News Parkiet

Public finances

Privatization target in doubt

Polish currency fell to a record low of 4.89 zloty to the euro yesterday on news that Polish government is once again postponing the sale of state-owned PKO BP bank. Poland's largest retail bank won't be sold until the first quarter of 2005 at the earliest, Treasury Minister Zbigniew Kaniewski said.

Polish Treasury said earlier it would sell assets worth 8.8 billion zloty this year, but yesterday's announcement makes it increasingly unlikely the government will be able to reach that goal. Investors now worry without privatization inflows, Poland's public debt will rise to over 55 percent of the GDP, triggering automatic spending cuts.

Equity markets

Parliament approvers new rules

against insider trading

Poland's parliament has approved proposed changes to the country's securities laws, giving Polish Securities and Exchanges Commission more powers to fight insider trading and stock manipulation schemes.

The SEC will now have the authority to conduct its own investigations of insider trading cases.

Banking

BPH Bank denies layoff rumors

Bank Austria's Polish subsidiary BPH Bank said it has no immediate plans to reduce its workforce following media reports of massive layoffs. Austrian financial daily Wirtschaftblatt cited 'financial circles' saying Bank Austria group may cut up to 10 percent of its jobs in Poland. BPH Bank has more than 10.200 employees.

'We are constantly looking at costs, not just jobs, but also infrastructure', BPH's chief executive officer Józef Wancer said yesterday commenting on the report. Wancer added BPH Bank has no specific plans to cut jobs.

Analysts say the cuts would yield annual savings of some 70 million zloty.

Food industry

Polish candy-makers show mixed results

Two out of three publicly traded Polish candy-makers posted higher 4Q sales and operating margins. Wawel chocolate-maker managed 18 percent increase in sales. Quarterly earnings were up 52 percent to PLN 3.63 million zloty. Despite record earnings, Wawel has no plans to pay dividends this year. The firm has just begun 50-million zloty production plant near Kraków.

Quarterly earnings at Jutrzenka S.A. plunged 65 percent despite traditionally strong sales in the Christmas period. It now expects top-line growth 'in the single digits', but may consider dividend payment, its CEO said.

Raciborz-based Mieszko S.A., controlled by the Central European Confectionery Holding had didn't do nearly as well. The company lost 12 million zloty, or 1.76 zloty per share on charges related to new sales policy and inventory write-downs. Mieszko's new CEO Marek Moczulski, who took over three months ago says his firm will start showing operating profits once again by mid-2004.

Construction

Elektromontaż-Export sees future

in export sales

Maker of electrical engineering systems Elektromontaż-Export is counting on continuing export sales to keep it from going under. Sales at Warsaw-based company were down by half last year as Elektromontaż struggled to secure working capital it needed for day-to-day operations. The group was forced to lay off almost half of its 1200 staff because of cash shortages. Elektromontaż has negative shareholders' equity of more than 40 million zloty after losing PLN 76 million in the last three years.

Despite staggering losses and precarious financial situation, shares of Elektromontaż more than doubled since January 1st. The firm is negotiating debt reduction with creditors and has already applied for government subsidies to stay afloat.

Mutual funds

Mutual funds bullish on stocksInvestors kept pouring money into equity funds in January, mutual fund watcher Analizy OnLine said. Assets under management by Polish stock funds rose 11 percent in just four weeks to a record 5.4 billion zloty ($1.4 billion). Analizy Online estimates that mutual funds bought some 320 million zloty worth of equities in January. Mutual fund holdings now account for approximately 3 percent of all stocks traded on the WSE. Pioneer Pekao is the largest mutual fund company by assets, with stock and bond portfolio of 10.5 billion zloty.