News Parkiet

Monetary policy

MPC raises interest rates

for the second time

Poland's Monetary Policy Council has raised interest rates again this summer after inflation rate rose near three-year high. All benchmark rates were raised by a quarter of a percentage point, with the key 14-day rate raised from 5.75 to 6 percent. Economists say central bank-led council will have to hike prime interest rates again as early as next month because of rising inflation, accelerating GNP growth and expectations for wage hikes. Core inflation in June rose to 4 percent from 2.7 percent in the same period last year.

Corporate finances

JC Auto confused about

investment portfolio

JC Auto car parts distributor has lost control over its short-term investment portfolio for several days after buying corporate bonds it didn't want. Warsaw-based firm has decided to buy over 7 million zloty worth of commercial paper issued by Volkswagen Polska to squeeze higher returns from funds raised in May's IPO. Instead, JC Auto ended up with bonds sold by SCA Packaging. Founder and CEO Jerzy Grabowiecki admits he himself didn't know for a while JC Auto bought higher-risk bonds from Citigroup's Bank Handlowy.

Petrochemicals

Orlen has enough oil

to last until September

Russia's Yukos promised it would continue oil deliveries to PKN Orlen, Poland's main oil refinery at least until the end of next month as it run deeper into trouble with local authorities at home. On Wednesday Russian authorities told Yukos and its subsidiaries to halt oil production at its main Siberian oilfields as court officials sought to recover billions of dollars in back taxes and fines.

Russian oil, most of it from Yukos, accounts for 97 percent of fuel production in Poland.

'We are constantly monitoring situation on global oil markets, analyzing specific scenarios and focusing on the resolution of hypothetical situations. We are paying very close attention to changes at Yukos', PKN Orlen said in an emergency statement yesterday.

Poland has fuel stocks for about two months. Orlen and other refineries could switch to other supply sources using oil tankers. However, oil supplies through the Baltic sea are restricted by the narrow passage of the Danish straits.

Construction materials

Tras denies it needs cash

to improve liquidity

Tras Tychy SA, a publicly traded building materials company has denied news reports is plans to use proceeds from the upcoming secondary offering to overcome its liquidity crunch. Tras, which manufactures windows and related accessories, said it wants to raise up to 5 million zloty to buy out minority shareholders of Intur KFS, an Inowrocław-based subsidiary.

Telecommunications

Szeptel reports stronger sales

Local phone company Szeptel SA yesterday posted a small profit on sales in the second quarter ended June after a 39 percent increase in revenues. The carrier, whose shares are listed on the Warsaw Stock Exchange, said its sales grew to 6.5 million zloty versus PLN 4.7 million reported last year. Net earnings for the first six months totaled PLN 2.7 million, mainly because Polish authorities have agreed to cancel Szeptel's telecom license fees. 'We are expecting net profits of about 4 million zloty by the end of this year', chief executive Mariusz Pilewski said yesterday.

Szeptel increased its subscriber base by about 5 percent to almost 20.000 in the second quarter. It also signed new contracts to provide multimedia content for PTC and Centertel, two of Poland's mobile phone companies.

Szeptel, which recently moved its corporate office from its home region near the town of Łomża to Warsaw, reflecting plans for national expansion, said it plans to launch broadband Internet access services sometime in the third quarter.

Mutual funds

Buy bond funds, ING, Pioneer say

Mutual funds investing in government debt are poised to produce strong gains in the near future, the head of ING TFI mutual fund group says. 'Polish bond prices fell so low it's hard to imagine they could go any lower, Mirosław Panek says, recommending government debt to his clients.

ING TFI's Sebastian Buczek says investors should start loading up on government-backed paper near the end of the fourth quarter. ING TFI expects 7 to 8 percent annual returns on government bonds.

Money managers at Pioneer TFI, Poland's oldest and largest mutual fund company are even more optimistic. Pioneer believes returns on bonds could go into double digits next year, as the political scene stabilizes and Poland tackles rising inflation.