Weekly comment MM Prime TFI  - May 11, 2015

Since the beginning of the year, we have noticed clearly improved sentiment on the WSE. While the beginning of the year was dominated by small and medium-sized companies, since the launch of the European version of quantitative easing, large companies were in domination. The WIG20 gained 5% in April, while mWIG40 went up by 3.5% and sWIG80 by only 2.3%.

Last week indices at Książęca did not change much. Biggest price delta of 0.2% was noted on a declining WIG20 index. Considering significant increases of the index during recent weeks, such correction brought only a little pain to WIG20 long investors. This correction may easily transform into a deeper decline, which does not have to strike out a slowly emerging bull market on the WSE.

Once again we are witnessing an interesting disproportion of forces - the Warsaw Stock Exchange is much stronger than their western competitors. Great leaders are the members of WIG20 index, which grew by 2.2%, closing the week at 2519 points. With such dynamic, an increases to 2560 points (September peak) can be within current index strength. Indices of medium and small companies were weaker - mWIG40 grew by 1.1% and sWIG80 by 1.7%.

For the first time in a long time, national indices have showed its strength comparing to indexes from the West. Both the broad market index and medium-sized companies’ index have reached long-term highs during the week. Blue chips were also performing well, exceeding the level of 2500 points, unobserved for many months. In Poland, the market was marked by good news from the economy. The current account balance was more than twice better than expected.