Summary

Finally, investors on the WSE can be satisfied. For the first time in December the WIG20 ended the week in green growing by 5.8%. Surprisingly, small and medium - sized companies did not take a leaf from the biggest ones. The mWIG40 rose by 1.7% and the sWIG80 went up only by 0.4%. The effect of Santa Claus finally showed up on the Warsaw Stock Exchange. Lately, very good economic indicators helped stock markets to increase. The level of employment and salary in the enterprise sector grew stronger than expected. Moreover, the level of retail sales and industry production did not disappoint. Retail sales increased by 3.3% y/y vs expected growth of 2.1%. Industry production rosed by 7.8% y/y (expected rise of 5.6%). Furthermore, there was a publication of the MPC meeting minutes. It turned out that the continuation of expansionary monetary policy was not supported by council’s members unanimously. There appeared some rumors that the monetary policy will be probably more tough at the end of third quarter. The improving Polish economy confirmed the advisability of the possible change. However, the tense political situation, which had led to a slump on Polish stock exchange, did not improve.

Economic data from the eurozone showed that the European economy will end the year with a prospect of strong economic growth. This was confirmed by high levels of PMI indicators and industrial production that were better than expected. Moreover, German Ifo index reached a very high mark. In regards to the US economy, on Wednesday the FOMC raised interest rates by 25 basis points. It was the first raise for 9 years. However, the Fed’s president – Janet Yellen emphasized the gradualness and the tight scope of future raises. It probably meant, that the growth of American economy will be not certain. Despite these facts, the end of the week was not successful for Wall Street. After the initial euphoria, which had been caused by FOMC statement, there were concerns about the raw materials crisis. Investors were not able to see the bottom of oil prices. As a result, the DJI decreased by 1.4%, the S&P500 went down by 0.3% and the NASDAQ fell by 0.2%. In Europe, Germany was the leader – the DAX rose by 2.6%. French CAC40 grew by 1.7% and British FTSE250 went up by 1.4%.

The current week is a Christmas week. Therefore, it is possible that there will be lower volatility in financial markets. Polish stock market will be opened until Wednesday. However, it is worthy knowing that the USA will publish some important economic data on the revenue and expenditures of Americans. There will be also a release of data on real estate market and the GDP growth reading for the third quarter. GDP readings will be given also by Switzerland and France.

Technical Analysis

Graph 1. WIG20 daily. Source: Stooq

It was really good week for the Polish stock exchange, especially for the largest companies. The WIG20 rose weekly by 5.8% and rebounded. Furthermore, there was another positive syndrome – high volumes. However, one swallow does not make a spring. It was not enough to speak about a trend reversal. At the beginning, the WIG20 has to break important resistances – 1,900 points and then 2,000 points. The RSI oscillator, which recently had indicated a buy signal, recorded a rapid movement towards the north. A new week probably will not bring essential changes. Christmas week for investors will last 3 days and will bring lower volatility.

Graph 2. CI Games daily. Source: Stooq

It is worthy paying attention to CI Games. Its share price is in a upward trend. Lately, the share price fell rapidly and the RSI oscillator did not indicate any signals. However, there were also low volumes. In addition, the coming premier of the game ‘’Sniper 3’’ will probably reach the share price at high level again. It was also confirmed by numerous buy recommendations. Therefore, there will be probably a continuation of upward trend soon.

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.