Monthly Report BREBRE BankBank SecuritiesSecurities BRE Bank Securities 4 June 2009 Periodic Report Monthly Report Equity Market Macroeconomics June 2009 Equity market WIG 31 031 After reaching 2000-2150 pts on WIG20 (which will be a good opportunity to sell WIG20 companies), the market will begin a correction towards 1800- Average 2009E P/E 12.9 1700 pts. During the summer, stock markets will probably move sideways in Average 2010E P/E 13.5 anticipation of further economic developments (WIG20 will move in the 1700-2000 range). Avg daily trading volume PLN 1 275m Company News WIG vs. indices in the region Banks. In Q1’09, earnings fell by half y/y. The banks reduced loan supply sharply, which will impact volumes throughout 2009. Interest rates on 48000 pktpts deposits were under pressure, which will not disappear over the next two quarters but which should be abating as term deposits expire and loan 41800 margins increase. We reiterate our sell rating for the smaller banks and we recommend accumulating big banks in a medium-term perspective. 35600 Gas&Oil. Given the promising signals from the fuel market, good outlook for Q2’09 earnings and the possible developments concerning the EU 29400 mandatory reserves directive, we reiterate our positive ratings for Lotos and Orlen, although if there is a correction in commodity prices a temporary slump in sentiment is possible. We recommend reducing PGNiG. 23200 WIG BUX PX Telecommunications. TPSA’s dividend record day falls in mid-June; the 17000 summer could bring news about a buyback effort or additional dividends. An 2008-05-29 2008-09-19 2009-01-19 2009-05-14 attractive investment at the current prices. Analysts: Media. Due to the dramatic rallies on media stocks seen over the past month, we are lowering our rating for TVN to hold. We remain neutral on Michał Marczak Cyfrowy Polsat and we still see upside potential for Agora and WSiP. (+48 22) 697 47 38 [email protected] IT. We maintain a positive outlook on Asseco, Sygnity and wholesale hardware distributors. We remain neutral on Komputronik. Marta Jeżewska (+48 22) 697 47 37 [email protected] Metals. The stock market correction will be accompanied by a correction in the commodity markets which, given the recent rallies, makes the sector Kamil Kliszcz one of the most risky short-term investments (high likelihood investors will (+48 22) 697 47 06 be cashing in on their gains). [email protected] Construction. The most interesting investment opportunities in the sector Piotr Grzybowski include Rafako (good outlook for its segment), Mostostal Warszawa, (+48 22) 697 47 17 [email protected] Polimex (attractive price) and Ulma. We are neutral on Budimex and Unibep and we consider Erbud and PBG overpriced. Maciej Stokłosa (+48 22) 697 47 41 Developers. The valuation of some of the developers is significantly in [email protected] excess of the value of their assets. We recommend selling Dom Development, reducing J.W. Construction and holding Polnord. Macroeconomic Analyst BRE Bank Macroeconomics Team Retail. We still recommend overweighting Emperia vs. Eurocash as we project systematic improvements in Emperia’s earnings. Ratings. We are downgrading our ratings on the following stocks as of the release date of this monthly report: Elektrobudowa (Hold), Erbud (Reduce), J.W. Construction (Reduce), Mostostal Warszawa (Accumulate), PBG (Reduce), Polnord (Hold), TVN (Hold), and we suspend our rating for KGHM. BRE4 June Bank 2009 Securities does not rule out offering brokerage services to an issuer of securities being the subject of a recommendation. Information concerning a conflict of interest arising in connection with issuing a recommendation (should such a conflict exist) is located on the final page of this report. BREBRE BankBank SecuritiesSecurities Monthly Report Table of Contents 1. Equity market ............................................................................................. 3 2. Macroeconomics ....................................................................................... 5 3. Current recommendations of BRE Bank Securities S.A. ........................... 8 4. Recommendation statistics ........................................................................ 9 5. Financial Sector ......................................................................................... 10 5.1. BZ WBK ..................................................................................... 17 5.2. Handlowy ................................................................................... 19 5.3. ING BSK .................................................................................... 20 5.4. Kredyt Bank ............................................................................... 21 5.5. Millennium ................................................................................. 22 5.6. Pekao SA .................................................................................. 23 5.7. PKO BP ..................................................................................... 24 6. Gas & Oil, Chemicals ................................................................................. 26 6.1. Ciech .......................................................................................... 27 6.2. Lotos .......................................................................................... 29 6.3. PGNiG ....................................................................................... 31 6.4. PKN Orlen ................................................................................. 33 6.5. Police.......................................................................................... 35 6.6. ZA Puławy ................................................................................. 37 7. Telecommunications .................................................................................. 38 7.1. Netia .......................................................................................... 39 7.2. TP SA ........................................................................................ 40 8. Media ......................................................................................................... 41 8.1. Agora ......................................................................................... 42 8.2. Cyfrowy Polsat............................................................................ 44 8.3. TVN ........................................................................................... 46 8.4. WSiP .......................................................................................... 48 9. IT Sector .................................................................................................... 49 9.1. AB............................................................................................... 50 9.2. Action.......................................................................................... 51 9.3. ASBIS ........................................................................................ 52 9.4. Asseco Poland............................................................................ 53 9.5. Komputronik................................................................................ 55 9.6. Sygnity........................................................................................ 56 10. Metals ........................................................................................................ 57 10.1. Kęty ........................................................................................... 57 10.2. KGHM ........................................................................................ 58 11. Construction .............................................................................................. 59 11.1. Budimex ..................................................................................... 63 11.2. Elektrobudowa ........................................................................... 64 11.3. Erbud ......................................................................................... 65 11.4. Mostostal Warszawa................................................................... 66 11.5. PBG ........................................................................................... 67 11.6. Polimex Mostostal ..................................................................... 69 11.7. Rafako ........................................................................................ 71 11.8. Trakcja Polska ............................................................................ 72 11.9. Ulma Construccion Polska ......................................................... 74 11.10. Unibep ........................................................................................ 75 12. Real Estate Development .......................................................................... 76 12.1. Dom Development...................................................................... 78 12.2. J.W. Construction ....................................................................... 80 12.3. Polnord ....................................................................................... 81 13. Retail\Wholesale ........................................................................................ 82 13.1. Emperia Holding ........................................................................ 82 13.2. Eurocash ................................................................................... 83 14. Others