PZU on the WSE

PZU’s shares were first traded on the Warsaw Stock Exchange on 12 May 2010. PZU is one of the largest companies listed on the WSE and has been in the WIG20 index since its IPO.

Further, it is in the RESPECT Index and WIGdiv, WIG 30. Since 2012, PZU’s shares are also in the CEERIUS sustainable development index (CEE Responsible Investment Universe). CEERIUS is an index of the Wiener Börse for Central and Eastern European (CEE) companies. It consists of companies that meet certain quality criteria regarding social and ecological aspects.

The condition of global economies should be mentioned as one of the key factors affecting the behavior of exchanges in 2013. In the first half of 2013 investors were distraught as they observed weakening economies and signs of recession in the Eurozone. The condition of emerging markets sparked concerns while the deceleration in the pace of GDP growth in China caused the most fear. Ben Bernanke surprised the markets in June when he announced the commencement of tapering. This statement by itself accompanied by the protracted period of anticipating its execution formed a source of weakness in emerging countries’ stock exchanges and perturbation on the foreign currency markets in some of them. The perspective of the US Federal Reserve retracting extraordinary stimulation measures was offset by more intense quantitative easing in Japan and the unexpected interest rate cut by the European Central Bank. The latter half of the year accrued the first signals of improvement in the economy, while subsequent months confirmed this trend, at least in the United States, Germany and Japan, representing three of the five largest economies. At the end of the year, the conviction of there being a robust growth outlook was more prevalent than concerns related to the curtailment of QE3.

To sum up 2013, we observed a sharp dichotomy on the capital markets between the stock exchanges in developed markets and emerging markets. While the S&P500 (US) and DAX (Germany) indices smashed new bullish records, the Warsaw Stock Exchange more frequently followed the path demarcated by other stock exchanges in emerging markets, even though the assessment of the condition of our market is not clear-cut. Blue chips disappointed. As it retreated by nearly 7% in 2013, the WIG20 index’s performance placed the Warsaw Stock Exchange among the outsiders. Small and medium companies, however, gave investors the opportunity to generate earnings. The MWIG40 and SWIG80 indices surged upward by more than 30%. As a result, the overall market WIG index grew by 8%.

The circumstances on the Warsaw Stock Exchange were driven by three major factors with only one of them being positive. The unfolding situation in the economy supported the bullish market while fears concerning the consequences of the Fed’s tapering program and the dismantling of the second pillar of the pension system worked against it. It appears that the diminishment of the role played by open-end pension funds on the Polish capital market was the greatest disappointment of 2013. The deepest declines on the Warsaw Stock exchange took place on September 5, namely the date of announcing the assumptions underlying pension system reform.

The PZU share price in 2013 was also influenced by the volatile behavior of investors on global financial markets, which was affected in particular by the European Central Bank and the Bank of Japan continuing to loosen policy, the Fed’s commencement of tapering QE3 and the local problems related to pension reform. Investors undoubtedly appreciated PZU’s very robust financial performance in the various quarters of 2013. The attractive dividend policy adopted by the Company’s Management Board reflected by the valuations and recommendations given by equity capital market analysts also contributed to share price growth. 

In 2013, the closing price of PZU shares ranged from PLN 385.00 (on 5 May) to PLN 477.9 (on 6 November). Since mid-March 2013, i.e. the publishing of PZU performance for 2012, its stock prices have been much higher than those of other WSE blue chips. The trend lasted until the end of 2013. The closing price from the last session in 2013 amounted to PLN 448.95, which was a growth by 2.7% compared to the closing price of 31 December 2012 of PLN 437.00. In the same time, WIG20, including the largest companies, lost 7.1%. In 2013, the average market price of PZU stock was PLN 432.19 and was PLN 86.17 higher than in 2012.

PZU stock is liquid. At the end of 2012, 65% shares were traded. Average daily turnover of PZU shares in 2013 amounted to 188,219 shares and the highest level (787,905 shares) was reported on 13 March 2013.

At the end of 2013, the market valuation of PZU Group was PLN 38,768 m. The price/book value ratio was 2.95, making PZU one of the best-valued companies in the financial market listed with WSE.

Stock prices

Item31 December 201331 December 201231 December 2011
Market price per share / book value per share (P/BV)                      2.95 2.64 2.07
BVPS
Book value per share 
152.03 165.24 149.03
Market price per share / earnings per share (P/E) 11.77 11.60 11.38
EPS (PLN) Earnings (losses) per share / number of shares                          38.16 37.68 27.14
DY Dividend yield (%) Dividend per share / market price 11.1%* 5.1% 8.4%
DPS (PLN) Dividend per share 49.70* 22.43 26.00
TSR
Total shareholder return (market price of shares at end of period - market price of shares
at the beginning of the period + dividend paid in the period) / market price of shares at beginning of period
14.1%* 48.7% (5.8)%

* including dividends paid from 1/01 - 31/12/2013 ie .PLN 29.70 per share from 2012 profit and PLN 20.00 per share from surplus capital as an interim dividend for 2013