Summary

Despite bloody terrorist attacks, there were not many market emotions during the last days before Christmas. As a result, major global stock indices did not see any significant movements. In Europe, British FTSE250 increased by 0.7%, German DAX rose by 0.4% and French CAC40 soared by 0.1%. In the US, the DJI and the NASDAQ grew by 0.5% and the S&P500 went up by 0.3%. Investors focused on the Bank of Japan - the last of major central banks, which made a decision on the monetary policy. However, this time the BoJ did not make any changes. In addition, investors learnt a lot of data from the American economy. This turned out to be ambiguous. The services PMI stood at 53.4 pts. vs 55.2 pts. expected. The dynamic of the durable goods orders amounted to -4.6% m/m vs -4% projected. On the other hand, the revision of the annualized GDP growth for the third quarter of 2016 surprised investors – the result of 3.5% was 0.2 percentage points higher than the market consensus.

A smooth and merry atmosphere accompanied investors at Ksiazeca as well. This was reflected in a significantly lower trade volume. During the whole week, the WIG20 rose by 0.8%, the mWIG40 fell by 1.3% and the sWIG80 dropped by 0.04%. Undoubtedly, a parliamentary crisis was in the spotlight. Nevertheless, it did not affect the market sentiment. The latest recommendation of the Economic Committee of the Council of Ministers concerning the reform of the pension system was much more important for the market. According to the ECCM, 75% of OFE funds should be transferred to the third pillar of the pension system. This was good news for the market which reacted with relief to the published document. Investors learnt the minutes from the last meeting of the MPC as well. However, this again did not bring anything new. There were plenty of indications that the policy of interest rates stabilization will be continued in 2017. Moreover, it is worth paying attention to the latest macroeconomic data from the Polish economy. It should be reiterated that the readings did not disappoint. The dynamics of the manufacturing production (3.3% y/y) and the retail sales (6.6% y/y) were much higher than projected (1.8% and 4.8%). In addition, the unemployment rate stood at 8.2% in November. The market consensus assumed the result of 8.3%.

In the current week the economic calendar is considerably less tense than usual. Today investors learnt data from the Japanese economy. Investors will also learn some indicators from the US e.g. the Conference Board index, the Richmond Fed index and the Chicago PMI. In Poland, there will be a release of data on inflation.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq

The beginning of the last week brought a marked increase in the index of the largest Polish companies. Subsequently, the next trading sessions proceeded at a smooth and merry atmosphere. Thus, the WIG20 did not see any significant changes and the volume of trade decreased. Nonetheless, there was not a correction, which had been signaled by the RSI oscillator. As a result, the index ended the last week at 1,933 pts.. This could have meant that the blue – chip index may try to reach the psychological level of 2,000 pts. in the near future.

Graph 2: Elektrobudowa daily. Source: Stooq

This time we chose Elektrobudowa as a company of the week. During the last five trading sessions, the share price increased by 14.7%. The stock price has moved in a long – term downward trend since 2015. However, the latest recommendation to buy with a target price PLN 120 turned out to be an incentive for growths. Their dynamic was significant, so a three white soldiers pattern was formed (a strong buy signal). Moreover, the share price broke the line of the downward trend. The nearest resistance level stands at PLN 110. On the other hand, the RSI oscillator was overbought, so a correction can be expected in the following days. It may end the first wave of growths.

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.