Summary

Global stock exchanges were dominated by bulls last week. In the US and Europe the market sentiment was quite good. During the whole week French CAC40 and German DAX increased by 3.3%. British FTSE250 grew by 2.2%. In the US, the NASDAQ rose by 2.8%, the S&P500 went up by 2.7% and the DJI took off by 2.2%. European stock markets were supported by promising economic data. The unemployment rate in the Eurozone stood at 10.3% vs 10.4% expected. Moreover, the releases of the final PMIs turned out slightly better than expected. The industrial PMI stood at 52.2 pts. and the services PMI stood at 53.3 pts.. Furthermore, the retail sales grew by 2% y/y. In the US, the publication of the Chicago PMI disappointed investors. On the other hand, the ISM indices and data on American labor market did not fail. It is worth reiterating that the growth of jobs in the non – agricultural sector was much higher than expected. The unemployment rate stood at 4.9%. There were also significant increases in commodity prices. Investors were glad because some oil producers decided not to increase the production. As a result, the price of oil stabilized.

The WSE ended the week in the positive territory as well. During the whole week the WIG20 grew by 1.6%, the sWIG80 rose by 0.8% and the mWIG40 went up by 1.0%. The positive global market tone and quite good economic data from Poland helped the WSE to end the week in the green. The GDP growth in the fourth quarter of 2015 stood at 3.9%. In addition, the industrial PMI increased from 50.9 pts. in January to 52.8 pts. in February. Nevertheless, it was worrying that the foreign investors sold dispose of Polish treasury bonds worth PLN 13 billion. There were also many releases of companies’ financial reports. Comarch surprised positively. Its net profit was about half higher than expected. Unlike to Comarch, the financial results of Intel Cars totally failed. It was not a good week for Emperia as well. The tax audit showed that the company had significant tax arrears.

Current week will bring many economic data’s releases. It is worth paying attention to the readings of GDP growth in the Eurozone and Japan. Investors will also learn Chinese balance of trade. In Poland, the MPC make a decision on interest rates. Moreover, another Polish companies will present their financial results. Nonetheless, the ECB will be in the spotlight. The members of the council will make a decision on interest rates and quantitative easing.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq.

At the end of the week the WIG20 stood at 1,873 pts.. The index broke the resistance line which delineated the long – term downward trend. The RSI oscillator was still neutral. However, moving averages and other oscillators indicated a buy signal. Moreover, there were higher volumes. They could have confirmed that the index of the largest companies would probably realize the third upward wave. The closest resistance is the psychological level of 1,900 pts.. A definitive breakthrough of this level will likely start a new long – term trend.

Graph 2: KGHM daily. Source: Stooq.

Recently, one of the best companies was KGHM. During the whole week its share price rose by 11.7%. An increase of copper’s price helped the share price to grow. The course was in the short – term upward trend which was confirmed by higher volumes. The RSI oscillator was above 70 pts. mark and it may indicate a sell signal soon. The next few days may bring a movements towards the resistance at PLN 81. Subsequently, a slight correction can be expected. It should be also noted that on the 17th of March there will be a release of annual financial results. It may have a significant impact on the future KGHM’s share price.

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

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