Polish Stocks to Gain 16% in 2011 as Econom Growth Accelerates, ING Says
Poland’s WIG Index of stocks may climb 16 percent by the end of next year as the country’s accelerating economy helps earnings improve, ING Groep NV’s mutual fund in Warsaw said.
The 344-stock index is set to increase to 55,000 as economic growth accelerates to 4.5 percent from this year’s “close to 4 percent” pace, said Maciej Bombol, chief investment officer at ING TFI SA, which manages the equivalent of $3.3 billion. The index has jumped 18 percent this year, compared with a 13 percent gain in the MSCI Emerging Markets Index.
“This is rather a conservative forecast,” Bombol said at a news conference today. “There are still many uncertainties and markets will be more volatile than this year because of the uncertainty over the debt burden of some European countries.”
Rising stock prices and stronger economic growth next year may prompt more companies to hold initial public offerings in Warsaw, whose equity market is the biggest in central Europe in terms of total market value, turnover and number of traded companies, Bombol said.
“The IPO market will continue its strong growth, because with the economy expanding companies will invest more and will seek capital through share sales or debt issues,” said Bombol.
The WIG fell 0.3 percent to 47,358.19 at 2 p.m. in Warsaw.
Poland has had the most IPOs in central Europe each year since at least 2004, according to data compiled by Bloomberg. Sixty-six deals have raised a record $4.94 billion in 2010, the largest coming from state-run insurer PZU SA and utility Tauron Polska Energia SA. The Warsaw Stock Exchange’s own IPO in October drew record demand from institutional investors, which bid for more than 25 times the number of shares on offer.
Zloty ‘Undervalued’
The zloty, which has gained 1.5 percent against the euro in 2010, is among the most undervalued emerging-market currencies, Bombol said. The currency should gain next year, benefiting from continued inflows of investment and European Union funds, as well as a possible increase in official interest rates, he said.
“We believe in the Polish zloty and its rising trend seems clear,” said Bombol, adding that price pressures may prompt the central bank to raise interest rates for the first time since June 2008 as early as in the first quarter of 2011.
To contact the reporter on this story: Pawel Kozlowski in Warsaw pkozlowski@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
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