Warsaw shares close near to 5-months lows; Bioton, KGHM tumble UPDATE

Warsaw shares close near to 5-months lows; Bioton, KGHM tumble UPDATE

	Published : Thu, 16 Aug 2007 16:26 By : Agencies Print this Story

(Updating with full report)

WARSAW (Thomson Financial) - Warsaw shares tumbled to their lowest level in 5 months as global equities fell sharply, on fears over the fallout from the crises on the US credit market, with biotech company Bioton and copper miner KGHM leading the decline.

The Warsaw bourse's blue-chip WIG20 index lost 5.24 pct to 3,334.15, after touching its lowest level since March 16 earlier in the session. The broad-based WIG dropped 7.33 pct to 54,788.86 in heavy trade of more than 2.5 bln zlotys.

The market was closed yesterday, which added pressure to today's pull-back, dealers said.

'Small and mid-sized companies have been hit the hardest,' Jaroslaw Antonik, fund manager at KBC in Warsaw, said. 'Their valuations were already high, and so those stocks were bound to be the first in the line of fire.'

Polish stocks have enjoyed a strong rally in recent months, touching all-time highs last month as the booming economy fuelled inflows into local mutual funds.

But the recent sell-off, which has taken the broader market some 20 pct below its July 8 record, could prompt investors to pull their money from equities, leading to further declines, fund managers said.

Biopharmaceutical company Bioton lost 15 pct and was the hardest hit among Polish blue-chips today. The stock dropped to its lowest level in two years on Tuesday after the company cut its sales forecasts and disappointed the market with weaker-than-expected revenues in the second quarter.

KGHM fell more than 5 pct to a 2-months low on the back of falling commodity prices. Local refiners were also down with Lotos losing almost 8 pct after UniCredit cut its target price and kept its 'sell' recommendation for the stock, citing disappointing results.

Sanitary ware producer Cersanit was the only blue-chip to eke out a 0.35 pct gain after the company said its sales almost doubled in the second-quarter.

'The losses have come across the board and we need to wait for the dust to settle before we could pick a sector to be in,' KBC's Antonik said.

piotr.skolimowski@thomson.com +48 22 447 24 36

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