Stock digest Wednesday 13.03.24

Wednesday's session on the Warsaw Stock Exchange started with gains, but in the second half of the day, banks performed weaker, resulting in a 0.7% decrease in the WIG20 index. The mWIG40 and sWIG80 indices performed better, both rising by 0.6%. Among the largest companies, Dino showed the weakest performance (-3.3%), while KGHM was the strongest performer (+2.8%). Trading volume on the broader market amounted to 1.49 billion PLN, with 1.28 billion PLN attributed to the WIG20.

Trading on the underlying markets also had a mixed outcome. In Europe, the DAX index remained unchanged, while the CAC40 gained 0.6%. In the USA, the S&P500 decreased by 0.2%, and the Nasdaq by 0.5%. The Polish złoty strengthened slightly against both the euro and the dollar. Bond yields on the underlying and domestic ten-year markets increased again. In the commodity market, Brent crude oil rose by 2.6%.

Allegro's published results for the fourth quarter of 2023 were almost exactly in line with our expectations, but the growth was slightly slower than anticipated. They were likely supported by small one-off items (30-40 million PLN). The guidance indicates some acceleration in the first quarter of 2024, but slightly below our expectations. Overall, we assess this slightly negatively.

PKN Orlen will increase its EBITDA by 7.2 billion PLN and the group's net profit by 5.8 billion PLN in 2023 due to the cessation of using cash flow hedge accounting for the portfolio of forward transactions (swaps) hedging the exposure related to the LNG gas purchase agreement from Venture Global. The release of hedges is due to the lack of LNG gas deliveries from Venture Global. Considering that Orlen settled transactions in 2023 (which already had an impact on cash flow), we perceive the information neutrally. However, slightly negatively from the perspective of ESG criteria, we interpret the press information that the company is currently not interested in selling the publisher Polska Press.