Summary

The last week of March brought increases in the most important global stock market indices. During the whole past week, the DJI rose by 2.4%, the S&P500 went up by 2% and the NASDAQ soared by 1%. In Europe, the German DAX took off by 1.8%, the French CAC40 grew by 1.4% and the British FTSE250 increased by 0.7%. The market sentiment improved last week. However, the risk of a trade war has been still a burden for the financial markets, especially since China has imposed retaliatory duties on the American goods. This fact was confirmed by the first after Easter break trading session on Wall Street which was clearly dominated by the red color. It is also worth paying attention to the macroeconomic data that did not give investors too many reasons to be glad. After weak initial readings of the PMIs for the Euroland, the confidence indices turned out be lower than projections. In addition, the publications of the Chicago PMI and the Conference Board index in the US were quite disappointing. On the other hand, there was a positive surprise in the case of the American GDP growth rate revision – the reading at 2.9% was 0.2 percentage point higher than expected. After all, this figure did not have a significant impact on the stock markets.

The improvement of the global market sentiment did not have its positive reflection on the WSE. During the whole past week, the WIG20 declined by 2.1%, the mWIG40 fell by 1.2% and the sWIG80 dropped by 1.1%. The earnings season of companies listed on the WSE was going on. Solid financial results for 2017 were presented by CCC, Atende and Selvita. Nonetheless, this time GetBack was in the spotlight. During the General Meeting of Shareholders the share issue decision was made. Meantime, one of the investors who had declared to take up new shares withdrew from the decision. Undoubtedly, GetBack deserved the negative hero of the week name – its stock price went down by 26% last week. Investors learnt the minutes from the last meeting of the MPC as well. The document confirmed investors should expect a continuation of the interest rates stabilization in subsequent quarters. However, it is worth remembering that during the last conference Adam Glapinski reiterated the interest rates may remain unchanged even by 2020.

This week, investors will focus on the numerous macroeconomic data readings. There will be publications of the PMIs for the Euroland and the US. Moreover, it is worth paying attention to the dynamic of the American orders for durable goods, the HICP and the unemployment rate for the Eurozone. The publication of the American payrolls will be the event of the week. This week, financial results for 2017 will be presented by Forte, Rafako, Archicom, Bioton, or Braster, among others.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

This was another week of bears’ dominance. The index of the largest Polish companies ended Thursday’s trading session at 2,210 pts. mark i.e. near very important resistance level at 2,200 pts. This barrier seems to be the last rock of the growth pattern. A possible breakthrough will probably be a formal confirmation of a bear market. The RSI oscillator remained neutral, although it was near oversold area. Due to the pre-Easter period, the volume of trade remained quite low.

Graph 2: Selvita daily. Source: Stooq

This time we chose Selvita as a company of the week. During the whole past week, its stock price rose by 3.4%. The publication of the financial results for 2017 was a support for the share price. The company showed solid profits. Moreover, further development prospects of this entity have seemed to be attractive. After declines, the market returned to the movements towards north. The closest resistance levels stand at PLN 65 and PLN 75 (a historical peak). The technical oscillators remained neutral, however, they were systematically growing. Due to the solid fundaments and promising technical situation, the market sentiment over this biotechnological company was bullish. Thus it is possible the stock price will be continuing growths in the near future.

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

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