Tuesday, July 10, 2007

Stocks Slide In Poland

From Bloomberg:

Poland Leads Slide in Central Europe: World's Biggest Mover

July 10 (Bloomberg) -- Polish shares led declines among central European indexes on concerns the country may face early elections following the dismissal of Deputy Prime Minister Andrzej Lepper yesterday.

KGHM Polska Miedz SA, the company that mines more copper in Europe than any competitor, and Bank Pekao SA led the drop. Pegas Nonwovens SA also slipped.

Poland's WIG20 Index retreated 2.1 percent to 3800.01 at 3:53 p.m. in Warsaw, posting the biggest fluctuation among equity markets included in global benchmarks.

The NTX Index of 30 companies in the region declined 1.6 percent to 2065.85 as 24 stocks fell, four rose and two were unchanged.

``The government crisis introduced some short-term uncertainty and additional risk concerning work over next year's budget and the public finance reform,'' Piotr Bielski, a Warsaw- based economist at Bank Zachodni WBK SA wrote in a note.

Premier Jaroslaw Kaczynski asked his twin brother, President Lech Kaczynski, to fire Lepper amid a corruption investigation. Leaders of Lepper's Self-Defense party threatened to quit the ruling coalition, depriving the government of its parliamentary majority and making early elections likely.

KGHM fell 3.4 percent to 118.8 zloty, ending its six-day streak of increases in which the stock gained 14 percent. Copper prices fell after China imported more than expected in June, fueling concern that the world's biggest consumer of the metal may take time to absorb the supply.

`Good Excuse'

``This political commotion provided a good excuse to some investors to reduce their position in stocks and take profit after recent gains,'' said Piotr Zagala, who helps manage the equivalent of $725 million at SEB TFI SA in Warsaw.

Bank Pekao, Poland's second-largest lender, dropped 3.5 percent to 259.7 zloty and PKO Bank Polski SA, the region's largest bank by market value, lost 1.6 percent to 54.8 zloty.

Elsewhere in the region, the Czech PX Index slid 1.4 percent, Hungary's BUX Index lost 1.3 percent and Austria's ATX Index dropped 0.9 percent.

Pegas fell 1.8 percent to 793 koruna. Pamplona Capital Partners is selling a stake in the Czech maker of fabrics for diapers worth about 87 million euros ($118.5 million). ING Groep NV is offering 3.09 million shares in Pegas on behalf of Pamplona Capital, according to an e-mail sent to clients by the Dutch brokerage.

Immoeast AG gained 1.2 percent to 10.37 euros after the Austrian property developer said fiscal 2007 earnings more than tripled as rental income and property values increased.

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