News Parkiet

Equity markets

Capital gains tax suspension unlikely,

sources say

Capital gains tax is here to stay, sources close to the situation told PARKIET yesterday. Polish Finance Ministry has already decided it will reject appeals to halt the new tax. IDM equity brokers' association and the Association of Retail Investors are questioning constitutionality of capital gains taxes, pinning their last hopes on possible appeal before the Supreme Court by Poland's national ombudsman's office.

Poland started levying 19 percent tax on stock market gains on January 1st.

Power industry

Poland postpones G-8 sale again

Poland broke off talks on the long-delayed privatization sale of G-8 power grid operator, the country's Treasury Ministry said in a press release yesterday. Sole bidder for G-8, an SPV controlled by Kulczyk Holding group reportedly offered to pay PLN 1.2 billion for a 25 percent stake in the company. G-8 includes eight regional electricity distributors with 16 percent share of the national market. Its annual sales total approximately 3 billion zloty.

Chemicals

PKN Orlen may buy Dwory rubber plant

Firma Chemiczna Dwory, a large artificial rubber and latex plant from south-central Poland is looking for a buyer. One potential investor, PKN Orlen petrochemicals group, Dwory's largest supplier is completing due diligence at the company and looking for synergies with its existing chemicals businesses. However, sources close to the situation say Orlen will likely wait at least until May before it decides on a possible takeover. In the meantime, Płock-based refinery has made a bid for Czech oil company Unipetrol, which has a stake in Dwory's smaller regional competitor, Kaucuk Kralupy rubber-maker.

Located near former Auschwitz death camp, Firma Chemiczna Dwory is controlled by widely held NFI Foksal privatization fund, which has no single controlling shareholder. Despite uncertain prospects and murky ownership structure, Dwory's CEO Zdzisław Ingielewicz remains optimistic and expects his company to find a buyer within the next two years.

Packaging

Kęty sees 'at least' 30 pct. 1Q earnings growth

Grupa Kęty aluminum packaging maker said on Wednesday its first quarter earnings will be at least 30 percent higher than last year. Kęty, a blue-chip stock that is part of WIG20 large-cap index posted net profits of PLN 15.1 million in the first quarter of last year. Widely held company expects sales to go up 10 to 15 percent from last year's 167 million zloty.

Bonds market

Demand for gov't bonds still strong

Poland sold 2.3 billion zloty ($600 million) worth of five-year bonds during yesterday's auction despite fears the Treasury won't be able to raise cheap money because of recent political instability.

Demand was unexpectedly strong, with institutional bids totaling PLN 7.6 billion. Average annual yield on five-year bonds fell to 6.628 percent.

Banking

Sentiment index highest since early 2001

Pengab banking sentiment index rose 5.2 points to just under 30 points in March, the highest since the turn of 2000 and 2001, Pentor research institute reported yesterday. The measure reflects sentiments among banking managers and has been climbing since early 2003, driven by stronger corporate lending.

Pengab survey participants predict resurgence of inflation later this year. Bank managers from 203 branches across the country now say US dollar will cost 4.02 zloty at the year's end versus yesterday's 3.85 zloty per unit.

Information Technology

Ster-Projekt data center contract

with TP delayed

Telekomunikacja Polska phone company has once again postponed selection of prime contractor for the expansion of its 100 million zloty ($26 million) data center in Lodz, central Poland. Two main bidders for the project include Polish IT company Ster-Projekt and local subsidiary of Germany's Hochtief construction group. Ster-Projekt CEO Piotr Smólski expects his company to win the contract, which accounts for a quarter of company's annual sales. Smólski says TP will likely pick the winner by the end of March.

TP spokeswoman refused to comment on speculations about possible outcome of the bidding process.