WBJ #32-33 2013

Spending spree

Poland’s growth figures for the second quarter show the economy hit bottom in Q1 and is now on the rebound 7

The Defense Ministry is pulling out the big guns when it comes to equipment purchases. Foreign firms are lining up to get a piece of the action 12

WWW.WBJ.PL

0.8%

Bouncing back

VOLUME 19, NUMBER 32-33 • AUG 19 – SEP 1, 2013 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

LOKALE IMMOBILIA

Since 1994 . Poland’s only business weekly in English

Time to evolve

COURTESY OF MILITARY PROPERTY AGENCY

REAL ESTATE

• Developers look for funds • Warsaw Spire financing • Modlin fortress sold 14-16

MATEUSZ GO¸ÑB/WBJ

Market swings

The flamboyant Janusz Palikot tells WBJ how his party, Palikot’s Movement, will have to change if it wants to widen its electorate 8-9

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-3 Business . . . . . . . . . . . . . . . . . . . .4-6 Finance & Economics . . . . . . . . . . .7 Cover story . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11

STANISLAW KOWALCZUK/EAST NEWS

There are some big changes coming to the Warsaw Stock Exchange, including the introduction of a new blue-chip index 5

Defense in Focus . . . . . . . . . . . . . .12 Lokale Immobilia . . . . . . . . . .14-16 The List . . . . . . . . . . . . . . . . . . .18-19 Markets . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Gowin vs Tusk

Eyes on Egypt

The question isn’t who will win Civic Platform’s leadership election, but whether Jaros∏aw Gowin will leave the party when he loses

The world watches as Egypt teeters on the brink of civil war, while several Polish tourists remain stranded in the popular vacation destination 3

2

NEWS

www.wbj.pl

Econ Ministry to reduce restrictions on companies Poland’s Economy Ministry is about to finish work on draft legislation easing conditions for Polish businesses, the socalled fourth deregulation law, the ministry told the Polish Press Agency. Economy Minister Janusz Piechociƒski said that these changes should bring companies in Poland some z∏.640 million in savings annually. ●

€39.2 million

is the amount of EU agricultural funding that the European Commission is demanding Poland pay back, due to irregularities in supervising how the funds were spent.

1.1% was Poland’s CPI inflation rate in July, measured yearon-year. The figure was much higher than analysts had expected.

Quote of the Week “If Mr Tusk had a good successor for [Finance Minister Jacek] Rostowski, his dismissal would be certain.”

A source cited by private radio station RMF FM, who said that Mr Rostowski was on his way out, after the government had to significantly revise its budget for this year.

Figures in focus Production leaders Rise/fall in industrial production in selected EU member states (% change y/y, June 2013) 10

9.6 5.3

5

A weaker euro for a weaker Europe Franz Nauschnigg, head of European affairs and international financial organizations at the Austrian National Bank, says that if the Chinese yuan were to strengthen against the euro, it would greatly help weak Southern European economies.

Calendar

August / September 22

PROFESSIONALS IN WARSAW

Event:

A meet-up of expats living in, or new to Warsaw, with WBJ and Invidia HR as partners of the event.

Restaurant Kameralna, Warsaw meetup.com/Professionals-in-Warsaw

Location: Web:

24-25 AIR SHOW 2013 Event:

Location: Web:

17

INVESTING IN POLAND 2014 CONFERENCE

Event:

The conference will mark the launch of the 2014 edition of Warsaw Business Journal Group’s Investing in Poland annual publication. It will feature panel discussions examining investment conditions and incentives, with one panel focusing on outsourcing as the major investment trend in Poland.

TBA wbj.pl

Location:

The International Air Show will be held in Radom for the 13th time. It will celebrate 95 years of Polish aviation.

Radom, Poland Airshow.sp.mil.pl

SEPTEMBER 3-5 ECONOMIC FORUM Event:

Web:

most important meeting of political and economic leaders in Central and Eastern Europe.

This year’s theme is: “Towards a New Deal.”

Krynica, Poland forum-ekonomiczne.pl

The 23rd annual Economic Forum is the

Location: Web:

2.4

2.1

0.5

0 -0.3

-5

-1.9

-2.0

-3.0

-10 -15

*Highest in EU **Lowest in EU + Data for May, 2013 -17.2

s+ Cy pru

Re pu

blic *

*

-20 in ga ry+

On WBJ.pl

3.3

Cz ech

Remi Adekoya

is the total area by which two of Poland’s special economic zones will be expanded to attract more investors.

Sp a

porters every step of the way.

Therefore, the speculation now is not over who will win the battle for leadership of Civic Platform, but rather over what will happen to Mr Gowin after the vote. Several high-ranking PO politicians, including Sports Minister Anna Mucha, have already suggested that Mr Gowin is “out of the party” thanks to his harsh criticism.

There has been widespread media speculation that after the election, Mr Gowin will quit PO to form his own party. Mr Gowin has already thrown his hat in with a group of socially conservative politicians hailing from a variety of different parties. The members of the group, which is not a party though many suspect it could soon become one, have dubbed themselves “the Republicans.”

Hu n

Gowin accused Mr Tusk of abandoning PO’s original center-right, pro-business ideals in order to become a “social democrat.” He said the party needed to “go back to its roots.”

As the PM’s popularity tanked at the beginning of the summer, Mr Gowin initially looked to be a formidable challenger. A July SMG/KRC survey revealed 36 percent of Poles believed he would be a better leader for the ruling party than Donald Tusk, while 28 percent said the PM was the best possible leader for PO. However, Mr Gowin’s campaign fizzled out after a brief buzz and he often cut a lonesome figure at meetings with party members where he tried to win their support. Mr Tusk meanwhile toured the country equipped with the trappings of power and surrounded by sup-

ece Fra nce

Internal elections to decide who will be the next leader of Poland’s ruling Civic Platform (PO) party could wrap up on August 23 if one of the two contending candidates wins over 50 percent support in the first round of voting. Prime Minister Donald Tusk, who has led PO since 2003, is favored to defeat his rival, former Justice Minister Jaros∏aw Gowin.

PO’s 40,000-plus members are all entitled to take part in the election and were able to cast their votes online until August 6. Over a quarter (27.69 percent) of PO’s members eventually voted online. Correspondence voting will be concluded on August 19.

Mr Gowin is the first politician to openly challenge Mr Tusk for leadership of the party, which has ruled Poland since 2007. During the campaign, Mr

168.3 hectares

Gre

Prime Minister Donald Tusk (left) and former Justice Minister Jaros∏aw Gowin (right)

lan d Ge Un rma n ite dK y ing do m

Since the start of the current term of office for local authorities in Poland in 2010, 83 referendums have been held to recall governing body members, according to data from the State Electoral Committee, 61 in 2012 and so far 22 in 2013.

Out of those only 12 have met the 60% voter turnout requirement for the results to become valid.

was Poland’s annualized GDP growth rate in the second quarter, according to a preliminary estimate by the country’s statistics office GUS. The figure is slightly higher than economists had forecast.

nd

Over 80 recall elections since 2010

0.8%

Ire

The European Commission has demanded that Poland pay back €39.2 million out of agricultural policy funds received in 20072008. As some of this amount has already been withheld from Poland, a sum of €30.4 million remains to be repaid. The money will be subtracted the next time Poland applies for funds from the EC.

The battle for leadership of PO

nia *

EC fines Poland nearly €40 mln

Numbers in the News

Po la

In a speech on August 15, Polish Army Day, President Bronis∏aw Komorowski said that Poland should reduce its involvement in foreign military missions and concentrate more on modernizing its army. To ensure its security, Poland is to build its own part of NATO’s missile shield and is participating in NATO’s joint anti-aircraft defense system.

IN THE SPOTLIGHT

Ro ma

Poland to limit involvement in foreign military missions

AUGUST 19 – SEPTEMBER 1, 2013

COURTESY OF WIKIMEDIA COMMONS AND KPRM

2

Source: Eurostat

Company index Aer Lingus..................................................................4 Agora..........................................................................5 Air Berlin....................................................................4 Air Seychelles ............................................................4 Apple ........................................................................23 Aquis Exchange ........................................................5 AugustaWestland ....................................................12 Bank BG˚ ..................................................................5 Barclays ....................................................................5 Boeing ........................................................................4 Bouygues Immobilier Polska..................................14 BRE Bank ................................................................16 BZ WBK ..........................................................7, 16, 20 CBOS ..........................................................................3 Citi Handlowy ..........................................................20 Deutsche Telekom ....................................................5 Dom Inwestycyjny Investors......................................6 EADS ........................................................................12 Eko-Park ..................................................................15 Emtech ....................................................................16 Etihad Airways ..........................................................4 Euler Hermes ......................................................5, 16 Gant Development ..................................................14 Ghelamco ................................................................16 GTS Central Europe ..................................................5 Homo Homini ............................................................3 HSBC..........................................................................7 HTC ..........................................................................23 Huta Stalowa Wola ..................................................12 Jastrz´bska Spó∏ka W´glowa ..................................6 Jat Airways ................................................................4 JEMS Architekci ......................................................15 Jet Airways ................................................................4 JSW ..........................................................................20 Kernel ......................................................................20 KGHM ........................................................................6 Konkret ....................................................................14

KSO ............................................................................6 LC Corp ....................................................................14 Lerg-Chem ................................................................6 Level 3 Communications ..........................................5 LG Electronics..........................................................23 Lion’s Bank ..............................................................14 LOT ............................................................................4 Netia ..........................................................................5 New World Resources ..............................................6 OMD............................................................................4 Open Architekci........................................................15 Panattoni..................................................................14 PBG ..........................................................................16 Pekao ................................................................16, 20 PGNiG ........................................................................5 PKO BP ....................................................................16 Polimex-Mostostal ..................................................16 Polnord ....................................................................14 Polski Holding Obronny ..........................................12 PZL Âwidnik ............................................................12 Rabobank ..................................................................5 Ronson Development ..............................................15 Samsung ..................................................................23 Sikorsky Aircraft Corporation ................................12 SMG/KRC ..................................................................2 SWECO ....................................................................15 TNS Polska ............................................................3, 9 Virgin Australia ..........................................................4 VIRTUIX ....................................................................23 Warsaw Stock Exchange ........................5, 14, 15, 20

AUGUST 19 – SEPTEMBER 1, 2013

NEWS

www.wbj.pl

3

International

Egypt plunges deeper into chaos The North African country is on the brink of civil war, after its army brutally attacked supporters of the ousted president, Mohamed Morsi

SHUTTERSTOCK

Egypt has been in political turmoil since 2011, when longtime ruler Hosni Mubarak was removed from office by the army after a wave of public protests. In June 2012 the post was taken over by Mohamed Morsi, the first-ever democratically elected president of Egypt. But Mr Morsi, a prominent figure in the powerful Muslim Brotherhood movement, quickly lost support and was removed a year later, once again with the help of the Egyptian army.

Army leaders promised that the transition would be swift and that they would retain control of the country only until a new president was elected. But hopes for a peaceful resolution were dashed after the military brutally dispersed the Muslim Brotherhood’s protest camps in Cairo.

As of press time, the resulting clashes between Mr Morsi’s supporters and military and police forces had led to over 600 civilian deaths.

That number is, unfortunately, expected to rise. Interim authorities have enforced emergency laws, which have essentially handed over power to the military and authorized security forces to use live ammunition if vital security and military posts come under

‘Resorts are safe’

The violence in Egypt that began in mid-August has already claimed over 600 civilian lives attack.

Meanwhile, the Muslim Brotherhood appealed to its supporters to demonstrate against the military’s activities, and are calling for Mr Morsi to be reinstated as president. On August 16, a Muslim Brotherhood demonstration took place in Cairo under the slogan “the people want to topple the coup.” As WBJ went to press, the situation in Cairo was volatile, with large numbers of dead and injured being reported by media outlets.

International reactions World leaders reacted to the situation unfolding in Egypt with caution. US President Barack Obama condemned the government’s actions in ordering security forces to break up the protesters’ camps, and canceled joint military exercises, saying that cooperation could not continue while civilians were being killed.

Mr Obama has thus far not rescinded US financial aid to Egypt, which amounts to $1.3

billion a year. He did however say that he would ask his staff to “reassess” the aid. US Senator John McCain criticized the White House’s hesitation, telling the BBC that “the ousting of President Morsi was a ‘coup’ and President Obama should have cut off aid to Egypt as a result.”

UN Security Council met in emergency session and called for the Egyptian government and the Muslim Brotherhood to exercise “maximum restraint” and put an

end to the violence.

The rest of the world is similarly indignant at what is currently happening in the African country. Turkey described the events as a “massacre,” and has recalled its ambassador to Cairo, “to discuss the latest developments.”

On Friday, the German government warned that further clashes “could plunge Egypt into a chaos of violence” and advised its citizens not to travel there.

The Polish Foreign Ministry was less cautious at first, saying that traveling to Egypt was safe, at least to tourist resorts. It later changed its mind however, advising Poles not to travel there at all, adding that tourists who are already there should be safe as long as they stay in the resort areas.

The ministry also issued a statement expressing its concern about the “escalation of the conflict and violence in Egypt, which finds its tragic manifestation in the dead and wounded.”

“We are saddened and worried about the lack of willingness to reach an agreement inside Egypt,” the ministry said. “We urge all parties to the conflict to get back to the negotiating table.”

Meanwhile a group of no more than 20 Polish tourists were still stranded in Egypt as WBJ went to press. They had not been able to get to the airport in time for their flight, after the interim government declared a state of emergency, which made traveling through the country difficult.

Travel agency Alfa Star, which organized their excursion, has made assurances that all of the tourists are safe and that their prolonged stay has been paid for by the company.

The tourists are expected to return in the coming days. The rest of the travelers staying in Egypt returned from their holidays safely and according to schedule.

Jacek Ciesnowski

Politics

PO-SLD coalition looks increasingly likely Polls in August show that Poland’s political scene is stabilizing to a point where the opposition Law and Justice (PiS) party leads and is capitalizing on the unpopularity of the current government, led by Civic Platform (PO), which remains in second place. Third on the list is leftist party the Democratic Left Alliance (SLD), which has strengthened its position since faring poorly in 2011 parliamentary elections.

At the begining of August a Homo Homini poll showed PiS had 34 percent support while PO received 26 percent support.

Compared to the pollster’s July survey, PiS had gained 3 percentage points while PO had improved its result by one.

Meanwhile, a TNS Polska poll showed PiS with 29 percent support and PO with 25 percent.

Both parties lost one percentage point in support over the previous survey.

Only one August poll, carried out by CBOS, showed PO ahead. The ruling party had 25 percent support while PiS was nipping at its heels with 24 percent.

But while the battle for dominance between PO and PiS continues, the Democratic Left Alliance (SLD) has taken firm hold of third place. The party polled in the double digits in two out of the three August surveys and had a clear-cut lead on the current junior coalition partner, the rural-based Polish

People’s Party (PSL), as well as on the anti-clerical Palikot’s Movement party in all three opinion polls.

A right-left coalition?

The ruling party’s recent weak polling has sparked speculation as to possible coalition scenarios after the scheduled 2015 parliamentary elections. If PO and PSL are unable to obtain enough votes to win a parliamentary majority together, Prime Minister Donald Tusk may have no other choice than to invite SLD to form a threeparty coalition or, if the parliamentary arithmetic allows for it, he could form a simple coalition of his party with SLD. The prime minister addresed the issue in a June 2013 interview with weekly newsmagazine Polityka.

“When suggestions emerge

COURTESY OF KPRM AND SLD

As Civic Platform’s numbers slip, the leftist SLD could be the best choice for a post-2015 coalition

Prime Minister Donald Tusk (left) and SLD leader Leszek Miller (right) that some MPs may leave PO, the natural question that arises is what then, how will you build a majority? Palikot’s Movement is on the margins of politics, Law and Justice is obviously out of the question,”

said Mr Tusk.

“The only party I see on the horizon as a potential partner is SLD.” And so, if the coalition parties’ fortunes do not change before 2015, Mr Tusk, who

emerged from the ranks of the 1980s democratic opposition to communism, may find he will have to partner with SLD, the direct offshoot of the former communist party in Poland.

Remi Adekoya

BUSINESS

www.wbj.pl

Ad market to see 4.5-5% decline The advertising market in Poland may decline by about 4.5-5% in 2013, Maciej Kita from the OMD media house told the Polish Press Agency.

Television advertising is expected to fall by 6% year-on-year in 2013. The press advertising segment will see a decline of 18%.

Outdoor, cinema and radio advertising will also see significant declines, of 6%, 5% and 4% respectively.

The only segment that will record an increase is internet advertising, which should rise by 8% y/y.

Budget deficit almost at z∏.26 billion Poland’s budget deficit amounted to z∏.25.92 billion after July 2013, the Ministry of Finance said in a statement. This amounts to 72.9% of the deficit planned for 2013.

Budget expenditures amounted to z∏.184.45 billion, 55.1% of the plan for 2013. Budget revenues stood at z∏.158.53 billion or 53% of the plan. ●

AUGUST 19 – SEPTEMBER 1, 2013

Airlines

Etihad takes an interest in LOT The UAE-based airline is reportedly interested in acquiring a minority stake in Poland’s state-owned carrier Etihad Airways is the latest entry on the list of potential investors interested in acquiring state-controlled airline LOT. According to industry magazine Aviation Week, negotiations are at an advanced stage.

The cash-strapped Polish carrier has been desperately looking for a strategic partner for years now and is currently surviving on financial aid it receives from the government.

Back in December it received z∏.400 million in public aid and plans to ask for another z∏.381 million soon.

Etihad has been on a spending spree in recent years.

In 2011 it bought a 29 percent stake in Air Berlin and in 2012 it acquired nearly 3 percent of Ireland’s Aer Lingus, while in August this year it purchased a 49 percent stake in Serbia’s Jat Airways. Etihad also owns minority stakes in Air Seychelles, Virgin Australia and India’s Jet Airways.

When it comes to LOT, the

COURTESY OF ETIHAD AIRWAYS

4

Etihad Airways has minority stake in three European airlines UAE-based airline will be purchasing a minority stake as well, since EU law prohibits entities headquartered outside the bloc from holding a major-

ty, a move which would be impossible without having a controlling stake in the carriers. The airline argues it can benefit from joint purchasing,

“Eithad Airways would like to create a harmonized overall network planning strategy.” ity stake in EU-based airlines.

Etihad has explained that it doesn’t plan to merge its European assets into one enti-

code-sharing and would like to create a harmonized overall network planning strategy.

The investment could be

beneficial for both sides. The Treasury would keep its majority stake in LOT, and would prevent a rebranding, which would likely prove unpopular politically. In return, Etihad could sign a management contract which would allow them to run the airline. Etihad has already signed such deal with Jat Airways.

Neither side was willing to comment on the negotiations.

Asking for help Meanwhile, the ongoing saga of compensation for the

Dreamliners’ grounding continues.

After Boeing announced that it had already finished paying out compensation to affected airlines, LOT CEO Sebastian Mikosz replied that his company had not yet received anything and even threatened legal action. To calm matters, Treasury Minister W∏odzimierz Karpiƒski held talks with US Ambassador to Poland Stephen Mull, asking for assistance in talks between the two sides.

When asked about the issue, Boeing, in an e-mailed statement sent to WBJ wrote, “We have been in close communication with our customers since this issue arose.

The details of our conversations with our customers are confidential.”

Dreamliner planes were grounded in January due to problems with their batteries.

At the time, LOT had two Dreamliners, and was the first European airline to fly the aircraft. Since then it has received two more, and expects the delivery of another four. Poland’s Treasury Ministry estimates the damages brought about by the grounding at about z∏.100 million.

Jacek Ciesnowski

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BUSINESS

AUGUST 19 – SEPTEMBER 1, 2013

www.wbj.pl

Stock market

The bourse is beefing up its blue-chip index, has opened a London office and is mulling a new market for agricultural trading

replaced by the WIG30. Predictably, the number of companies in the index will rise from 20 to 30 (see table).

The new index will launch on September 23 this year and will become the exchange’s blue-chip index. The WIG20 will however continue to be published until 2015. The rules stipulate that no single company can have more than a 10 percent share in the index and only up to seven companies from the same sector can be included in the WIG30 at any given time.

The WSE will also introduce WIG30TR, an index based on prices and revenues from dividends and subscription rights.

Other indices on the WSE will also be modified. The midcap mWIG40 will be replaced by the mWIG50 and the smallcap sWIG80 will become the sWIG100.

The bourse had been mulling the idea of creating a WIG5 ultra-blue-chip index, but has withdrawn from it.

The Warsaw Stock Exchange revealed a raft of changes and short-term plans in August.

Most importantly, the bourse announced a revision of its market indices. The blue-chip WIG20 index will be gradually

New blue chips The companies expected to make up the WIG30 index when it begins operation on September 23 this year Alior Bank Asseco Polska Azoty Tarnów Bogdanka Boryszew BRE BZ WBK CCC City Handlowy Cyfrowy Polsat Enea Eurocash GTC ING Bank Âlàski Jastr´bska Spó∏ka W´glowa

Kernel KGHM Lotos LPP Netia Pekao PGE PGNiG PKN Orlen PKO BP PZU Synthos Tauron TP SA TVN

is also planning to expand its other markets and Adam Maciejewski, the WSE’s CEO, said recently that the bourse is strongly considering opening a market for trading agricultural goods and foodstuffs.

The WSE now has three markets: its main, regulated market, where stocks and derivatives are traded; the NewConnect alternative market; and the Catalyst bond market. The WSE group also includes the Polish Power Exchange, where electricity and gas are traded.

The WSE’s management also confirmed that the bourse is in talks to buy a 30 percent stake in Aquis Exchange, the London-based trading system. If carried out, the deal would make the WSE the largest shareholder in Aquis. According to sources cited in Polish media, the stake may be sold for around £13 million.

Aquis is currently waiting for approval by UK regulators and hopes to become a new pan-European equities trading

The Warsaw Stock Exchange

omy’s expectations. For the entire year, most economists expect GDP growth to come in at around 1 percent.

flash estimate released in midAugust, Poland’s GDP grew by 0.8 percent in the second quarter of 2013, year-on-year, on par with the Ministry of Econ-

SHUTTERSTOCK

RA

The construction sector was hit the hardest Highest in years Number of bankruptcies in 2013 compared to 2012 2012

2013

100

98

95 90

88 79

80

76

85

80 74

68

73

77 70

75

40 20

January

February

March

April

May

June

July

Source: Euler Hermes

60

0

market. The institution will operate using a subscription pricing model and aims to bring competition to the European market.

However, the WSE is not the only party interested in Aquis shares. Bob Diamond, the former Barclays chief executive, has been rumored as one of the potential investors. Mr Diamond was ousted from Barclays last year after his involvement in the LIBOR scandal was revealed.

The WSE also recently opened an office in London. Its main focus will be to attract UK-based high-speed trading companies to the Warsaw bourse in order to boost volumes. The office is being led by Peter Niklewicz. “We are currently in discussions with a number of players and the initial feedback has been positive,” Mr Niklewicz told the Financial Times.

Kamila Wajszczuk, Jacek Ciesnowski

Competing bidders for GTS Central Europe

Bankruptcies at 10-year high A total of 98 Polish companies declared bankruptcy in July 2013, the highest monthly figure in a decade, according to a report by Euler Hermes.

The sectors with the greatest number of bankruptcies were the construction industry, the paper production industry, the entertainment industry and the hospitality industry. In July 2012 just 75 companies went bankrupt.

“The figure of almost a 100 bankruptcies in a month is the highest since a decade ago, before Poland joined the European Union, when it was still feeling the effects of the millennium slowdown,” said Tomasz Starus, an analyst at Euler Hermes.

“Export dynamics and internal consumption are for now too little to offset the losses incurred by the construction industry ... and one cannot expect improvement there very quickly,” he added.

Meanwhile, the hardest-hit voivodships were Zachodniopomorskie, Lower Silesia and Mazowieckie, which each saw 15 companies go bankrupt. Ma∏opolskie was next, with 14 bankruptcies.

Poland’s GDP growth in the first quarter of this year stood at 0.5 percent, according to the Central Statistical Office (GUS). According to a

The Warsaw Stock Exchange is looking for ways to boost its trading

International expansion

Agricultural market

Source: The Warsaw Stock Exchange

MATEUSZ GO¸ÑB/WBJ

WSE reveals new indices, expansion plans

US telecommunications firm Level 3 Communications has made a bid for telecom infrastructure firm GTS Central Europe, according to sources quoted by Bloomberg. The sources added that Level 3 is competing against Deutsche Telekom to buy the Polandbased firm. Reuters has reported that the latter is close to finishing due diligence on a possible bid for GTS. Neither of the involved companies commented on the reports, Bloomberg wrote.

Miros∏aw Godlewski, the CEO of Polish telecommunications firm Netia, said that his company is interested in buying the Polish part of GTS.

“GTS has always been an interesting company for us to take over,” Mr Godlewski told reporters. “We are interested in buying it.”

GTS is a portfolio company of private equity fund Innova Capital. It has a fiber optic network and data center network in Poland, the Czech Republic, Hungary, Romania and Slovakia. It has some 38,000 customers and a 26,000-km-long fiber network.

Last year it recorded revenues of €387 million.

Market sources had earlier listed Deutsche Telekom and Czech fund PPF among possible buyers for GTS. Kamila Wajszczuk

5

Agora’s net profit disappoints Poland’s largest publishing group Agora had a consolidated net profit of z∏.1.3 million in the second quarter of 2013, equal to its Q2 2012 net profit. However, analysts had expected the company to record a Q2 profit of z∏.2 million.

In the first half of 2013, Agora registered a net loss of z∏.0.2 million and an operating profit of z∏.4 million with revenue at z∏.533.7 million. Agora’s flagship daily Gazeta Wyborcza had an average circulation of 225,000 copies in Q2 2013, 12.7% less than a year earlier.

BG˚ posts profit in Q2 In the second quarter of 2013, the consolidated net profit of Rabobank’s Bank BG˚ was z∏.53 million compared with a z∏.1 million loss in Q2 2012. In the first half of this year the lender had a net profit of z∏.82.5 million, 109.2% higher than in H1 2012. Bank BG˚’s net interest income in Q2 2013 was z∏.242.54 million compared to z∏.257.5 million a year earlier.

PGNiG improves results Natural gas giant PGNiG had a consolidated net profit of z∏.352 million in Q2 2013 compared with a net loss of z∏.310 million during the same period last year. The net profit was slightly lower than analysts’ expectations of z∏.393 million. The company said results improved on higher extraction levels and better sales margins. ●

6

BUSINESS

www.wbj.pl

Mining

AUGUST 19 – SEPTEMBER 1, 2013

Coal

KGHM’s net profit sees slump JSW disappoints with Q2 results Despite the lowerthan-expected results, the firm is not scrapping expansion plans

Poland’s copper and silver giant announces lower than expected Q2 profits

Poland’s largest coking coal producer Jastrz´bska Spó∏ka W´glowa (JSW) reported a consolidated net profit of z∏.25 million in the second quarter of 2013, much lower than market consensus forecast of z∏.42 million.

“The results correspond to a period of low coal and coke prices and an unfavorable economic situation,” the company said in its statement.

The profit falling below market expectations may be a herald of even worse news. In early

COURTESY OF KGHM

KGHM, Europe’s secondbiggest copper producer, posted a lower-than-expected consolidated net profit of z∏.685 million in the second quarter of 2013, which was roughly a 60 percent drop year-on-year and significantly lower than the average market forecast of z∏.819 million.

“Because of worsening macroeconomic conditions the company is in the process of verifying its results forecast,” W∏odzimierz Kiciƒski, vice president of KGHM, said in a statement.

The company’s net profit in the first half of the year amounted to z∏.1.4 billion, 53.8 percent of the forecast net profit for the full year.

In the first half of the year, KGHM paid a mineral tax (introduced last year) of over z∏.1 billion compared to the z∏.443 million it paid in the corresponding period of last year.

So is the company’s slump in profits due to the new tax or rather the result of worsening macroeconomic conditions its vice president spoke of?

“Actually both played a

Analysts say the copper producer’s loss on hedging was the biggest disappointment part. However, the tax should not have had such a significant impact on its year-on-year comparisons because in Q2 of 2012, KGHM had already started paying this new mineral tax,” said Piotr Nawrocki, a sector analyst at Dom Inwestycyjny Investors.

Mr Nawrocki said analysts had already factored in the tax and lower metal prices in their forecasts.

“What disappointed the market more was KGHM’s loss of over z∏.50 million on hedging.

We had expected them to make a profit from that,” he said.

Mr Nawrocki also pointed to the fact that KGHM International, the company’s foreign subsidiary, had recorded a net profit of only z∏.7 million. Furthermore, Mr Nawrocki also predicted that if, as some expect, the US Fed ceases its quantitative easing program in 2014, copper prices could fall further along with other commodities which have been a favorite of investors recently.

RA

August the company’s CEO Jaros∏aw Zagórowski warned that the company may even see a net loss in the third quarter of this year due to falling coal prices, according to Reuters.

The CEO added that JSW had earlier expected to remain in the black thanks to cost cuts, but prices fell more than forecast. “Analysts are right to say that we will have to work hard to close the year in the black because, of course, there is a risk of a [full-year] net loss,” he said.

Despite facing harsh times, the company is not scrapping its expansion plans. It is currently looking to acquire a coking plant from Czech mining group New World Resources, provid-

ed the seller meets all of JSW’s conditions. The Polish miner has voiced several reservations after performing due diligence and the company is now waiting for a reply.

“There are factors that may result in future costs,” JSW’s CEO said. “The final offer will depend on the answer we get.”

The company’s Q2 operating profit amounted to z∏.54.5 million, while revenue was at z∏.1.93 billion. Analysts expected an operating profit of z∏.67.8 million and revenue of z∏.1.97 billion. In the first half of this year, JSW had a net profit of z∏.166.9 million, with its operating profit at z∏.258.6 million and revenue at z∏.4.11 billion.

KW

Government looks to boost growth by expanding SEZs Poland’s government has decided to expand the area of two of the country’s special economic zones, the Chancellery of the Prime Minister said. The EURO-PARK Mielec Special Economic Zone will be expanded by 53.4 hectares and the Kostrzyn-S∏ubice Special Economic Zone will have 114.9 more hectares of land. The government expects the move to generate extra investment of z∏.1.7 billion and 6,800 new jobs.

“In order to help economic

recovery, as well as to create new workplaces, [the government] has decided to expand the Kostrzyn-S∏ubice SEZ by 114.9 ha of land attractive to investors,” the chancellery said in a statement and added that thanks to the expansion “an estimated 4,000 jobs will be created within the zone and about 827 outside it. Investment outlays will amount to some z∏.971 million.”

The chancellery also said that some of the planned invest-

ments in the new areas of the Mielec SEZ have already been announced. Resins and construction chemicals producer Lerg-Chem will invest z∏.90 million and create at least 80 new jobs, while construction firm KSO will build a production plant for large steel elements used in windmills, which will be worth z∏.298 million and will create at least 451 jobs.

The new regulations are set to come into force on August 31.

KW

Media patronage

Towards a new deal DAILY EXECUTIVE DIGEST Poland A.M. gives you the biggest Polish stories of the day.

Have the most valuable news delivered to your inbox each weekday morning.

S i g n u p f o r a 2 - w e e k f r e e - t r i a l ! w w w. p o l a n d a m . p l G e r m a n v e r s i o n : w w w. p o l e n a m m o r g e n . p l

This year’s edition of the Economic Forum in Krynica, scheduled for September 3-5, will focus on the recent economic crisis, and the social, economic and political transformations it caused. It will also try to answer if the region is on the path to recovery.

Some 150 panel discussions, plenary sessions and special events devoted to topics ranging from macroeconomics to international politics, energy, innovation and health care, will be held during the event. Panelists include EU leaders, officials from Central and Eastern European countries, executives of many large firms, experts and journalists. The forum’s theme this year is: “Towards a New Deal.”

Every year, over 2,500 guests and over 500 journalists from around 60 countries from Europe, Asia and North America participate in a series of panels. The event is the largest of its kind in the CEE region. This year, they’ll examine issues such as how to ensure economic growth and fight unemployment.

Other important topics to be raised during the forum include issues surrounding euro adoption, reducing the economic distance between “new” and “old” EU member states, the signing of association agreements with countries included in Eastern Partnership, the development of new models of cooperation between the EU, Russia and China and questions of financing key infrastructural projects.

The forum’s history stretches back to 1991.

The first discussions centered around CEE countries joining the EU and NATO, and since 2004 participants have looked for ways to lessen the distance between new and old member states or how to benefit from the membership in these organizations.

This year’s forum will provide an interesting take on the EU common currency. It will contrast the Baltic States – Estonia (which adopted the euro in 2011), Latvia (which will join in January 2014) and Lithuania (which is expected to adopt the currency in 2015) – with CEE countries such as Hungary, the Czech Republic and Poland, where politicians are more cautious about introducing the common currency.

In recent years the Krynica forum has hosted important ministerial and bilateral meetings, including: a summit of Justice Ministers of the Visegrad Group, and a summit of Economy Ministers of the Eastern Partnership countries, which discussed the impact on the EU’s economy on its neighbors.

The forum is also accompanied by several other events, including the Forum of Regions, which will also be held in Krynica, and the Investment Forum in Tarnów. The conference in Tarnów will be devoted to the financial sector, the chemical industry and development.

Additionally, in May, the 4th Innovation Forum – a partner event – was held in Rzeszów. It concentrated on the space industry and new technologies. ●

FINANCE & ECONOMICS

AUGUST 19 – SEPTEMBER 1, 2013

Economic growth

Preliminary figures show Polish GDP grew 0.8% in Q2 “Taking into account other available statistical information it is likely that the key for acceleration of economic growth was improvement in foreign trade. At the same time, the domestic demand was probably still in contraction, mainly due to falling investments,” said the BZ WBK economists.

The economists said that the recovery was still “fragile” and would be “gradual,” but expect growth to continue to speed up, so that end-year GDP growth will amount to around 1 percent.

KW, AK

Bouncing back?

Poland’s quarterly GDP growth (% y/y), 2009-2013 5 4 3 *Flash estimate

2 1 0

Source: Central Statistical Office

Poland’s GDP grew by 0.8 percent year-on-year in the second quarter compared to 0.5 percent y/y in Q1, according to a flash estimate released by statistics office GUS. The seasonally adjusted growth was 0.4 percent quarter-on-quarter and 1.1 percent y/y.

Economists surveyed by the Polish Press Agency had expected the Q2 GDP growth to be 0.7 percent y/y.

The figures were an improvement on Q1, when Poland’s economy grew at a rate of just 0.5 percent y/y, its slowest rate in four years.

The statistics office expects improvement to continue. “In the following quarters we can count on moderate growth increases,” GUS vice president Halina Dmochowska said.

Analysts saw the figures as positive and a confirmation that the Polish economy had hit bottom in Q1 and was

bouncing back.

“Today’s data confirm our hypothesis that [the] Polish economy has already passed the bottom of the slowdown and the scenario of a recession or even prolonged stagnation is getting less likely,” said economists from Bank Zachodni WBK in an e-mailed statement.

Most analysts said that increasing foreign trade, especially exports, was the main factor behind the rebound.

“Forward looking indicators like PMI in Poland ... support the expectations of export led recovery,” said Agata Urbaƒska, CEE economist at HSBC.

Q1 2 Q2 009 20 Q3 09 2 Q4 009 20 Q1 09 2 Q2 010 20 Q3 10 2 Q4 010 20 Q1 10 2 Q2 011 20 Q3 11 2 Q4 011 2 Q1 011 20 Q2 12 2 Q3 012 2 Q4 012 20 Q1 12 Q2 2013 20 13 *

Though ‘fragile’ and ‘gradual,’ Poland is seeing a recovery, say economists

Inflation crushes expectations in July CPI inflation in Poland amounted 1.1 percent year-on-year in July, statistics office GUS announced. The month-onmonth CPI figure was 0.3 percent.

Annual CPI was well above the expectations of analysts surveyed by the Polish Press Agency. They saw July inflation at 0.5 percent y/y and 0.2 percent m/m.

Prices of housing-related goods and services grew by 1.5 percent month-on-month, those in the transportation sector grew by 1.1 percent and those in

recreation and culture grew by 0.6 percent. Housing-related price growth was most influenced by a 47.6 percent increase in waste management prices due to the enforcement of a new law in the sector.

At the same time prices fell month-on-month in the clothing and footwear and food and nonalcoholic beverages sectors (by 2.7 percent and 0.3 percent respectively).

In an e-mailed comment, BZ WBK economists wrote that the strong growth in July raised the CPI path for the upcoming

months. “As a result, [the] inflation rate will be probably closer to 2% than to 1% and the end of this year, while [the] inflation target of 2.5% may be reached already in 1H2014,” they said.

“However, this is not necessarily a sign of rising inflationary pressure – [the] rise in CPI was mostly due to [a] low base from last year and to changes in administered prices,” the economists wrote. The increase may still be an argument for the Monetary Policy Council to consider interest rate hikes, KW they added.

Current account surprises with another surplus For the third consecutive month, Poland had a current account surplus in June, when it amounted to €574 million, according to data published by the National Bank of Poland.

The total surplus of both the current account and the capital account was almost €1.2 billion.

“The current account surplus amounted to €0.57bn in June and was wider than we and the consensus had expected (€0.22bn),” said economists from Citi Research in an e-mail.

“The NBP also revised data for prior months but two things remain intact: a) June was the third consecutive month of CA surplus; b) 2Q data show substantial improvement in both QoQ and YoY terms. The balance of payments data also show significant widening of the trade surplus as well as large surplus in transfers (against seasonal trends) thanks to inflows of EU funds,” they added.

On Monday, GUS also released Poland’s foreign trade figures. Poland’s foreign trade

deficit amounted to €505.3 million ($719.4 million) in JanuaryJune, the statistics office said.

When calculated in z∏oty, the deficit was z∏.2,053.2 million.

Exports amounted to €74,162.5million ($97,703.6 million, z∏.307,036.3 million), while imports stood at €74,667.8 million ($98,423 million, z∏.309,089.5 million).

Trade with EU countries stood for 77.4 percent of Poland’s export value and for 58.2 percent of the import value.

KW

www.wbj.pl

7

8

COVER STORY

www.wbj.pl

AUGUST 19 – SEPTEMBER 1, 2013

Politics

The evolution of Janusz Palikot Ewa Boniecka: Your party, Palikot’s Movement, has been faring poorly in opinion polls and is losing support. How do you plan to turn things around?

Janusz Palikot: Firstly, I do not agree that things are going so terribly, because Palikot’s Movement is in better shape than the media have reported.

The most recent Social Diagnosis [a regular sociological survey compiled by wellknown psychology professor Janusz Czapiƒski], which is extremely reliable because it is

based on a survey of over 60,000 Poles, found that our party has about 10 percent support – nearly the same amount as we received in the 2011 parliamentary elections.

It is true that some polling institutions and politicians from other parties are trying to convince the public that Palikot’s Movement is losing support. But that’s not the case. I travel around the country and I talk to hundreds of people and I know that voters who want a secular state, one which is less bureaucratic,

which secures freedom for sexual minorities, and which limits the Catholic Church’s influence on politics, are staying with Palikot’s Movement.

Still, I have to admit that I expected that support for our party would grow above our election result in 2011, which so far has not happened.

But your parliamentary caucus has seen six members defect. Why was that?

When it comes to these members, two of them were thrown out of the party and the remaining four left the caucus because [the majority governing coalition party] Civic Platform [PO] bought them, offering them some juicy political fruit. And this is one of the problems of our political system, that such political corruption occurs.

COURTESY OF PALIKOT’S MOVEMENT

The leader and founder of the socially liberal Palikot’s Movement party, Janusz Palikot – widely considered Polish politics’ enfant terrible – sits down with WBJ for a frank analysis of the party’s current circumstances and how both he and the party must change to attract more voters

Mr Palikot says his party’s biggest problems that its “political formula” has been too narrow Your party’s candidate also recently lost a high-profile city council race in the northern city of Elblàg. Why do you think that was?

Our party was testing a model by which we supported a candidate for city council, Natalia Rodziewicz, who came from outside the political establishment. But Natalia, who was born in Elblàg, failed to gain any support. It turns out that while voters constantly complain about their bad politicians, they nonetheless prefer to vote for local politicians they have known for a long time.

The answers you are giving sound a lot like the same excuses that typical politicians give. But you are not considered a typical politician, and have a reputation for being more frank. Let’s be serious. Doesn’t Palikot’s Movement need to change something?

Well, I’m not claiming that everything is fine in the party.

Like I said, our support has not increased. That’s not a disaster, as some commentators like to make it out to be, but it does not foment optimism.

We are taking steps to overcome our present difficulties and I am sure that we will succeed. Certainly we are not being passive. We have built a new political body – Europe Plus [an initiative bringing

together various leftist politicians and those from Palikot’s Movement for joint political action] – which according to opinion polls could gain 15 percent and even up to 20 percent support in next year’s European Parliament elections.

While Europe Plus, created under the patronage of [former President] Aleksander KwaÊniewski, is now concerned primarily with the European Parliament elections, its political impact will grow, because it will catalyze close cooperation between center-left, liberal and other strongly pro-European parties and organizations in various domains of political activity.

Our party is open to new ideas about how to operate. We want to widen our constituency and reach out to new groups of people disillusioned with the status quo. I think that our party’s biggest problem over the last two years has been that our political formula was too narrow. Somehow we could not keep the party from being associated with just three issues: the Church, gender and marijuana.

Even while we were dealing with other matters and have presented proposals on both economic and social issues, our message never broke through to the public.

But it was you who demanded the cross in the Sejm chamber

be removed, it was you who made gay and transgender members the face of the party, and it was you who threatened to smoke marijuana in public.

As the party’s leader and founder, aren’t you responsible for it being pigeonholed like it was?

Maybe, but as the leader of the Palikot’s Movement I am deeply concerned about, and responsible for, my party and its future, so now the question I am faced with is: What kind of other issues do we have to address in order to gain traction, and how do we present the whole program in a coherent way? For that reason, in the fall we are organizing a party congress, which will lead to certain changes.

In the months thereafter, we will be introducing those changes.

We hope that our ideas about how to overcome the economic crisis and how to resolve some social problems, as well as our liberal approach for dealing with ethical issues, will bring results in expanding the public debate and will increase the support for our party.

The political identity of your party is generally considered volatile. Is a change of identity one of the major adjustments you plan to make?

I consider most current political labels anachronistic, but if

AUGUST 19 – SEPTEMBER 1, 2013

But there is a very public battle going on between you and leftist leader Leszek Miller, which resulted in his party, the Democratic Left Alliance (SLD), refusing to participate in Europe Plus. The rivalry between you two is widely perceived as bitter, and destructive to the left. Isn’t that important?

There is no personal conflict between Leszek Miller and myself, in spite of many bitter words, which were said on both sides and which are so eagerly reported in media.

The paradox of the situation is that there are artificial efforts to wed our parties and these have not succeeded, because we have separate electorates.

SLD’s electorate is much older than ours and very conservative in ethical matters. All the research shows that there is a flow of electorate between SLD and PiS, because of their similar approach to social matters, and not between SLD and Palikot’s Movement.

Nevertheless, we are pushed into personal conflicts due to Leszek Miller’s temperament – maybe also mine – even while Palikot’s Movement is less provocative towards his party than he is towards ours.

Maybe it will surprise you if I add that I think Leszek Miller is right to oppose a marriage of our two parties and also to his party joining Europe Plus. He is also right in his diagnosis that the electorate of SLD will not accept cooperation with Palikot’s Movement in any form.

So it is nonsense to saturate public opinion with speculation of such an agreement, because it will never happen.

Each of our two parties will shape their future in their own ways.

You have decided to include Palikot’s Movement in the Europe Plus initiative. Are you considering rebranding the party and shaping its

www.wbj.pl

9

FM Rostowski on his way out?

COURTESY OF PALIKOT’S MOVEMENT

we must continue along that line of discussion, then look at [Poland’s largest opposition party] Law and Justice [PiS], which is a nationalistic and fundamentalist right-wing party, but populist in its approach to social matters.

So when it comes to the political identity of Palikot’s Movement, I would say this: We are certainly not a party on the right. But are we leftist? I would say that our center-left identity includes a lot of liberalism and the “green” philosophy of Europe’s green parties.

We have based our program on what we think should be done to make Poland a more modern state, to provide steady economic growth, proper jobs and better social capital. Whether this is leftist or not is of secondary importance. Palikot’s Movement is not a dogmatic party.

COVER STORY

Europe Plus is preparing for EU parliamentary elections in 2014 future under that new political umbrella?

That is a very difficult question. Currently, we have to decide on how to maintain the political character of Palikot’s Movement, with its very liberal and progressive ideas about ethical matters and stance towards the Church, and at the same time we must also decide how to expand our electorate.

In another words – we must figure out how to move forward in a way by which we don’t lose those who voted for us and who want us to be ourselves, and at the same time we have to change and build cooperation with some other progressive and strongly proEuropean political forces within the framework of Europe Plus.

At present, myself and other members of our caucus are traveling around the country and talking with members and sympathizers of Palikot’s Movement about those possible changes. If at the end of August we come to the conclusion that deep changes in our movement are necessary, I will not exclude the possibility of implementing them.

We will present the results of our discussions at our congress in September and I am not excluding possible changes in our party’s formula. The question is whether to do it by introducing new elements to our program or whether even to change the name of the party.

But the list of candidates that you will present for the European Parliament elections will be under the Europe Plus banner?

Yes, and I am sure that we will build an excellent common list under that name. The question is what we do after the election and whether our movement will function as a

permanent part of Europe Plus. But it is too early to answer that now. However, the fact that we will put more emphasis on European issues – Poland’s role in the EU, our foreign policy – will enhance our program.

Therefore, even if we keep the name Palikot’s Movement, it will be a different movement. We are in favor of deep integration with the EU; we think that Poland’s security, autonomy and independence depends on the strength of the European Union. We favor building a federal European Union and we think that Poland should adopt the euro.

In European and economic issues, Palikot’s Movement has some common ground with PO. So, are you considering the possibility of close cooperation or even a coalition with PO if it achieves good results in the next parliamentary elections?

What is sure is that however the election results turn out, we will never form a coalition with PiS. PO is in decline – it has lost 15 percentage points from its previous level of support. If PO fails to win the next [parliamentary] election [currently scheduled for 2015], it will lead to significant changes in our political scene. I would not exclude the possibility of forming a coalition with PO, but it needs to change. I cannot agree with Donald Tusk’s philosophy that he will continue to govern without setting any economic and social goals, and just keep spending money from the EU. The distribution of EU funds resembles a simple give-away instead of investment in order to stimulate economic growth.

I will give you an example. We have spent the €1

billion in EU funds on the development of rural areas and on helping farmers purchase tractors. Even those farmers who own only two or three hectares of land have received large amounts of money from the EU for the purchase of such machines. However, no food-processing factories have been built. Poland is a huge producer of tomatoes and peppers, but we sell them as raw products at low prices instead of processing them in our country and creating jobs.

Soon, the government will open a public debate about how the z∏.400 billion that Poland will receive in EU funding from the bloc’s next multiyear budget should be spent. What priorities will your party argue for?

How we invest EU funds for the next seven years is a fundamental issue for Poland. And while I praise Donald Tusk for winning that money for Poland, I am very worried about how it will be allocated in the coming years.

Certainly, it should not be distributed for mostly unproductive ventures, like renovating parks in small places, but set aside for investments. I will point out that, for example, renovating historical castles can help to increase the development of hotels and local tourism. The most important thing is to think about how to use the money strategically. It could be the last such amount Poland ever receives from the European Union.

New legislation is needed to create the operational programs for using those funds and the current government was not doing this. Ireland provides a good example of how to invest EU funds wisely.

The country invests a lot in

developing technology, innovation and education linked with business. Spending EU funds should not be done for the political benefit of the governing party, but based on objective economic calculations, and I will emphasize this in the debate.

But for Palikot’s Movement it’s not only about talk – we are acting. We have set up an office in Brussels, where together with EU employees of Polish background we are working on proposals for investing EU funds in Poland.

We will present these in the debate, which we expect the government to begin by the end of this year.

You entered the political establishment quite some time ago, first as a member of PO, later as creator and leader of Palikot’s Movement.

You present yourself as an eccentric, unconventional politician. Now that you want to change your party, do you also want to change your public image?

Yes, I want to change my public image – and I am already doing this, but it takes time.

As the leader of the party, I have to match my authentic personality and colorful language with the style and dignity that should come with leadership. That change of my public image is already happening, although it may not have been widely noticed so far.

But I want to underline that I do not intend to completely change my colorful public image, because it is a part of what gives Palikot’s Movement its strength. So I want to preserve my authenticity, which is shown in my language, but certainly my party and myself are evolving towards a more balanced image. ●

An upcoming government reshuffle may mean three ministers, including Deputy Prime Minister and Finance Minister Jacek Rostowski, will lose their jobs, three sources told Reuters.

Environment Minister Marcin Korolec and Sports Minister Joanna Mucha may also be replaced, they said.

Earlier reports by radio station RFM FM also stated Mr Rostowski might be on his way out.

The radio’s source said that Mr Tusk is unhappy with having to significantly amend the state budget for this year. The reshuffle is said to be aimed at restoring public confidence in the ruling party and thus preparing it for future elections.

Government approval rating in the doldrums Only 18 percent of Poles approve of the current government’s work, according to a recent poll by TNS Polska.

Some 74% of the respondents said they disapproved, while 8% said they did not have an opinion. Prime Minister Donald Tusk currently has the approval of 19 percent of Poles (a 3 percentage-point drop m/m), while 72% disapprove of his work.

New political entity on the horizon Former Justice Minister Jaros∏aw Gowin will leave the ruling Civic Platform (PO) party and start a political grouping with Pawe∏ Kowal, now a member of Poland Comes First (PJN), and Przemys∏aw Wipler, a former member of Law and Justice, unnamed sources told daily Polska The Times. They said that the entity will be launched soon after PO’s internal elections.

A source close to Mr Wipler’s Republicans association told the newspaper that Mr Kowal would not necessarily be followed by other PJN members. ●

10

OPINION & ANALYSIS

www.wbj.pl

AUGUST 19 – SEPTEMBER 1, 2013

The ghost of inflation future Brigitte Granville

W

ith all of the problems afflicting the world economy nowadays, inflation seems to be the least of our worries. In addressing the post-2008 economic malaise, which stems from overindebtedness, policymakers are correct to focus on the threat of debt deflation, which can lead to depression.

Yesterday’s problem?

“Dismissing inflation as “yesterday’s problem” could undermine central banks’ efforts to address today’s most pressing issues.”

SHUTTERSTOCK

But dismissing inflation as “yesterday’s problem” could undermine central banks’ efforts to address today’s most pressing issues – and, ultimately, facilitate inflation’s resurgence. Understanding how the Great Inflation from the late 1960’s to the early 1980’s was tamed offers important lessons for addressing farreaching economic problems, however different ours may be, and provides insight into the dangers that may lie ahead.

The first useful lesson concerns expectations. In the decades following World War II, the doctrine that inflation needed to be traded off against employment – based on the relationship that William Phillips described in 1958 – dominated economic thinking. But the Phillips curve fared poorly in the 1970’s, when many countries experienced “stagflation” (high levels of both inflation and unemployment).

This vindicated criticism by Milton Friedman and Edmund Phelps, among others, who had already begun to argue that the Phillips curve represented merely a shortterm relationship. If people do not expect inflation, the illusion of increased purchasing power can boost employment and output for a relatively short period. But once workers realize that real wages have not increased, unemployment will return to its “natural” level consistent with stable inflation.

Later, “new classical” economists like Robert Lucas and Thomas Sargent demonstrated that once people understand that inflation is being manipulated to generate market optimism, the monetary authorities’ actions lose their impact. The result is higher prices and no job creation.

These ideas, combined with effective policy practice like that of the US Federal Reserve under Paul Volcker’s chairmanship, led many countries worldwide toward more explicit inflation targeting, in which central banks stabilize inflation expectations by making a credible commitment to a predetermined rate of price growth.

By the 1990’s, inflation was old news in the advanced economies, with much of the developing world soon to follow.

The expectations game Today, the Fed is again playing the expectations game. But, in order to stave off the threat of deflation and depression, it is targeting a lower unemployment rate, below 6.5 percent. As progress toward that target is made, Fed Chairman Ben Bernanke announced in late May, the Fed will begin to “taper” its program of long-term asset purchases known as quantitative-easing (QE).

That prospect has already sparked renewed financial-market volatility.

In July, Bernanke attempted to calm investors with remarks signaling that, amid inadequate employment gains and persistently low inflation, the Fed would not abandon monetary stimulus anytime soon.

This stance reflects the Fed’s dual mandate, according to which monetary policy targets maximum employment consistent with price stability.

But the credibility needed to anchor expectations is difficult – sometimes even impossible – to achieve when two targets are being pursued simul-

taneously. The resulting uncertainty could trigger more volatility, especially in bond markets, potentially impeding economic recovery (for example, by pushing up long-term mortgage rates) or augmenting future inflation risk.

Building credibility By contrast, the credibility associated with pursuing only an inflation target builds on itself. Given this, it would be safer and more effective for the Fed and other central banks to pursue a single inflation target, and then use the gain in credibility to aid economic recovery.

For example, a central bank might announce that circumstances during, say, the next two years warrant a doubling of the inflation target from the usual – that is, almost never varied – annual rate of 2 percent. Such an approach would reduce the risk of debt deflation, while capping inflation expectations to prevent a damaging surge in prices as recovery takes hold.

Such preventive measures are all the more important in view of the Great Inflation’s second relevant lesson: fiscal discipline is essential to price stability. Sustaining a high

budget deficit over many years will lead to an unmanageable debt buildup, unless that debt is inflated away or restructured.

As it stands, the United States – and presumably the United Kingdom – plans to begin tapering QE when the economy is growing faster, unemployment is lower, and government and household revenues are rising.

But will tax revenues rise fast enough to offset the escalating cost of servicing the government’s mountain of debt?

Even if public debt is not growing as fast as before, the huge volume of existing debt must be repaid. The best cure would be controlled higher inflation – that is, the aforementioned temporary increase in the inflation target – to erode the real value of public debt and forestall the risk of a much more damaging inflationary shock later, one in which expectations become unhinged.

Out of the frying pan ...

But, while this approach could work in the US, the European Central Bank is institutionally constrained from raising the inflation target.

Although its pledge last August to purchase unlimited quantities of

short-term government debt has calmed markets, activation of the ECB’s “outright monetary transactions” program is conditional on continued fiscal retrenchment. So the euro zone’s crisis-stricken economies cannot grow.

In this context, the euro zone’s most heavily indebted countries will have to force their creditors to accept a restructuring of public debt. The preferable alternative would be growth-boosting devaluations – that is, a euro zone breakup. But if, as seems likely, such devaluations are left too late, debt restructuring might still be needed.

In the coming years, Europe appears set to lurch from the frying pan of depression to the fire of high inflation. When it does, the lessons of the Great Inflation will suddenly be all too pertinent. ● Brigitte Granville is professor of international economics and economic policy at the School of Business and Management, Queen Mary, University of London, and the author of Remembering Inflation.

Copyright: Project Syndicate, 2013.

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OPINION & ANALYSIS

AUGUST 19 – SEPTEMBER 1, 2013

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11

Has austerity failed in Europe?

Daniel Gros

A

No choice Countries whose governments have either lost access to normal market financing (like Greece, Ireland, and Portugal), or face very high risk premia (like Italy and Spain in 20112012) simply do not have a choice: they must reduce their expenditures or get financing from some official body like the International Monetary Fund or the European Stability Mechanism (ESM). But foreign official financing will always be subject to lenders’ conditions – and lenders see no reason to finance ongoing spending at levels that previously led a country into trouble.

So, in the euro zone periphery, austerity is not a question of fine-tuning demand, but of ensuring governments’ solvency. Economists like to point out that solvency has little to do with the ratio of public debt to today’s GDP, and much to do with debt relative to expected future tax revenues. A government’s solvency

SHUTTERSTOCK

lthough many European governments have announced expenditure cuts and tax hikes, their debt-to-GDP ratios continue to deteriorate. So, if the purpose of austerity was to reduce debt levels, its critics are right: fiscal belt-tightening has failed. But the goal of austerity was not just to stabilize debt ratios.

In fact, austerity has worked as advertised in some cases. Germany’s fiscal deficit temporarily increased by about 2.5 percentage points of GDP during the global recession of 2009; subsequent rapid deficit reduction had no significant negative impact on growth. So it is possible to reduce deficits and keep the debt-to-GDP ratio in check – provided that the economy does not start out with large imbalances, and that the financial system is working properly. Obviously, the countries on the euro zone’s periphery do not meet these conditions.

Has belt-tightening worked? thus depends much more on longterm growth prospects than on the current debt-to-GDP ratio.

A reduction in the deficit today might lead in the short run to a fall in GDP that is larger than the cut in the deficit (if the so-called multiplier is larger than one), which would cause the debt-to-GDP ratio to rise. But almost all economic models imply that a cut in expenditures today should lead to higher GDP in the long run, because it allows for lower taxes (and thus reduces economic distortions).

Austerity should thus always be beneficial for solvency in the long run, even if the debt-to-GDP ratio deteriorates in the short run. For this reason, the current increase in debt-

to-GDP ratios in southern Europe should not be interpreted as proof that austerity does not work.

Moreover, austerity has been accompanied by structural reforms, which should increase countries’ long-term growth potential, while pension reforms are set to reduce considerably the fiscal cost of aging populations. Such reforms promise to strengthen the solvency of all governments that adopt them, including those on the euro zone’s periphery.

External balance More important, austerity has been very successful in restoring external balance to the euro zone’s periphery.

The current accounts of all southern euro zone countries are improving

rapidly and, with the possible exception of Greece, will soon swing into surplus. This fundamental change has contributed to the reduction in risk premia over the last year, despite the political upheaval that continues in many countries (particularly Italy, Portugal, and Greece).

The external aspect is crucial. If public debt is owed to domestic investors, it can be serviced with the taxes levied on GDP. But debt owed to foreigners can be serviced only with goods and services sold abroad – that is, exports. Thus, the key variable for countries that had large currentaccount deficits, and thus are burdened today with high foreign-debt levels, is not the debt-to-GDP ratio, but the foreign debt-to-exports ratio

(together with the growth prospects for exports).

Here, developments are encouraging. During the boom years, when countries like Greece, Portugal, and Spain were running ever-larger external deficits, their exports did not grow quickly, so their foreign debt-to-exports ratios deteriorated steadily, reaching levels that are usually regarded as a warning signal. For example, for Spain and Portugal, the sum of past deficits relative to annual exports reached 300 percent and 400 percent, respectively, in 2009, whereas a 250 percent ratio is typically regarded as the threshold at which external-financing problems can arise.

With austerity, imports have crashed everywhere in the periphery, while exports – helped by falling labor costs – are increasing (except in Greece). As a result, these countries’ current accounts are now moving into surplus, and their external solvency is improving rapidly.

Indeed, according to the IMF, Spain should record growing currentaccount surpluses over the next five years, as exports rise strongly, thus cutting the external debt/export ratio by half (to about 150 percent in 2018), while Portugal’s ratio should fall to about 250 percent. Even Italy, whose external deficits have remained small, will soon record a current-account surplus.

Austerity always involves huge social costs; but it is unavoidable when a country has lived beyond its means and lost its foreign creditors’ confidence. The external fundamentals of the euro zone’s periphery are now improving rapidly. In this sense, austerity has done exactly what it was intended to do. ● Daniel Gros is director of the Center for European Policy Studies.

Copyright: Project Syndicate, 2013.

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12

DEFENSE IN FOCUS

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AUGUST 19 – SEPTEMBER 1, 2013

Defense spending

International arms firms line up as Poland aims to spend billions Poland is one of the few European Union countries that not only has maintained the level of its defense spending since the beginning of the global financial crisis but even plans to increase it in the coming years. According to the latest government plan, by 2022, the Polish Army will have spent z∏.139 billion on modernizing is equipment. So far, the highest amount spent on modernization in any one year has not exceeded z∏.8 billion.

According to Poland’s constitution, the country has to spend at least 1.95 percent of its GDP on defense, but the constitution does not say how much of that sum should be earmarked for buying new equipment and how much on wages, training and other expenses. With the number of Polish troops shrinking in recent years (it fell below 100,000 soldiers in 2012), more money has been freed up to better equip those who remain.

In recent years, the Polish Army has spent between 15 and 25 percent of its annual budget on upgrading equipment – now the share of the budget designated for equipment modernization will be set at around 33 percent. The money has been earmarked for a new missile defense system, new vessels for the navy, new tanks, new training equipment, 70 new helicopters, unmanned aerial vehicles (drones) and new state-of-theart equipment for ground troops.

COURTESY OF AUGUSTAWESTLAND

The Polish government plans to spend billions on modernizing its well-worn equipment.

Weapon manufacturers from all over the world are flocking to Poland to sell their products, but they will have to cooperate with Polish companies to be successful

PZL Âwidnik’s AW149 is one of the helicopters being considered by the Polish Army

Arms race Poland desperately needs to invest in upgrading its defense equipment and infrastructure, since most of what the military uses now dates back to the days of the Warsaw Pact.

According to the General Staff of the Polish Armed Forces, currently only 22 percent of the military’s machinery can be considered “modern.” That number should increase to 65

percent by 2022.

Many Central European countries which are NATO members will be forced to curb their defense budgets in order to trim public spending. The Czech Republic plans to spend 1.11 percent of its GDP on defense in 2013 (the lowest level since 1993), while Slovakia will spend even less than 1 percent of its GDP this year

COURTESY OF POLSKI HOLDING OBRONNY

Poland ground troops should get new equipment soon

on its military. Romania raised its defense budget by 1 percent last year, but in 2010 it slashed it by a staggering 13 percent.

“Many governments believe that their countries are sufficiently protected by NATO membership, so they decided to reduce defense spending and use these funds to counter the effects of the economic crisis,” professor Marek Jab∏onowski, a political scientist from the University of Warsaw, was quoted by Defensenews.com as saying.

Poland, however, will increase its spending and with billions at stake, defense companies from all over the world are trying to get a piece of the pie.

That might not be so easy however, as Poland’s defense ministry has clearly stated that the bulk of the contracts will go to Polish companies or foreign firms working with Polish partners. Contracts will also go to foreign entities that offer technology transfers or place production in Poland. The Defense Ministry expects that Polish companies will take up to 80 percent of future contracts (compared to 50 percent currently).

wants to sell helicopters made in Poland and co-designed by Polish engineers. The only company without a Polishbased subsidiary, Pan-European EADS, has declared that if it wins the tender it will produce its helicopters in ¸ódê.

Polish Defense Minister Tomasz Siemoniak has already announced that Poland will favor companies that can carry out the projects here and which use Polish components and technology.

“The ministry obviously can’t demand that only Polish companies can place bids, but can stipulate, for example, that the equipment has to be serviced within 24-hours, or that spare parts have to be built in Poland,” said S∏awomir Ku∏akowski, president of the Polish Chamber of National Defence Manufacturers.

“This way foreign companies will be forced to place some of the production here.

We have to remember that the ministry gets its funds from the companies’ taxes, among other sources, so it’s logical for the state to encourage them to invest in Poland. It’s a matter of national interest,” he added.

Foreign products, domestic production

Three-way tie

In a recently opened tender for 70 helicopters, worth €22.5 billion, two out of the three bidders already have Polish subsidiaries. Sikorsky Aircraft Corporation owns PZL Mielec and makes its flagship Black Hawk model in the latter’s factories. The second firm in the running is AugustaWestland, which owns PZL Âwidnik and

The bulk of future tenders is expected to go to Polski Holding Obronny (PHO, formerly Bumar), a huge Polish military consortium that encompasses 40 different companies. Still, the state-owned company is looking to expand its portfolio and is in merger talks with armaments producer Huta Stalowa Wola. The decision on the possible merger of the two

companies will be announced by the end of September.

Deputy Treasury Minister Rafa∏ Baniak said that his ministry, which holds controlling stakes in both companies, believes the merger is the best solution.

Still, PHO is unable to bid in every tender since it doesn’t have such a wide portfolio of products. Mr Ku∏akowski expects that the earmarked z∏.139 billion will be split in three ways. One part will go to state-owned companies like PHO, another to other private Polish companies, while the last portion will go to foreign entities with investments in the country. It’s still too early to say exactly how the money will be divided between the three groups, he said.

It is worth remembering that the z∏.139 billion figure is still just an estimate. The final amount of defense spending on modernization through 2022 depends on Poland’s economy. Since the Defense Ministry’s budget is nearly 2 percent of the country’s GDP, if the economy continues its current slow growth, the actual level of expenditure could end up being much lower.

But that hasn’t discouraged weapons producers, who hope that the next decade will see a huge boost for the sector.

“Even though the [z∏.139 billion] figure is an estimate, it gives companies some point of reference. There is a plan and these funds will be allocated. ...

Companies can plan their investments accordingly, invest in R&D, knowing that the money is out there,” said Mr Ku∏akowski.

Jacek Ciesnowski

Ghelamco has received a loan of nearly z∏.1 billion for its Warsaw Spire project

Eko-Park will build a residential estate at the popular Zegrze Lake outside of Warsaw

16

15

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

Miasteczko Orange office complex delivered Bouygues Immobilier Polska has completed construction on its builtto-suit office complex Miasteczko Orange, comprising five buildings, six storeys each, with a total GLA of 45,000 sqm.

The development, owned

by Qatar Holding, is located on Al. Jerozolimskie 160 in Warsaw’s Ochota district.

The entire complex has been pre-leased to Orange Polska since 2009 and will become the company’s headquarters, housing 3,300 of the telecom’s employees. Construction on the scheme was launched in 2011. ●

In this issue Developers issue shares . . . . .14 Modlin Fortress sold . . . . . . . . .14 Lake House Zegrze . . . . . . . . . .15 Moko and Tamka . . . . . . . . . . . .15 Warsaw spire loan . . . . . . . . . . .16 Bankruptcies . . . . . . . . . . . . . . .16

Developers in dire need of cash Struggling firms are looking to alternative methods of raising funds as debt piles up and sales disappoint Amidst poor apartment sales and deteriorating financial results, some Warsaw Stock Exchange developers are looking at less traditional methods of obtaining much-needed financing.

Gant Development appears to be in a particularly dire situation. In early August it postponed the redemption of its bonds – worth some z∏.29 million – for the fourth time. The bonds matured on July 19, but the current date for redemption is set for September 30.

The company wants to dig its way out of the hole with another issue, this time of consolidated bonds worth z∏.195 million which are to replace all the company’s debentures. Gant sold just 168 apartments in the first half of 2013 and still has some 200 units in its portfolio.

More successful developers sold hundreds of apartments in H1 this year.

In 2012 the company

recorded consolidated revenues of z∏.403 million and a net loss of z∏.412 million. The poor sales results combined with rising debts have brought Gant’s share price down by some 60 percent since the beginning of the year. Could this mean the company is ripe for a takeover?

Bartosz Turek, an analyst at Lion’s Bank, believes the takeover of entire companies is rather unlikely, since the process is highly complicated and requires huge sums of money. Currently, he said, there aren’t many developers who could take on such an investment. What he considers a more probable scenario is that “specific projects, either at the planning stage or currently under construction, might be sold to stronger companies in order to improve the developers’ financial standing,” he said.

More creative Other developers are looking for more creative ways to resolve their difficulties. LC Corp, for instance, wants to improve its financial standing by expanding its portfolio. It has signed a letter of intent to

Polnord is one of several developers whose sales have disappointed so far this year In order to finance the transaction, LC Corp must first raise capital through a rights issue. It is planning to obtain z∏.270 million this way, z∏.34 million of which will be used to purchase RB Finance Expert and the remaining z∏.236 million to pay off the investment loan.

purchase 100 percent of shares in a firm called RB Finance Expert, which currently conducts no activities and holds no significant debts or assets.

Before the deal takes place however, RB Finance Expert first has to acquire the office and retail portion of the mixeduse LC Corp Sky Tower. The building is located in Wroc∏aw and comprises 18,600 sqm of office space and 29,800 sqm of retail space. RB Finance Expert is also to take over a long-term investment loan which was used to finance the construction of the scheme.

Grasping at straws For some developers a share issue seems to be the only way out of the debt trap. Gdyniabased Polnord is preparing to raise capital through an issue of seven million shares at a

price of z∏.2 each. The company’s extraordinary general shareholders meeting will vote on the proposed issue on August 23.

Polnord has seen its share price drop by 20 percent in early August from z∏.7.20 to z∏.5.70, after the news of the potential issue first broke.

However, its share price managed to rebound in the past two weeks, and is currently at around z∏.6.68.

Polnord has been struggling for some time now, and has sought various ways of repairing its financial standing.

Despite aggressive marketing tactics, such as promising iPads to the first clients who buy an apartment in a new phase of its development, Polnord sold only 244 apartments in the first half of 2013, 108 of which were bought in the second quarter.

The developer has also been pursuing legal action against Warsaw’s city authorities since 2009, after the city designated 16 hectares of Polnord’s land for public roads.

The company is seeking z∏.322 million in damages.

Beata Socha

Mixed use

Modlin Fortress sold Developer Konkret has bought the 19thcentury fortress near Warsaw for just z∏.35.7 million After eight unsuccessful tenders, Poland’s Military Property Agency has managed to sell the 58-hectare Modlin Fortress complex in Nowy Dwór Mazowiecki to the Poznaƒ-based developer Konkret, the owner of the Galeria Handlowa Panorama shopping center and the City Park Hotel & Residence project,

both in Poznaƒ.

The new owner hasn’t revealed its plans concerning the complex, although the curator of historic buildings has allowed for the adaptation of the existing buildings for new commercial and residential uses. In order to build loft apartments within the facility, the new owner will also need a decision changing the existing zoning plan from the local authorities of Nowy Dwór Mazowiecki. The town’s mayor confirmed that Konkret has already filed an application to that effect.

The Military Property Agency had been trying to sell the fortress since December 2008, when the bid price stood at z∏.220 million. But because the agency couldn’t find a buyer, the price of the property was lowered in subsequent tenders. Ultimately, Konkret bought the fortress for z∏.35.7 million, but due to Polish law on historic buildings, the firm will be able to pay only half that if it spends the remainder on upgrading the facility.

Located at the confluence of the Vistula, Wkra and Narew rivers, the complex was

COURTESY OF THE MILITARY PROPERTY AGENCY

Industrial property developer Panattoni will build the first factory in Poland for Polaris Industries, an American manufacturer of snowmobiles, ATVs and quads. The facility, comprising 33,000 sqm, will be erected on ul.

Wspólna in Opole, within the Wa∏brzych Special Economic Zone InvestPark. The production hall will take up 25,600 sqm, the warehouse 3,400 sqm, while the offices and social areas 3,981 sqm.

Construction work has already been launched and is scheduled for completion in midFebruary 2014.

Companies

BEATA SOCHA/WBJ

Panattoni to build factory for Polaris

AUG 19 – SEP 1, 2013, LI 18/32-33

The Modlin Fortress complex includes the longest building in Europe built in the early 19th century and served as a military fortification in Napoleonic times.

The 2.3-kilometer facility is considered to be in one of the most attractive locations for a post-military property in

Poland. It also comprises the longest building in Europe.

It is situated 50 km north of the center of Warsaw, near Lake Zegrzyƒskie, and just 5 km from Modlin Airport.

Karolina Kowalska

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

AUGUST 19 – SEPTEMBER 1, 2013

LOKALE IMMOBILIA – REAL ESTATE

Residential

Eko-Park to build luxury lake-house project Developer Eko-Park is planning to launch construction on its Lake House Zegrze investment on ul. P∏k Kazimierza Drewnowskiego in Zegrze, 30 km north of Warsaw, at the end of the year. The complex, which will sit on the embankment just a few meters from the lake, will comprise two four-storey buildings with a swimming pool and a marina.

Eko-Park says it expects Zegrze to become a top residential and summer location for Warsaw residents.

All 58 apartments, ranging from 40 sqm to 149 sqm, will have large terraces, ranging from 9.8 sqm to 38 sqm, and will offer a view of the lake.

Twelve of the housing units will have their own roof terraces or large gardens. The average price will be z∏.8,350 per sqm, and construction is scheduled for completion in Q2 2015. The scheme was designed by the Open Architekci studio.

Lake House Zegrze will be the first of Eko-Park’s Lifestyle & Leisure projects,

COURTESY OF EKO-PARK

The developer says it will bring the first luxury residential estate to Zegrze Lake

The development will comprise 50 apartments ational centers, the Zegrzyƒskie Lake has become the favorite weekend destination for many Varsovians. Lake House Zegrze is a perfect place for those who want to live in a quiet place while keeping all the advantages of living in the capital city,” Mr Zajàczkowski added.

which combine residential and recreational functions.

“It is a universal project, a perfect investment, since it can be treated as a permanent residence as well as a summer or weekend home,” said Jan Zajàczkowski, president of Eko-Park. “Because of its proximity to Warsaw, easy access and many recre-

Founded in 1996 for the purpose of developing an eponymous project in Warsaw, Eko-Park is known for its upscale residential estates in the Mokotów district of the Polish capital, such as Grazioso Apartamenty, which is currently under construction.

Karolina Kowalska

Residential

COURTESY OF RONSON

COURTESY OF RONSON

Moko and Tamka to be launched this fall

Ronson’s Moko investment

Construction on Ronson’s two residential estates in Warsaw will commence in Q4 2013 Warsaw Stock Exchange-listed developer Ronson Development will launch construction and sales of two residential estates in Q4 2013. The first investment, called Moko, is located on ul. Magazynowa near the Galeria Mokotów shopping center in the

The Tamka development Mokotów business district. Its first phase will comprise two seven-storey buildings, while the second investment, Tamka, situated on the eponymous street in the center of Warsaw, will consist of one seven-storey building. Both investments will offer two-storey underground garages.

The upscale Tamka project will deliver 66 apartments ranging from 50 to 121 sqm, consisting of two to five bedrooms. Designed by the SWECO architectural studio,

it will be located at the intersection of ul. Tamka and ul.

Kruczkowskiego in the capital’s PowiÊle district. Its residents will have easy access to the shopping street ul. Nowy Âwiat and the nearby PowiÊle subway station, part of the second subway line, which is currently under construction.

The first phase of the Moko project will deliver 191 housing units ranging from 30 sqm to 120 sqm, and will offer units consisting of apartments with between one and five

bedrooms. Designed by the JEMS Architekci studio and comprising 11,000 sqm of residential space, Moko will also include a two-storey underground parking lot. When fully delivered, the Moko estate will comprise four buildings.

The investor is yet to select a general contractor for the developments. In H1 2013 Ronson sold a total of 295 apartments and aims to commercialize a total of 500 apartments this year.

KEK

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LOKALE IMMOBILIA – REAL ESTATE

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AUGUST 19 – SEPTEMBER 1, 2013

Office

Companies

Record loan for Ghelamco

Bankruptcies shake construction market

Ghelamco, the general contractor for the Warsaw Spire office complex, has obtained financing of almost z∏.904 million for the scheme’s construction, which is situated in Warsaw’s Wola district. Loans were granted by four banks: Pekao, BZ WBK, PKO BP and BRE Bank.

The value of the financing is a record high in the Polish real estate market, Ghelamco said. The company launched construction of Warsaw Spire in 2011 and had continued so far without taking out any loans.

“We are proud to have been granted financing for our investment, especially in regard to the current macroeconomic climate, which had a great impact on banks’ commercial investment loan policy,” said Jeroen van der Toolen, managing director for CEE at Ghelamco.

The 220-meter, 49-storey development is located on a plot bordered by ul. Grzy-

]COURTESY OF GHELAMCO

Ghelamco has secured z∏.904 million in financing for its Warsaw Spire development

The entire Warsaw Spire scheme is expected to be complete in 2015 bowska, ul ¸ucka, ul.

Towarowa and ul. Wronia and will consist of two smaller 55-

meter buildings and a 220meter tower. Building B, one of the smaller ones, is current-

ly under construction and the newly acquired financing will go towards the development of the two subsequent schemes.

When completed, the classA office complex will offer 100,000 sqm of GLA and will be the biggest in the Polish capital. Recently, Ghelamco has redesigned the main square to make it a publicly accessible area with green spaces and jet-fountains. The 4,000-sqm area will also allow for unencumbered passage for commuters to the subway second line station which is scheduled for completion in Q3 2014.

Two lower schemes of the project, building B and building C, are to be delivered next year, while the tower – building A – is scheduled for completion in 2015. The whole project is valued at approximately z∏.1 billion.

Ghelamco has secured the first tenant for the complex – the European Union agency Frontex, which is to move to the development in September 2014. Ghelamco says it is in talks with potential tenants for the office space in building B. Karolina Kowalska

Another 33 firms went belly-up in July As many as 33 construction companies went bankrupt in July, which accounts for a third of all the bankruptcies declared that month, according to Euler Hermes Collections, a debt management company. “The number is the highest since October of last year, which is alarming, because back then the annual construction cycle was coming to an end, and last month was the cycle’s peak,” the company wrote in a statement.

The high number of bankruptcies in the construction market has made investors uneasy about which companies will follow over the edge, particularly since even some of the biggest companies in the market are currently struggling to stay afloat.

On August 12, a petition was filed by a Poznaƒ-based producer of fire prevention systems, Emtech, which seeks to have Polimex-Mostostal declered bankrupt. The petition was the third such filing against the Warsaw-based construction company in recent months.

Polimex points out that it is negotiating payment schedules

with its creditors. On August 8, it sold one of its assets, anticorrosives firm Ocynkownia D´bica, for z∏.18.31 million.

Polimex-Mostostal is one of the biggest players in Poland’s construction market, It recorded z∏.523.6 million in revenues in the first quarter of 2013 and suffered a z∏.23.5 million net loss. The company’s share price has been on a steady decline for years, and has already lost 70 percent this year alone, from z∏.0.62 to z∏.0.17 on August 16.

Another construction capital group, PBG, is currently undergoing involuntary reorganization and is negotiating the payment of its liabilities. The supervisory board is scheduled to approve payment schedules and drafts of the agreements with the company’s creditors on August 19.

Prime Minister Donald Tusk’s assurances in early June that the group’s subsidiary, Rafako, would be involved in the construction of a planned extension of the Opole power plant brought a short-lived rebound to PBG’s share price, pushing it up to nearly z∏.7 in mid-June. However, the shares soon resumed their slide, and had dropped by over 50 percent, to z∏.3.07 by Beata Socha August 16.

18

THE LIST

www.wbj.pl

AUGUST 19 – SEPTEMBER 1, 2013

Education

MBA Programs Ranked by number of graduates in 2011/2012

Rank

A guide to Polish business and industry

www.bookoflists.pl

Przewodnik po polskim biznesie i gospodarce

Institution name Address Tel./Fax E-mail Web page

Program name

Accreditation / Foreign partner

Program Number Number of Number Number of duration of Polish of foreign lecturers Language /of graduates students students program

Program tuition

2011/2012 / 2010/2011 / 2009/2010

1

Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 22 519-2100/22 519-2308 antetam@kozminski.edu.pl www.kozminski.edu.pl

Number of Polish International programs in lecturers / which the school takes part / Number of Foreign academy issuing foreign MBA lecturers / Year program was launched

Program director

Koêminski MBA with specialized semester

EQUIS; FORUM; AMBA; AACSB; CEEMAN; ISO 9001:2009 NA

130 122 120

279 270 271

2 2 -

34 31 29

4 semesters Polish

WND

WND NA

WND WND 1997

Witol Bielecki

2

Instytut Nauk Ekonomicznych Polskiej Akademii Nauk ul. Nowy Âwiat 72, 00-330 Warsaw 22 656-6431/22 656-6431 mba@inepan.waw.pl www.inepan.waw.pl

Executive MBA

WND

120 110 50

120 110 50

-

26 24 15

2 semesters Polish

WND

WND

26 2 2008

Pawe∏ Koz∏owski

3

Wy˝sza Szko∏a Zarzàdzania / Polish Open University ul. Domaniewska 37A, 02-672 Warsaw 22 843-7692/22 853-3845 info@pou.pl www.pou.pl

Executive MBA

Association of MBAs; Oxford Brookes University; London Chamber of Commerce; Industry English for Business Oxford Brookes University (UK)

100 168 205

207 203 239

WND WND WND

WND 70 67

4 semesters Polish; English

z∏.31,000

Erasmus; Socrates Oxford Brookes University (UK)

WND WND 1997

Justyna Berniak-Woêny

4

Wy˝sza Szko∏a Bankowa we Wroc∏awiu ul. Fabryczna 29-31, 53-609 Wroc∏aw 71 367-2375/71 367-2392 mba@wsb.wroclaw.pl www.franklinmba.pl

MBA

Medal Europejski Franklin University (US)

93 145 36

125 239 181

-

40 51 30

4 semesters Polish

z∏.23,000

Franklin University MBA (US); Erasmus; Project Business Week (Germany, Ukraine, Denmark, Czech Republic, Netherlands, Portugal, Belgium) Franklin University (US)

38 2 2008

Jacek Unold

65 70 27

65 70 27

-

37 36 36

5 semesters Polish; English

z∏.24,000

Socrates; Erasmus; Leonardo da Vinci, Interreg IIIB; 6th Framework Programme (LAMA project); European Social Fund (Education for Enterpreunership) NA

32 5 1998

Dariusz Zarzecki

5

Uniwersytet Szczeciƒski ul. Mickiewicza 64, 71-101 Szczecin 91 444-2125/91 444-1953 mba@univ.szczecin.pl mba.univ.szczecin.pl

Podyplomowe Studium MBA Uniwersytetu Szczeciƒskiego

NA Manchester Metropolitan University (UK); Leeds Metropolitan University (UK); Cranfield University School of Management (UK); Gloucestershire Business School (UK); St. John Fisher College, Rochester (US); University of ¸ódê; University of Economics in Katowice; Wroc∏aw University of Technology; Koszalin University of Technology

6

Wy˝sza Szko∏a Biznesu National Louis University ul. Zielona 27, 33-300 Nowy Sàcz 18 449-9102/18 449-9121 mba@wsb-nlu.edu.pl www.mba.wsb-nlu.edu.pl

MBA National Louis University

NCA; IACBE National Louis University (US)

59 39 16

58 45 17

2 -

10 10 10

4 semesters English

z∏.24,500 + z∏.600 registration fee + $2,500 certificate

Socrates; Erasmus; Cisco Academy; Microsoft IT Academy National Louis University (US)

7 3 2000

Krzysztof G∏uc

7

Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 22 519-2248/22 519-2308 malgosiao@kozminski.edu.pl www.kozminski.edu.pl

Executive MBA

EQUIS; FORUM; AMBA; AACSB; CEEMAN; ISO 9001:2009 NA

58 76 73

138 134 133

7 1 1

60 55 30

4 semesters Polish; English

WND

WND NA

WND WND 1989

Witold Bielecki

8

Gdaƒska Fundacja Kszta∏cenia Mened˝erów / Business Centre Club Al. Grunwaldzka 472, 80-309 Gdaƒsk 58 558-5858/58 557-2733 mba@gfkm.pl www.gfkm.pl

MBA with support from Business Centre Club

International Quality Accreditation CEEMAN (Slovenia); FORUM RSM Erasmus University (Netherlands)

54 37 34

92 115 93

-

29 26 25

4 semesters Polish; English

z∏.46,800 + 23% VAT

OneMBA - RSM Erasmus University (Netherlands); Kaliningrad MBA - IAE Aix-en-Provence (France); KGTU (Russia) RSM Erasmus University (Netherlands)

20 9 1991

Adam Ubertowski

9

Szko∏a Biznesu Politechniki Warszawskiej ul. Koszykowa 79, 02-008 Warsaw 22 234-7089/22 234-7016 mba@biznes.edu.pl www.biznes.edu.pl

EPAS HEC School of Management (France); Executive MBA London Business School (UK); NHH Norwegian School of Economics (Norway)

43 50 64

122 101 125

10 4 5

45 56 42

4 semesters English

€14,300

WND NA

29 16 1996

Witold Or∏owski

10

Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 22 519-2199/22 519-2308 sylwiah@kozminski.edu.pl www.kozminski.edu.pl

Executive MBA in Minsk

EQUIS; AMBA; AACSB; CEEMAN Institute of Privatization and Management in Minsk

35 48 48

-

70 63 78

30 27 22

4 semesters Russian

WND

WND Institute for Privatization and Management in Minsk

WND WND 2001

Pawel Golanchenko; Witold Bielecki

11

Gdaƒska Fundacja Kszta∏cenia Mened˝erów / Business Centre Club Al. Grunwaldzka 472, 80-309 Gdaƒsk 58 558-5858/58 557-2733 mba@gfkm.pl www.gfkm.pl

International GFKM MBA

International Quality Accreditation CEEMAN (Slovenia); FORUM; SEM FORUM RSM Erasmus University (Netherlands)

32 37 34

61 17 72

1 1

32 29 29

4 semesters Polish; English

z∏.37,600 + 23% VAT

OneMBA; RSM Erasmus University (Netherlands); Kaliningrad MBA - IAE Aix-en-Provence (France); KGTU (Russia) RSM Erasmus University (Netherlands)

23 9 1991

Adam Ubertowski

11

Wy˝sza Szko∏a Bankowa w Poznaniu Al. Niepodleg∏oÊci 2, 61-874 Poznaƒ 61 655-3357/61 655-3253 emba@emba.poznan.pl www.wsb.poznan.pl

Association of MBAs; EQUIS; AACSB Executive MBA Aalto University School of Business (Finland)

32 21 36

66 71 64

1 1 -

24 24 25

4 semesters Polish; English

z∏.29,500

Erasmus; Socrates; Leonardo da Vinci Aalto University School of Business (Finland)

13 17 2000

Renata Krzyka∏a-Schaefer

13

Uniwersytet Ekonomiczny w Poznaniu Al. Niepodleg∏oÊci 10, 61-875 Poznaƒ 61 854-3868/61 856-9415 mba@ue.poznan.pl www.uemba.ue.poznan.pl

MBA PoznaƒAtlanta

AMBA Georgia State University (US)

31 33 30

53 55 58

-

34 32 33

4 semesters Polish; English

z∏.36,000

NA Georgia State University (US)

28 10 1995

Barbara Jankowska

14

Uniwersytet Miko∏aja Kopernika w Toruniu ul. Gagarina 13A, 87-100 Toruƒ 56 611-4892/56 611-4892 mba.efs@umk.pl www.mba.umk.pl

Executive MBA

NCA; ACBSP Brennan School of Business Dominican University (US)

30 60

30 30 90

-

30 30 30

4 semesters Polish; English

z∏.39,600

Socrates; Erasmus; Comenius; Lingua; Grundtvig; Minerva; Erasmus Mundus; Leonardo da Vinci; CEEPUS; TEMPUS Brennan School of Business Dominican University (US)

15 15 2000

Robert Karaszewski

15

Uniwersytet ¸ódêki; Polsko-Amerykaƒskie Centrum Zarzàdzania (PAM Center) ul. Matejki 22/26, 90-237 ¸ódê 42 635-4958/42 635-4959 mba@uni.lodz.pl www.pam.uni.lodz.pl

PolishAmerican Executive MBA Program

NA R.H. Smith School of Business, University of Maryland (US)

28 13 26

47 42 39

1 2

14 13 15

4 trymesters Polish; English

z∏ 35,000

Erasmus; Campus Europae; Leonardo da Vinci; CEEPUS; DAAD; COST; LIFE+; INTERREG IVC; TEMPUS R.H. Smith School of Business, University of Maryland (US)

17 4 1996

Jan Je˝ak

THE LIST

Rank

AUGUST 19 – SEPTEMBER 1, 2013

Institution name Address Tel./Fax E-mail Web page

Program name

Accreditation / Foreign partner

Program Number Number of Number Number of duration of Polish of foreign lecturers Language /of graduates students students program

www.wbj.pl

Program tuition

2011/2012 / 2010/2011 / 2009/2010

Number of Polish lecturers / International programs in which the school takes part / Number of foreign Foreign academy issuing lecturers / MBA Year program was launched

Program director

Zachodniopomorska Szko∏a Biznesu ul. ˚o∏nierska 53, 71-210 Szczecin 16 91 814-9481/91 814-9493 mba@zpsb.szczecin.pl www.zpsb.szczecin.pl

Executive MBA

FORUM; KSU accreditation Leeds University Business School (UK); Abertay University Dundee (UK)

27 56 30

80 109 28

2

48 42 30

4 semesters Polish

z∏.22,000

Baltic Sea Region 2007-2013; Leonardo da Vinci NA

39 9 1998

Justyna Osuch

Mi´dzynarodowe Centrum Zarzàdzania; Wydzia∏ Zarzàdzania; Uniwersytet Warszawski 17 ul. Nowy Âwiat 4, 00-497 Warsaw 22 625-3283/22 625-3283 mba@uw.edu.pl www.mba.uw.edu.pl

Warsaw-Illinois Executive MBA

AACSB; AMBA College of Business, University of Illinois at Urbana-Champaign (US)

25 25 19

20 20 15

5 5 3

18 18 18

3 semesters English

$24,570

WND University of Illinois at UrbanaChampaign (US)

8 10 19991

WND

Franklin University MBA

IACBE; HLC Franklin University (US)

25 27 -

47 55 27

1 -

14 14 10

4 semesters English

z∏.34,500

Franklin University MBA (US); Erasmus; Project Business Week (Germany, Ukraine, Denmark, Czech Republic, Netherlands, Portugal, Belgium) Franklin University (US)

NA 14 2009

Jacek Unold

Wy˝sza Szko∏a Bankowa we Wroc∏awiu ul. Fabryczna 29-31, 53-609 Wroc∏aw 17 71 376-2375/71 376-2392 mba@wsb.wroclaw.pl www.franklimba.pl

19

Krakowska Szko∏a Biznesu Uniwersytetu Ekonomicznego w Krakowie / Cracow School of Business 19 ul. Rakowicka 27, 31-510 Kraków 12 293-5525/12 293-5868 ksb@uek.krakow.pl www.ksb.uek.krakow.pl

FORUM Stockholm University School of Business (Sweden); Graduate School Executive MBA of Management, Groupe ESC Marketing and Clermont-Ferrand (France); St. Gallen Management Business School (Switzerland); Grand Valley State University (US); Sawyer Business School, Suffolk University (US)

23 33 35

76 86 89

1 1 -

41 44 41

5 semesters Polish; English

€8,950 + €150 registration fee

International MBA Alumni Congress; EFMD; EMBS; NIBES; ESSAM Stockholm University School of Business (Sweden)

38 7 1994

Piotr Bu∏a

Polsko-Amerykaƒska Szko∏a Biznesu w Krakowie / Institute of Business Studies in Kraków 20 Al. Jana Paw∏a II, 31-864 Kraków 12 374-3250/12 374-3202 m6@mech.pk.edu.pl www.pk.edu.pl/~biznes

Executive MBA

NA Central Connecticut State University (US)

22 30 22

21 30 22

1 -

20 19 19

2 semesters Polish

z∏.7,200

WND Central Connecticut State University (US)

19 1 1995

Jolanta Szadkowska

Wydzia∏ Informatyki i Zarzàdzania, Politechnika Wroc∏awska ul. Wybrze˝e Wyspiaƒskiego, 50-370 Wroc∏aw 21 71 320-2134 szkola.biznesu@pwr.wroc.pl www.ioz.pwr.wroc.pl/podyplomowe/polambs/

Executive MBA

NA Central Connecticut State University (US)

17 31 22

17 37 27

-

22 21 21

2 semesters Polish; English

z∏.10,000

NA Central Connecticut State University (US)

21 1 1991

Zofia Krokosz-Krynke

Krakowska Szko∏a Biznesu Uniwersytetu Ekonomicznego w Krakowie / Cracow School of Business 22 ul. Rakowicka 27, 31-510 Kraków 12 293-5568/12 293-5868 imba@uek.krakow.pl www.ksb.uek.krakow.pl

International MBA - European Multicultural Integrated Management Program

FORUM Stockholm University School of Business (Sweden); Graduate School of Management, Groupe ESC Clermont-Ferrand (France); St. Gallen Business School (Switzerland); Grand Valley State University (US); Sawyer Business School, Suffolk University (US)

16 16 27

29 27 42

9 5 5

22 18 14

4 semesters English

€11,900 + €150 registration fee

International MBA Alumni Congress; EFMD; EMBS; NIBES; ESSAM St. Gallen Business School (Switzerland)

15 9 2006

Piotr Bu∏a

MBA

Certification de Services QUALICERT 4474 Management Institute, University Rennes1 (France)

13 14 20

12 19 24

2 4

19 20 19

2 semesters Polish; French

z∏.7,900

Erasmus University Rennes1 (France)

12 7 1994

Beata Woêniak-J´chorek

Executive MBA Praktycy dla praktyków

WND

13 16 14

13 16 14

-

20 20 20

2 semesters Polish

z∏.24,000 + 23% VAT

WND

20 1 1992

Zuzanna Broszczak

MBA

NEASC Clark University (US)

12 14 5

12 9 4

10 10 1

15 16 15

4 semesters English

z∏.21,650

TEMPUS; Lifelong Learning Programme; EU Culture Programme NA

11 4 2008

¸ukasz Prysiƒski

MBA in English

WND

9 -

-

9 -

6 -

2 semesters English

WND

WND

12 6 2012

Pawe∏ Koz∏owski

MBA

NA University of Northampton (UK)

-

60 -

-

28 -

4 semesters Polish

z∏.24,500

WND University of Northampton (UK)

28 2 2011

Izabela Bednarska

Wy˝sza Szko∏a Bankowa Wydzia∏ Zamiejscowy w Chorzowie ul. Sportowa 29, 41-506 Chorzów NR 32 349-8477/32 349-8477 emba@chorzow.wsb.pl www.wsb.pl/chorzow/kandydaci/studia-mba

Executive MBA

NA Coventry University (UK)

-

59 -

1 -

17 -

4 semesters Polish; English

WND

MBA Management in International Business Coventry University (UK)

13 4 2011

Krzysztof Koj

Wy˝sza Szko∏a Bankowa Wydzia∏ Zamiejscowy w Chorzowie ul. Sportowa 29, 41-506 Chorzów NR 32 349-8477 emba@chorzow.wsb.pl www.wsb.pl/chorzow/kandydaci/studia-mba

MBA Management in International Business

NA Franklin University (US)

-

65 -

1 -

15 -

4 semesters Polish

z∏.19,850

Coventry University MBA Franklin University (US)

15 NA 2012

Krzysztof Koj

MBA

NA HHL - Leipzig Graduate School of Management (Germany)

-

11 -

7 -

25 -

4 semesters English

z∏.30,000

Erasmus; TOPSIM International Management Strategic Game HHL - Leipzig Graduate School of Management (Germany)

13 12 2011

Aneta Szymaƒska

Executive MBA in IT

KSU accreditation Leeds University Business School (UK); Abertay University Dundee (UK)

30 -

27 30 -

-

46 37 -

4 semesters Polish

z∏.22,000

Baltic Sea Region 2007-2013; Leonardo da Vinci; Erasmus NA

41 5 2008

Justyna Osuch

Centrum Francusko-Polskich Studiów w Zakresie Zarzàdzania - UE w Poznaniu ul. Powstaƒców Wielkopolskich 16, 61-895 Poznaƒ 23 61 854-3716/61 854-3716 cfp@ue.poznan.pl www.cfp.ue.poznan.pl Francuski Instytut Zarzàdzania ul. Wierzbowa 9/11, 00-094 Warsaw 23 22 282-77640 mba@mba.edu.pl www.mba.edu.pl Spo∏eczna Akademia Nauk ul. Gdaƒska 121, 90-519 ¸ódê 25 42 664-2255/42 664-2253 info@clarkuni.eu www.clrkuniversity.eu Instytut Nauk Ekonomicznych Polskiej Akademii Nauk ul. Nowy Âwiat 72, 00-330 Warsaw 26 22 656-6431/22 656-6431 studiesinenglish@inepan.waw.pl www.inepan.waw.pl Wy˝sza Szko∏a Bankowa w Gdaƒsku ul. Dolna Brama 8, 80-821 Gdaƒsk NR 58 321-7210/58 321-7211 mba@wsb.gda.pl www.wsb.gda.pl

Wy˝sza Szko∏a Handlowa we Wroc∏awiu ul. Ostrowskiego 22, 53-238 Wroc∏aw NR 71 333-1111/71 333-1152 mba@handlowa.eu www.handlowa.eu Zachodniopomorska Szko∏a Biznesu ul. ˚o∏nierska 53, 71-210 Szczecin NR 91 814-9481/91 814-9493 mba@zpsb.szczecin.pl www.zpsb.szczecin.pl

Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was conducted in February 2013. Number of lecturers is as of February 2013. Institutions not responding to our survey are not listed.

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Monika Brysiak, ul. Elblàska 15/17, 01-747 Warsaw, via fax to +48 22 257-7500, or via e-mail to online@bookoflists.pl. Copyright 2013, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

20

MARKETS

www.wbj.pl

AUGUST 19 – SEPTEMBER 1, 2013

Stocks report

world stock indices DJIA

NASDAQ

15,112.19 (Aug 15 close)

S&P500

3,606.12 (Aug 15 close)

-2.49% (for the week)

FTSE100

1,661.32 (Aug 15 close)

-1.72% (for the week)

DAX

6,499.99 (Aug 16 close)

-2.13% (for the week)

-1.27% (for the week)

Fortnight of the bulls

NIKKEI 8,391.94 (Aug 16 close)

13,650.11 (Aug 16 close)

0.64% (for the week)

0.26% (for the week)

CHANGE: 12.67% (year to Aug 15)

CHANGE: 15.87% (year to Aug 15)

CHANGE: 13.60% (year to Aug 15)

CHANGE: 7.84% (year to Aug 16)

CHANGE: 7.88% (year to Aug 16)

CHANGE: 27.71% (year to Aug 16)

52-week high: 15,658.43

52-week high: 3,694.19

52-week high: 1,709.67

52-week high: 6,875.60

52-week high: 8,553.74

52-week high: 15,942.60

52-week low: 12,471.49

52-week low: 2,810.80

52-week low: 1,343.35

52-week low: 5,605.60

52-week low: 6,871.00

52-week low: 8,488.14

The first two weeks of August were good ones for the Warsaw Stock Exchange. Its main index, the WIG, reached levels not seen since 2011, surpassing the threshold of 50,000 points. With recent macroeconomic data pointing towards a rebound, the spirits on the WSE are high, and indices are well in the black.

Most trading days over the two-week period saw gains.

Most banks reported positive Q2 results in recent days and their shares have surged. Citi Handlowy and Pekao gained nearly 10 and 8 percent respectively. BZ WBK shares rose by 4 percent over the period, and have jumped by some 45 percent this year alone. Another blue-chip index company that saw a significant gain was miner JSW, whose share price increased by over 10 percent over the fortnight.

On the other side of the spectrum were Ukrainian agricultural firm Kernel and

Major indices WIG

49,976.48 (August 16 close)

WIG20

2,445.60 (August 16 close)

Change for the week: 1.73%

52-week high: 50,223.95

Change for the week: 1.30%

52-week high: 2,628.36

Change year to August 16: 3.88%

52-week low: 41,077.44

Change year to August 16: -6.88%

52-week low: 2,177.02

51,000

2,500

49,600

2,440

48,200

2,380

46,800

2,320 2,260

45,400

2,200

19 .0 22 7 .0 23 7 .0 24 7 .0 25 7 .0 26 7 .0 29 7 .0 30 7 .0 31 7 .0 01 7 .0 02 8 .0 05 8 .0 06 8 .0 07 8 .0 08 8 .0 09 8 .0 12 8 .0 13 8 .0 14 8 .0 16 8 .0 8

19 .0 22 7 .0 23 7 .0 24 7 .0 25 7 .0 26 7 .0 29 7 .0 30 7 .0 31 7 .0 01 7 .0 02 8 .0 05 8 .0 06 8 .0 07 8 .0 08 8 .0 09 8 .0 12 8 .0 13 8 .0 14 8 .0 16 8 .0 8

44,000

Top 5 FEERUM NEWWORLDR ALTERCO IMPEXMET GLOBALNRG

Closing 16.99 4.16 1.54 3.08 1.06

% change (week) 52-week high 42.18 16.99 39.13 17.28 24.19 4.38 16.67 3.95 16.48 2.16

52-week low 8.40 2.66 0.61 1.82 0.55

Top 5 JSW HANDLOWY BRE SYNTHOS BOGDANKA

Closing 72.81 118.00 464.00 4.58 109.40

% change (week) 8.75 7.27 5.82 5.29 3.80

52-week high 97.13 123.60 475.00 6.00 143.00

52-week low 57.70 72.35 282.79 4.12 97.20

Bottom 5 ENERGOPLD EFH BIOTON FOTA GREMMEDIA

Closing 0.06 0.53 0.03 0.88 2.09

% change (week) -33.33 -28.38 -25.00 -15.38 -12.18

52-week low 0.06 0.34 0.03 0.30 2.02

Bottom 5 KERNEL TPSA GTC KGHM PKNORLEN

Closing 47.90 7.06 8.21 124.00 44.75

% change (week) -6.08 -5.99 -4.53 -1.55 -1.43

52-week high 76.00 16.13 10.25 179.15 55.56

52-week low 45.10 5.83 6.04 106.90 35.54

52-week high 0.49 2.70 0.10 6.79 3.25

Currency report

Z∏oty market ignores positive data

Other indices mWIG40

3,239.52 (August 16 close)

sWIG80

12,933.31 (August 16 close)

Change for the week: 2.39%

52-week high: 3,253.52

Change for the week: 3.27%

Change year to August 16: 26.12%

52-week low: 2,211.09

Change year to August 16: 22.81%

13,000

3,180

12,700

3,060

12,400

2,940

12,100

2,820

11,800

2,700

11,500

19 .0 22 7 .0 23 7 .0 24 7 .0 25 7 .0 26 7 .0 29 7 .0 30 7 .0 31 7 .0 01 7 .0 02 8 .0 05 8 .0 06 8 .0 07 8 .0 08 8 .0 09 8 .0 12 8 .0 13 8 .0 14 8 .0 16 8 .0 8

NewConnect

52-week high: 12,961.14 52-week low: 9,283.99

19 .0 22 7 .0 23 7 .0 24 7 .0 25 7 .0 26 7 .0 29 7 .0 30 7 .0 31 7 .0 01 7 .0 02 8 .0 05 8 .0 06 8 .0 07 8 .0 08 8 .0 09 8 .0 12 8 .0 13 8 .0 14 8 .0 16 8 .0 8

3,300

312.07 (August 16 close)

WIG-Banki

7,689.61 (August 16 close)

52-week high: 353.60

Change for the week: 2.47%

52-week high: 7,754.29

Change year to August 16: -6.06%

52-week low: 296.29

Change year to August 16: 14.37%

52-week low: 5,943.43

7,800

311.2

7,500

307.4

7,200

303.6

6,900

299.8

6,600

296.0

6,300 19 .0 22 7 .0 23 7 .0 24 7 .0 25 7 .0 26 7 .0 29 7 .0 30 7 .0 31 7 .0 01 7 .0 02 8 .0 05 8 .0 06 8 .0 07 8 .0 08 8 .0 09 8 .0 12 8 .0 13 8 .0 14 8 .0 16 8 .0 8

19 .0 22 7 .0 23 7 .0 24 7 .0 25 7 .0 26 7 .0 29 7 .0 30 7 .0 31 7 .0 01 7 .0 02 8 .0 05 8 .0 06 8 .0 07 8 .0 08 8 .0 09 8 .0 12 8 .0 13 8 .0 14 8 .0 16 8 .0 8

315.0

SOURCE: WSE

Change for the week: 1.07%

telecom TP – they lost about 6 and 7 percent respectively.

The positive atmosphere on WSE was not ruined by bad news from other markets.

With the S&P 500 losing 1.4 percent on August 14, many expected the WSE to follow.

Instead, the Warsaw bourse’s main index only shed 0.49 percent and the blue-chip WIG20 lost 0.63 percent.

Analysts expect the upward trend to continue, with the WIG20 breaking the 2,500 threshold soon. It currently sits at 2,445.6 points.

How the markets behave in upcoming weeks will depend heavily on whether economic data indicates the US Federal Reserve could begin tapering its quantitative easing (QE) program soon.

When Fed chairman Ben Bernanke fist suggested QE could be coming to an end in the near future, the Dow Jones Industrial Average lost 4.3 percent over the following few days. Jacek Ciesnowski

Last week saw a lot of macroeconomic data, mostly positive, coming both from Poland and other EU countries as well as the US, but failed to bring any major changes. In fact, most of the news had either been discounted earlier or was on par with market expectations.

The week started off slowly for the dollar, but later saw the US currency get stronger, with EUR/USD falling below the $1.3260 level on Wednesday.

Markets already seem to be discounting the possibility of the Fed reducing its QE policy, which may be announced after its meeting on September 17-18. Towards the end of the week, the euro climbed back against the dollar trading at $1.3340 on Friday.

Poland’s current account balance for June showed a z∏.574-million surplus, well above market expectations.

Wednesday saw the an-

nouncement of a preliminary Polish GDP reading of 0.8 percent y/y, slightly better than expected.

Despite the positive data, the z∏oty continued to depreciate against all major currencies except the Swiss franc, which traded below the z∏.3.4 level on Tuesday and Wednesday. It recovered towards the end of the week though, rising as high as z∏.3.4154 on Friday.

Positive signals coming from the UK labor market, as well as the latest Bank of England minutes, gave the pound a strong impulse. The GBP/PLN pair broke the z∏.4.90 level and traded at.4.9499 on Friday. The EUR/PLN pair, despite z∏oty’s slight depreciation, did not exceed the z∏.4.20 ceiling for most of the week, but finally succumbed and arrived at z∏.4.2230 on Friday.

Beata Socha

currency rates

SOURCE: NBP

3.2195

3.2481

14.08

16.08

3.2179 13.08

3.2582 12.08

09.08

3.2707 08.08

0.0954

0.0960 16.08

3.2

3.2414

100JPY/PLN

3.3

14.08

0.0953 13.08

0.0956 12.08

09.08

08.08

0.0956

3.4154 16.08

3.3810 14.08

0.09

0.0954

RUB/PLN

0.10

3.3942 13.08

3.4036 12.08

3.4055 09.08

3.3

08.08

3.4176

4.9499 16.08

4.8984 14.08

13.08

12.08

09.08

08.08

16.08

4.8

CHF/PLN

3.5

4.8708

4.8798

4.8847

3.1665

3.1643

4.8722

GBP/PLN

5.0

14.08

3.1489 13.08

3.1510 12.08

09.08

3.1503 08.08

4.1994

4.2230 16.08

3.1

3.1336

USD/PLN

3.3

14.08

4.1874 13.08

4.1927 12.08

09.08

4.2045 08.08

4.10

4.1940

EUR/PLN

4.25

AUGUST 19 – SEPTEMBER 1, 2013

SPORTS

Soccer

www.wbj.pl

21

Track and field

Poland has already improved its medal count threefold since the last IAAF World Championships

After a lackluster World Cup campaign, Polish fans were pessimistic before a friendly match against the much higher-ranked Denmark in mid-August. But for once, Polish players proved the skeptics wrong.

The game in Gdaƒsk started with a bang. After just four minutes, Mateusz Klich put the ball in the net from inside the box. It was quite a performance for the young midfielder, as it was only his second time playing for the national team. His first game for Poland was two years ago against Argentina, when he came onto the pitch in the 89th minute and didn’t even touch the ball.

In the game against Denmark, Mr Klich played from the start, got on the score sheet and had an assist with Poland’s third goal.

But while the game started optimistically for the home team, it turned sour quickly.

Shortly after Mr Klich’s goal the Danes took over, scoring two goals in the first half. The first came in the 18th minute,

The times when Polish runners were some of the fastest in the world are long gone. In recent years, with a few exceptions, Polish athletes have also had trouble jumping very high or very far. But they have maintained their skill in one type of event – throwing things a long distance.

The IAAF World Championships in Moscow proved this, with Polish athletes winning their only medals so far in throwing events.

Pawe∏ Fajdek opened the medal haul for Poland, winning the gold in the hammer throw.

For the 24-year-old athlete it constituted the biggest success of his career so far, and the only medal he has earned in senior competition. Mr Fajdek threw the 7.26-kilogram metal ball and cord 81.97 meters, his personal best. The contest proved to be a true passing of the torch, as another Pole, 37-year-old Szymon Zió∏kowski, a former Olympic and world champion, placed ninth in what was probably his last world championship

SHUTTERSTOCK

The 3-2 win gives Polish fans a glimmer of hope for the remainder of the World Cup qualifiers

Polish fans received a much-needed morale boost after the national team’s win against Denmark when Christian Eriksen perfectly executed a free kick, while the second occurred just before the half-time whistle when Martin Braithwaite put his team in the lead.

Luckily for Polish fans, the second half of the game was a different story, with the Polish side in control. The crucial moments came between the 59th and 61st minutes, when the home team scored twice.

The first of these two goals was scored by Waldemar Sobota, who scraped the ball after a pass from Jakub B∏aszczykowski, putting it in the back of the net. The second came from

Piotr Zieliƒski, in a shot that mirrored the first goal of the game.

The win, even in a friendly, has given fans some optimism before the national team’s September World Cup qualifying game against Montenegro, which will be played in Warsaw.

Polish fans used to disappointment after last year’s disastrous European championship tournament and a spell of losses and draws in the World Cup qualifiers, can now hope that there is still a chance Poland could advance to the final tournament in Brazil.

Jacek Ciesnowski

COURTESY OF PIOTR-MALACHOWSKI.PL

Poland beats Denmark in friendly Poland throws for three medals

Piotr Ma∏achowski competition.

Piotr Ma∏achowski earned a silver medal in the discus, with a throw of 68.36 meters. Mr Ma∏achowski was one of the favorites to land the gold, since he recently became the only thrower this year to launch the discus more than 70 meters.

However, he was defeated in Moscow by Germany’s Robert Harding.

Anita W∏odarczyk won a third medal for Poland, receiving the silver in the hammer throw. Ms W∏odarczyk’s best result in the competition was 78.46 meters, just 34 centimeters behind gold-medal winner Tatyana Lysenko. Though it only got her second place, the

throw was impressive – it was the fourth best throw in women’s hammer-throw history, and a Polish national record.

The biggest disappointment so far has been another thrower, Tomasz Majewski. The reigning Olympic shot-put champion threw 20.98 meters.

While this was his best result so far this season, it only placed him sixth.

Fans of Polish track and field will see the three medals as a success, however. Two years ago, at the World Championships in Daegu, South Korea, only Pawe∏ Wojciechowski came back with a medal – a gold in the pole vault.

Jacek Ciesnowski

22

LIFESTYLE

www.wbj.pl

AUGUST 19 – SEPTEMBER 1, 2013

Concert

Exhibition

The whole ‘Wall’

Under our skin The Human Body To October 13 Garnizon Kultury, ul. J. S∏owackiego 3 Gdaƒsk

Roger Waters August 20 National Stadium Warsaw As part of an epic three-year world tour Roger Waters, leader of legendary psychedelic rock band Pink Floyd, will play in Warsaw, where he will perform the band’s iconic album “The Wall” in its entirety.

The concerts in this tour mark the first time since 1990 that audiences have been treated to the entire album played live, along with stunning visual effects and stage performances.

The show has been revamped for the world’s biggest arenas and stadiums.

Previously Mr Waters had refused to regularly perform the entire album live, since he deemed the technology needed to fulfill his vision either non-existent or too expensive.

Realizing that vision has not come cheap. The first part of the tour was estimated at a cost of up to $60 million. That amount has surely increased, as new shows are continuously added, with over 200 shows played worldwide. The Warsaw show will be one of the last few announced so far, with the

current leg of the tour ending on September 21 in Portugal.

Each show consumes 3,000 amps of power and uses some 20 miles of cable; 23 projectors beam high-definition visuals onto a huge screen that is 240 feet wide and 25 feet high.

Mr Waters and accompanying musicians will play every song from the 1979 album, as well as a few more that were not included in the original release but which are in line with the anti-war message of the album.

Jacek Ciesnowski

Ticket prices start at z∏.165

The Human Body exhibition has now been seen by over 20 million people throughout Europe, and is currently on show in two Polish cities this year: Kraków and Gdaƒsk.

This informative and controversial exhibition exhibition lets you look inside real human bodies.

From skin to bones and from head to toe, those who attend can see in detail how human anatomy works.

With exhibits ranging from whole bodies to individual organs, spectators can examine every inch of the human body in great detail.

The exhibition uses carefully dissected real human specimens called “plastinates” to capture the beauty and science of the human body, illustrating the anatomy and physiology of each system, from circulatory to digestive. Every exhibition

SHUTTERSTOCK

Roger Waters

SHUTTERSTOCK

To November 3 Fabryka, ul. Zab∏ocie 23 Kraków

has over 200 full body and individual organs from each system of the body.

The event aims to change perceptions of the human body, and tries to encourage people to respect and take care of their bodies, paying more attention on how they choose to live. The effects of

smoking or obesity can be seen in graphic detail in the organs on display.

The whole experience is accompanied by detailed photographs and 3D visualizations of some of the processes that occur inside the human body.

Jacek Ciesnowski

Ticket prices start at z∏.35

LAST WORD

AUGUST 19 – SEPTEMBER 1, 2013

www.wbj.pl

23

Tech Eye

The beast and the tell-tale bald spot

Jetlag sucks. Trying to finish an article on time while fighting jetlag sucks even more. But you know what sucks worst? Trying to finish an article and fighting jetlag while a cat with a giant bald spot circles your chair, meowing piteously for some lap time.

Techeye just got back from America – “Land of the Corpulent Free and Home of the Diabetic Brave” – and our male quadruped has gone

sphynx-kitty on one side.

Our mother-in-law apparently decided to groom the cat (possibly with her tongue) and things got a bit rough.

The details are vague, but the bald spot is huge and undeniable. It’s haunting yet hilarious, like Edgar Allan Poe’s “The Tell-Tale Heart” would be if Bill Murray was the narrator. And it’s not making it easier to write this article, damn it.

But write we must, so let’s press on and look at the G2, a new contender for the “best Android-based smartphone that’s not made by Samsung” award. This particular contender is from LG Electronics.

The G2 has a 5.2-inch display packing 423 pixels-per-inch, bigger than most Android devices in this weight class but not quite as pixelicious as Samsung’s S4 or HTC’s One. There’s also a 2.26GHz quadcore Snapdragon 800 processor, which is speedier than the competition, and the battery is a smidge larger. But the G2’s “studio quality Hi-

Fi sound” is a puzzling selling point, since no one buys a phone for Hi-Fi sound, and the 13MP rear camera and 2.1MP front camera are simply par for the course. Nothing else is remarkable.

The bottom line is that LG will release a solid smartphone this autumn, but it’s largely a “me-too” affair. And, with Apple expected to announce a new iPhone in the second week of September (5S, anyone?), the G2 won’t be belle of the ball for long.

Apropos of nothing, let’s turn now to the Virtuix Omni, an omnidirectional treadmill described by its eponymous maker as “the first virtual reality interface for moving freely and naturally in your favorite game.”

Note that the Virtuix Omni is meant to be paired with the in-development Oculus Rift, a promising virtual reality headset, to give customers an immersive VR experience. According to Virtuix CEO Jan Goetgeluk, “Gaming on a keyboard, mouse or gamepad while seated pales in comparison to the intense experience and fun that comes from actually walking, running and jumping in games.”

Techeye isn’t convinced – “walk-

ing, running and jumping in games” sounds suspiciously like exercise, and it will certainly complicate the simultaneous consumption of beer and pizza. But we’re going to withhold judgment for now.

The Virtuix Omni ain’t cheap.

You can pre-order one for $499, or spend $1,019 for the “Duel Package” which lets you engage in multiplayer action walking, running and jumping, all in the comfort of your own home – provided your home can hold two large tread-

mills. Shipping will also set you back a few tens of thousands of pennies (shipping to Poland is estimated at $250-$300).

Still, we’re seriously thinking about getting the “Duel Package” Virtuix Omni. That way Techeye could play VR games whenever our depilated companion comes around, saving us from the terrible hilarity of that bald spot. And our mother-in-law could virtually groom whatever she wants without inflicting harm. ●

COURTESY OF VIRTUIX

COURTESY OF LG ELECTRONICS

The G2

The Virtuix Omni

Ever been haunted by an absence of animal hair? Let us know: techeye.wbj@gmail.com

To advertise in WBJ’s classifieds section, contact Agnieszka Brejwo, at (+48) 222-577-526 or abrejwo@wbj.pl

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2011-08-08 09:38:47