The comprehensive increase in valuations of Polish assets recorded in November should be associated with the return of international investors to the Vistula and may mean that the negative perception of Poland is slowly coming to an end, according to Krzysztof Cesarz, fund manager at Skarbiec TFI.
November on global stock exchanges can be considered successful, although this time it was investors in Poland who had more reasons to rejoice. The Warsaw Stock Exchange was favored by increased interest in emerging markets. This is well illustrated by the MSCI Emerging Markets index, which rose 14.6% in November. Growth in equity markets was accompanied by, the weakening of the U.S. dollar and a drop in the yield on 10-year U.S. Treasury bonds from 4.05% to 3.61%. Polish government bonds of the same maturity also strengthened from 8.37% to 6.6%. Such a comprehensive increase in valuations of Polish assets should be associated with the return of international investors to the Vistula, and may mean that the negative perception of Poland is slowly coming to an end. This is despite a weakening economy, still high inflation dynamics and remaining political risks. However, we remember that investors anticipate the future and build their portfolios today based on expectations for 2023, Kaiser wrote in the Society’s monthly analysis.
The increase in demand for equity instruments has prompted share sales on the WSE through so-called ABB (accelerated book building) processes. Shareholders opted for this solution: Benefit Systems, Selvita and Biomed Lublin. PKO Bank Polski made a similar decision in October, selling its stake in PKN Orlen. All of the above-mentioned transactions were met with great interest from investors.
“Positive sentiment was also supported by companies publishing good financial results for Q3 2022. Among the companies in the WIG20 index, we can certainly highlight: PZU, JSW and CD Project. The only blue chip company that ended the month in the red was Allegro.eu. This can be linked to the PLN 2.3 billion write-down the company took on the assets of Mall Group and WE|DO, which were acquired over a year ago,” Cesarz added.
He also pointed out that the biotechnology industry was reminded of the fact that there are interesting, promising companies listed on the Polish stock exchange, whose value comes from their ability to create highly specialized products and services. Captor Therapeutics signed a partnership agreement with Ono Pharmaceutical, under which a total of up to €197 million could flow to the company in the coming years. Ryvu, meanwhile, announced the signing of an agreement with BioNTech for collaborations in the immuno-oncology area, as well as collaborations in other areas. Potential revenues from this collaboration could total nearly €900 million. Both companies announced that they are working on further partnership agreements all the time.
“From the point of view of investors, December promises to be very interesting. There will be a Fed meeting on December 14, at which a 50bp hike in the benchmark rate is expected. More important, however, may be the conference, where Jerome Powell will outline the Fed’s further actions. December will also see the market strategies of investment banks and brokerage houses, which will give us an idea of broad market expectations for 2023,” Cesarz concluded.
Source: Skarbiec TFI and ISBnews
