Tuesday, December 02, 2008

Suspicious manipulations cause speculation at the WSE

The order placed by JP Morgan shortly before the closing of trade on the WSE on November 12 pushed indices up 5 percent and was regarded as a manipulation by the Financial Supervisory Commission (KNF)
The issue will now be handled by the prosecutor. "Accusations presented by KNF are serious. It looks like manipulation. It is good that the supervisory board handled this issue that well," said Wieslaw Rozlucki, former president of the WSE.

The bid had a value of zl.130 million of which zl.100 million was carried out as a shares purchase. A broker acted on behalf of JP Morgan Securities, and decided to carry out his own economic interests related to futures contracts. Previously a broker at the Polish side was informing that the execution of such a bid could significantly influence the condition of the market. However, he was being informed that there will be a huge sales order at the other side and despite it was not carried out, the client decided to push through with the transaction.

The task of the prosecutor will be to point out who personally made this order and wanted to influence share prices on the side of JP Morgan.

WSE suffers another terrible day, hits five year low

In a related story, after Wednesday's surprising rise the Warsaw Stock Exchange (WSE) entered a downward spiral with stocks tumbling with double the force yesterday
The WIG20 lost 5.79 percent and was pulled down mainly by Bioton, Agora and KGHM. The wider WIG index lost 4.81 percent and hit its lowest level since December 2003. The falls were accompanied by larger than usual turnover, which stood at zl.1.3 billion.

These results came as analysts fear the deepening global recession. In the US, the number of those who registered as unemployed hit a 16 year high, while the price of oil fell in London to below USD 50 per barrel as European bourses also suffered major loses.