buy Wrocław property

Poland's two publicly traded property development companies, Warsaw's Globe Trade Centre and Echo Investment from Kielce, have both made their bids for the 28.000 square meter property in downtown Wrocław in southern Poland. The lot was put on sale by city authorities, with the asking price of 32 million zloty. Both Echo and GTC are reportedly planning to build a shopping mall there.

Engineering

Elkop declared bankrupt

Shares of Elkop SA, a tiny engineering contractor from Katowice plunged 14% to 4.5 zloty on Friday after the company announced its bankruptcy as it sought shelter from creditors. Elkop, which has market value of just 1.4 million zloty, said it would ask the creditors once again for partial debt forgiveness. It had 6.5 million zloty in short-term debt at the end of June. That compares with net assets of some 1.8 million zloty.

Elkop reported its last annual profits four years ago.

Typically, Polish firms seeking protection from creditors try to negotiate 40 percent off their outstanding debt. The remaining part is then repaid in quarterly installments over a period of several years.

Media

Polish Press Agency to merge

with DNT printer

Polish government has decided to merge PAP, the country's official press agency with Drukarnia Naukowo-Techniczna, a small specialty printer in order to improve its position versus competitors. The merger of two state-owned firms will be completed through a stock swap. For merger purposes PAP is worth 28.2 million zloty, Polish government said. The agency received 18.5 million zloty in government subsidies last year. Shares of the much smaller DNT, a technical printer from Warsaw are worth just 4.1 million zloty.

Government officials from the Treasury Ministry say combining the two could make it easier to sell PAP sometime in the future.

EnElektrim power and telecoms conglomerate has asked Polish authorities for the extension of the final deadline to complete expansion of Pątnów II power plant until March 2007. Under the terms of privatization agreement signed with the government Elektrim was supposed to finish the project this year.

Elektrim needs about 350 million euros to complete Pątnów 2. Construction at Pątnów 2, part of Zespół Elektrowni PAK power plant, Poland's second largest, has been going on an off for the last four years.