Tag Archives: Uncertainty

Polish management reshuffles heighten policy uncertainty

* Bourse down 24 pct this year, hit lowest considering that mid-2009

* New govt reshuffles state-run companies’ management

* Future of Polish economy uncertain, fund managers say

By Adrian Krajewski and Marcin Goclowski

WARSAW, Dec 14 Poland’s ruling conservatives have ousted a number of leading executives of state-owned businesses since taking energy right after an October election, in what investors be concerned marks the start off of a campaign to seize a lot more manage over the economy.

In a sign of mounting concern amongst fund managers, Warsaw’s blue-chip WIG20 share index hit its lowest level in six years final week, extending losses that followed the shock election of President Andrzej Duda in Might.

That paved the way for his economically left-leaning but nationalist-minded Law and Justice celebration (PiS) to score a landmark election win in October.

Investors are concerned mainly about PiS plans to tax banks and massive retailers to fund social spending, and about signals that PiS wants to rearrange the energy sector to have profitable firms assume the monetary issues of loss-generating coal miners.

PiS has constructed its popularity on a promise of much more economic equality and has stated it wants Polish, not foreign, money to have more control over company.

“When I hear how very good (PiS tells us) Poland is going to be and at the very same time I witness how the economy is obtaining battered, I truly give up. It may be high time to flee the country,” mentioned a Warsaw-based economist at a foreign-owned bank, declining to be quoted by name.

Reuters spoke with ten fund managers, economists and bankers, who have expressed related concerns.

Polish banks, the most most likely targets of PiS policy plans, have shed 28 % of their worth this year, even though power businesses, which with each other with banks make up about half of the WIG20, have lost 35 percent.

In the latest sacking, the supervisory board of Poland’s dominant gas firm PGNiG dismissed the state-run company’s head Mariusz Zawisza on Friday, replacing him with former PiS economy minister Piotr Wozniak as acting CEO.

State-run utilities Enea and Energa also sacked executives final week.

The head of the state-controlled Warsaw bourse has also resigned, as have the head of cargo carrier PKP Cargo and the chief executive of insurer PZU, raising doubts about PZU’s ambitions to build a best five Polish bank.

Polish governments have a tendency to reshuffle top management at state-owned organizations, but PiS has acted much less than a month after taking office.

The country’s biggest lender PKO, Europe’s No.two copper producer KGHM and best refiner PKN are seen subsequent in line for management reshuffles.

“Alterations are some thing that is expected and organic (when government modifications). This industry anxiousness is unfounded,” Poland’s deputy treasury minister Marek Zagorski told Reuters. “The treasury ministry’s function is to calm the scenario and allow the Warsaw bourse’s development.”


There have been few concrete signs the dismissals have affected firm policies, but investors are concerned the new bosses will push the government’s agenda.

“I am afraid they will rock the boat, which will lead to decrease foreign and domestic investments, even though banks will curb lending since of the new tax. In 1 year’s time we will see an financial slowdown,” a bank source stated.

Bankers, fund managers and economists fret about a repeat of Hungary’s scenario, where unpredictable economic policies by Prime Minister Victor Orban’s government, a function model for PiS leaders, are blamed for scaring off investors.

Hungary’s central bank bought a majority stake in the country’s sluggish stock exchange last month, following Europe’s highest bank levies reduce the Budapest bourse’s turnover by 70 % between 2010 and 2014.

“Numerous aspects have appeared simultaneously (in Poland),” a Warsaw-based fund manager mentioned. “Some face management alterations, others element in tax hikes.”

“Positives are difficult to uncover,” the fund manager said. “We can evaluate the effect of the bank asset levy on the lenders’ balance sheets, but the wider influence on the future of Poland’s economy is unpredictable.”

Investors be concerned the government could try to take over some assets of Polish pension funds if it struggles to finance budget spending, successfully eliminating them as relevant market place players.

Poland, Eastern Europe’s greatest economy, has not suffered a recession in 20 years. This and around $ 11-billion worth of privatisations implemented since the 1989 fall of communism have made its bourse central Europe’s biggest.

Nonetheless, the valuation of recently privatised firms are likely to come under scrutiny soon after the Supreme Audit Workplace stated final week that the state treasury had sold several companies also cheap, which includes chemical group Ciech.

Retailers also face a new levy next year although the new bank tax bill, currently in parliament, could cost the financial sector up to 7 billion zlotys ($ 1.8 bln) next year.

The strategy mirrors taxes imposed on Hungarian banks in 2010 by Prime Minister Orban. Last month, Hungary proposed capping the tax by far more than half the present level, fearing that weak corporate lending may possibly jeopardise economic recovery.

Poland’s central bank governor Marek Belka warned on Friday that the simultaneous introduction of the bank tax and the government’s plan to force banks to shoulder significantly of the burden of converting Swiss franc-denominated mortgages would result in a “serious crisis” for some banks.

Industry sources said uncertainty relating to the banking sector has delayed ongoing sales of nearby units by Raiffeisen and Basic Electric .

Foreign banks have been retreating from Poland in the past few years due to falling margins, a trend highlighted by Deutsche Bank’s Polish arm last week when it raised mortgage loan prices.

“The decision … was caused by the bank’s approach … as effectively as the necessity to adjust to the challenges facing Deutsche Bank and the entire sector,” Leszek Niemycki, Deutsche Bank Polska’s deputy chief, said. ($ 1 = three.9693 zlotys)

(Editing by Susan Fenton)

Uncertainty deepens over Afghan Taliban leader

PESHAWAR, Pakistan Uncertainty more than the fate of Afghan Taliban leader Mullah Akhtar Mansour deepened on Friday, as speculation grew over a possible successor, regardless of repeated denials by the spokesman of the Islamist movement that he had been badly wounded in a gunfight.

Several sources in the Taliban have stated that Mansour, whose claim to the leadership is rejected by rival factions, was seriously wounded and possibly killed in a shootout at the home of one more Taliban leader close to Quetta in Pakistan on Tuesday.

According to one senior Taliban commander, who mentioned that Mansour had died of his wounds on Thursday, Sheikh Haibatullah Akhundzada, a single of Mansour’s two deputies, is poised to take over the leadership.

“I personally think Sheikh Haibatullah Akhundzada and the Emirate will announce his death at an proper time later,” he mentioned, employing the term the Taliban use to describe their movement. “I am hundred % confident that Mullah Mansour is no far more,” he said.

Afghan Chief Executive Abdullah Abdullah stated on Twitter on Thursday that Mansour had been wounded in a firefight close to Quetta, but there has been no direct evidence to confirm what happened.

The Taliban’s major spokesman has dismissed the reports as propaganda from Afghan intelligence solutions meant to develop divisions within the movement, saying Mansour is alive and well.

Nevertheless, scepticism has been fueled by the secrecy that surrounded the death of Taliban founder Mullah Mohammad Omar, which was only confirmed in July, much more than two years right after he had died in 2013.

There has been no statement so far from Mansour, who had been in efficient charge of the movement at least given that Omar’s death and who swiftly assumed the title of leader after it was confirmed.

Taliban spokesman Zabihullah Mujahid stated enhanced safety measures meant it was taking some time to contact Mansour directly, but that a voice recording would be released.

“Well, we are attempting to locate him by way of our folks to get his voice and release to the media to kill these rumors spread by the Afghan puppet government,” Mujahid said.

PEACE Approach

The lack of clarity has clouded prospects for any resumption in a peace process facilitated by Pakistan soon after talks broke down following the news of Omar’s death.

Afghan officials are cautious about what the indicators of rising fragmentation in the Taliban could imply.

“The rift is undoubtedly weakening the movement and if they are not a single united force, it could be simpler to convince them (to accept) peace or eradicate them,” said one particular official, who asked not to be identified.

Other Taliban members close to Mansour have confirmed he had been hurt in the gunfight, which followed a dispute more than how to deal with the factional split in the movement, and had apparently been taken to a private hospital for therapy.

“We even never know where he was taken but some of our people later told us he was admitted in a private hospital and that his situation was ?still crucial,” mentioned a single senior Taliban member close to Mansour.

The rivalry in between the factions led to fierce fighting in the southeastern province of Zabul final month with dozens of people killed. Mullah Mansoor Dadullah, a best commander in the breakaway group opposing Mansour, is also reported to have been killed last month.

“The local commanders, who are the backbone of the insurgency, look to disobey their leaders’ orders when it comes to subduing these who do not accept Mullah Akhtar Mansour as the supreme leader,” the Afghan official said.

“The main question they ask is: ‘You told us to go fight the invading or Afghan forces but now you want us to kill every other.'”

(Added reporting by Hamid Shalizi in KABUL Writing by James Mackenzie Editing by Paul Tait and Mike Collett-Whit)

Agen Sabung Ayam