ZE PAK Gains as ING Raises Utility on Share Slump: Warsaw Mover

ZE PAK SA, Poland’s fourth-largest publicly traded power company, is heading for the biggest gain in three weeks as ING Groep NV (INGA) upgraded the stock after a slump.

The shares climbed as much as 2.7 percent and traded 2.1 percent higher to 24.8 zloty at 12:38 p.m. in Warsaw, heading for the biggest advance since July 1. Poland sold its entire 50 percent stake in the utility’s initial public offering at 26.2 zloty a share last year to help finance the budget deficit.

“ZE PAK’s share price has fallen 20 percent over the past six months, along with falling electricity prices and due to the lack of a promised dividend,” Milena Olszewska, a Warsaw-based analyst at ING, wrote in a note yesterday. “With no more fundamental downside and with a new price target of 25 zloty, we upgrade our rating from sell to hold.”

The utility, controlled by Polish billionaire Zygmunt Solorz-Zak, had initially proposed a 30 percent payout from 2012 net income but its shareholders voted for no payment last month. PAK has lost 13 percent this year, underperforming a 10 percent decline in the WIG20 Index.

In the same report ING raised utilities in central and eastern Europe to neutral from underweight. CEZ AS and Enea SA remained ING’s top picks with buy ratings while Tauron Polska Energia SA was upgraded to hold and PGE SA was kept at hold.

“Although low electricity prices mean still some downside to the 2014 consensus, we believe this is largely factored into current share prices,” Olszewska added.

To contact the reporter on this story: Piotr Bujnicki in Warsaw at pbujnicki@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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