📢 Weekly Blast #46 (11-15Nov2024)
Snapshot of actionable insights from the Polish stock exchange
👋 Welcome to the Weekly Blast - a snapshot of actionable insights from the past week you don't want to miss: recommendations, insider trading, company updates, significant contracts for small & mid caps, M&A activities, upcoming events and trends.
In case you missed it:
Here’s my latest deep dive on a Polish micro-cap. Enjoy!
Full list of write ups on Polish equities:
In today's edition:
💲 Polish Macro
Monetary Policy
Interest rate cuts are most likely to be discussed in the third quarter of 2025, according to a member of the Monetary Policy Council (RPP).
The latest projection from the National Bank of Poland (NBP) has moved the discussion on interest rate cuts to March 2025, with potential cuts between 25-50 basis points (bp) and a total reduction of 50-100 bp for the year.
The NBP expects inflation to decrease to its target by March 2025, allowing for gradual monetary policy easing, with potential rate cuts happening at a pace of 25 bp each time, up to 100 bp in 2025.
In October, the RPP rejected a proposal to raise interest rates by 200 bp, with only one member, Joanna Tyrowicz, supporting the hike, while the majority voted against it.
Another RPP member believes that enough economic indicators could support discussions about lowering interest rates as early as the first quarter of 2025.
Economic Growth and Industry
Poland's GDP grew by 2.7% year-on-year (y/y) in the third quarter of 2024, slowing from 3.2% growth in the second quarter. On a quarter-on-quarter (q/q) basis, GDP fell by 0.2% in Q3 after rising by 1.2% in the previous quarter.
Industrial production in Poland, adjusted for working days, declined by 1.3% in September 2024 compared to the same month in 2023, following a 0.5% drop in August, indicating ongoing weakness in the sector.
By September 2024, Poland recorded a trade surplus of 3.0 billion euros, meaning the country exported more than it imported, contributing positively to the economy.
Exports of key goods, including investment products, transport equipment, and supply goods, fell sharply in September, reflecting weaker demand in international markets.
The average monthly gross wage in Poland increased by 13.4% y/y in the third quarter of 2024, reaching 8,161.62 PLN, showing continued upward wage pressure.
There were 104 business bankruptcies in Q3 2024, a 19.5% increase compared to the same period in 2023, indicating financial difficulties for some companies.
In October, 17,199 companies were deregistered from the REGON system, which is a 0.2% increase month-on-month (m/m), suggesting a challenging business environment for some firms.
Inflation and Prices
Consumer prices for goods and services rose by 5.0% y/y in October 2024, with food and clothing prices contributing the most to the increase. Month-on-month, prices were up by 0.3%.
The cost of services provided by banks and other financial institutions increased by 7.1% y/y in October, reflecting higher fees for consumers and businesses.
Prices for telecommunications services, such as phone and internet, increased by 1.8% y/y in October 2024, showing a moderate rise in the cost of these essential services.
Around 60% of companies in Poland raised their prices in 2024, according to a report from the Polish Economic Institute, largely due to rising costs.
The WPI (Leading Indicator of Price Changes), which predicts future price trends, remained unchanged in November compared to October, indicating stable inflation expectations in the short term.