Polish Business Survey
Stock demand beats supply
YesterdayŐs action in the stock markets took investors by surprise. Whereas it is true that most people expected markets to continue down, demand for shares actually was greater than supply. This could suggest that the market could be coming out of the slump. New technology shares continued to drop but their fall might now be bottoming out. Elektrim made up for 25 percent of all shares traded yesterday. Market leaders were the National Investment Funds (NFI). Nonetheless caution must still be observed as no clear trends are obvious.
Tychy CHP for sale
In August the Treasury intends to attempt to find a buyer for the Tychy central heating plant. This privatisation was originally planned for mid-2000, however it is now certain that no shares will be sold until the middle of next year. Major players such as the Swedish Vattenfall and the Finnish Fortum have already shown an interest.
Fortum is no stranger to Tychy. Not long ago its daughter company Fortum Engineering signed a contract to build a 95MW electrical and 152MW energy block which will come on line in the second quarter of 2002. The cost of this investment was EUR67m. An earlier block also built by Fortum was opened this year producing 38MW electricity and 72MW heat. Before this block was opened Tychy only produced heat energy. A contract for the sale of electricity has been signed with the Upper Silesian energy concern (GSZE) valid to 2017 and a similar contract will be made for the second block as well.
A delay in privatisation may not be a bad thing for the plant which is gaining more experience in electricity production which should increase the value of Tychy. The plant is also being prepared to produce energy from forestry bi-products. This will cost around PLN7m and will fulfil five percent of the plantŐs requirements. This will be the first such investment in Europe according to Sławomir Madejski, MD of the plant
Steel production up
In the first six months of this year 34 percent more steel was produced than in the same period of 1999. However the financial state of steel mills is as bad as ever and receipts do not even cover on-going operations.
Still hope for leasing
The Finance Ministry is still completing work on a bill regulating the leasing industry. There is still a chance that it will remain worthwhile to lease a car. Questions remaining to be solved include the value of goods once the leasing period is over and how to banks should treat repossessed goods.
Brewers protest about excise
The Treasury intends to increase excise duties on beer by 11.1 percent next year. The industry has already responded to this and has threatened to refer the matter to the Constitutional Tribunal. The Treasury in turn has not yet ruled out a third excise hike for this year if the budget finds itself in need of cash.
In July the number of deposits in PLN increased, as did the number of credits. Three quarters of bankers also think that there will shortly be a return to the credit boom.
New MD at Ferrum
At yesterdayŐs shareholders meeting of the Ferrum steelworks Tomasz Pogwizd became managing director replacing Jerzy Bradecki. In the first quarter of this year Ferrum lost PLN4.5m on a PLN28.3m turnover.
Rybnik deadline forward
The deadline for the consortium made up of NRG, Marubeni and GE Capital to buy a share in the Rybnik power station will probably be brought forward from 24 July to 20 July. If the consortium decides to take the plunge then a decision is expected on Friday.
Only the Japanese Marubeni seems to be pushing for the deal, the two other US based companies are holding back. The consortium had initially shown a degree of worry about coal prices in Poland. A solution to purchase mines fell through as did an attempt to get long term contracts. The latter was not possible owing to the restructuring of the coal industry as a whole.
If the sale does not go through then it will be a very bad sign for the whole of the energy industry, which is currently waiting for privatisation.
Warta chooses investor
The French AXA and US AIG are the only companies still negotiating with Kulczyk Holding on increasing the capitalisation rate of the Warta insurance company. Negotiations are not easy as the owners of the company are looking for a good price at the same time as minority shareholders feel the potential investors will not give them a good deal.© ℗
Podpis: Alan Heath