Summary

The global stock exchanges have been ruled by its own laws last week. Warsaw indices slight growth was connected with Monday’s data from the Polish economy and the Wednesday’s Deputy Prime Minister Janusz Piechociński’s conference on a possible aid for Poles with Swiss franc loans. Retail sales in December exceeded the forecast and the labor market once again proved to be strong. The preliminary estimate of GDP was better than expected. The banking sector has been supported by the information about the replication of Polish Bank Association proposals with included recommendation to take the negative LIBOR into account. Lack of drastic proposals caused increase in bank’s (with a significant share of bank loans in francs) courses and thanks to their high share, indexes gained either. US market has been weaker because of not enough positive reaction to good quarterly results of companies or positive signals from the economy such as the data from the real estate market and the Conference Board index. German DAX has not continued significant increases started after the information to launch QE, greatly reducing its volatility. European market’s sentiment will not be improved by the perspective of economic war with Russia.

The influence of various factors with not too important impact on market has allowed indexes to change high weekly volatility. Comparing to the largest stock exchanges, indexes in Warsaw were stronger. The WIG20 with over 9% PKO BP share increased by 0.9%, the WIG30 and the mWIG40 gained 0,6%, the sWIG80 strengthened by 1.8%. The European stock exchanges were neutral. The French CAC40 lost 0.8% during the week and the Frankfurt DAX increased by 0,4%. The worst S&P500 fell from 2.8% discount.

The important data that will be published current week brings expectancy to improve sentiment on US exchanges. At the beginning of the week we will know the value of the ISM index for industry and services, and a measure of orders for durable goods. Extremely important will be also the end of the week with data on import/export and situation on the labor market. On Friday, hourly wage, unemployment rate and popular payroll (which was in reality significantly higher than the previous forecasts) will be published. The S&P500’s return to fight with the resistance near 2065 points will require another good payroll publication, that American investors are surely expecting. For Polish investors, the most important will be the reference rate publication, that is invariably at the level of 2.00%. Marek Belka's hawkish comments in the context of the financial stability calm down markets, which expect interest rate at the current level, although some investors see the need for their lowering.

Technical analysis

Graph 1. WIG20 daily. Source: Stooq

Thanks to the good information for the banking sector and unexpected increase in demand at the end of Thursday's session, the WIG 20 continues short-term upward trend. Thereby, in terms of the week, the index approached nearest resistance at the level of 2350 points, reaching Friday’s maximum exactly at this level. Breaking this barrier will open way to the next resistance level at 2375 points. Stop at the current resistance will be signal for the bears. This would result in return at least to the support at 2,300 point.

Graph 2. Getin Noble Bank daily. Source: Stooq

The Getin Noble Bank was one of the biggest beneficiaries of the lack of government bailout for Poles with Swiss franc loans. The company closed week with a 10.6% profit. It means breaking the psychological barrier of 2.00 PLN, but have not changed the long-term downward trend since May last year. Breaking the 2.03 barrier - reflecting double peak in January of 2013, is currently crucial for the company. On the other hand, decline below 2 PLN would mean the need to defend the recent support at 1.72 PLN.

Authors: MM Prime TFI S.A. Investment Management Team

This material is intended to be for informational purposes only and does not constitute any investment, legal or tax advice or any other type of advice nor constitute an offer according to the Civil Code or a public offer within the meaning of the Act on Public Offering. MM Prime TFI SA has done due diligence to ensure that the information contained in this presentation is accurate and based on reliable sources. MM Prime TFI SA is not responsible for the accuracy and completeness of the information, nor for any damage that may arise from the use of it. Nothing in this document should be construed as an investment advice. The use of this material as the basis or evidence to make an investment decision takes place at the sole risk of the person who takes such a decision. This material is available free of charge.