On the WSE in recent weeks we have a flood of stock exchange messages from companies trying to expand their activities with a defensive sector. The army next to AI is currently the most hot topic on the stock exchange, and therefore new information warms up the demand to red. The courses of some WSE companies are growing at a dizzying pace.
Returning rates calculated in hundreds of percent in just over a month or several dozen percent rate of return even at one session, this year is the next edition of the wandering of the Polish specula on the WSE, about which I wrote more in the article “Stalówki and reinforcement took over the attention of Ukrainians.” Now, however, new companies have appeared at the radar of speculative capital whose courses have recently fired.
The motive of growth is once again the broadly understood defense sector, which has been one of the most hot investment topics on capital markets for several years. This year, it is particularly interesting in the European edition after the announcements of destiny for defense EUR 800 billion by the EU, increased expenditure on the German army and the obligations of NATO countries to spend 5 percent. Defense GDP.
It is no wonder then that the leaders of the European sector, such as Rheinmetall, gained more than the most important Hossy companies associated with AI, with Nvidia at the forefront (190 percent vs 25 %). The entrance to the industry is seen as joining the Tolkien Saltna Góra, filled to the brim with gold, where everyone will find something for themselves. Therefore, more companies pull up the hill, followed by stock market messages, ignite the dreams of speculators.
The most important example of the last week is trade in bumech actions. He is the only stock market owner of a coal mine not belonging to the state. Interestingly, this is once again in recent years, when Bumech ignites emotions on the stock exchange. Let us remind you that the mentioned mine – PG Silesia – Bumech bought back at the beginning of 2021 just before the raw material bull market. Shares over the past 2021 and 2022 increased from below PLN 3.50 to over PLN 90, earning several thousand percent.
In the current wave of growth, the exchange rate gained over 370 percent. From the end of July, and only from the beginning of September the exchange rate has gained 140 percent, checking at the level of 40.45 PLN, not being seen since March 2023. On September 3, the company announced that it had signed a contract (preceded by the July letter of intent) about cooperation with OTT Technologies based in South Africa in the field of production and development of armored vehicles to the European market.
That was enough for vague investors de facto They considered the plans in terms of opportunities, not the risks that are associated with entering a completely new sector. The more that it is on the side of Bumecho the financial support of the cooperation process, incurring expenses related to the launch of production, as well as the costs of supporting the sale of products. Where emotions dominate trade, there is no place for fundamental analyzes, hence the company's current problems related to the lack of profitability of the Silesia mine and its restructuring and its decline in the last 8 quarters with losses are irrelevant.
Another company that gains after a stock office heralding plans to enter the defensive sector is Grenevia, i.e. the former Famur (currently an entity from the Grenvia group), producing mining equipment. On September 5, the company announced that it has signed a letter of intent with the Polish Armaments Group about cooperation. After a communication, the company's exchange rate at the next three sessions gained up to 78 percent. up to PLN 4.48 for shares recorded during Tuesday's trade. The course was the highest since the holidays of 2019. The president of Famur in an interview with Bankier.pl, however, strung the expectations of investors, emphasizing what was noteworthy in the context of other companies that entering every new industry requires a lot of time and patience.
On Tuesday, the speculative demand also took the goal of The Farm51 actions, i.e. the Game Studio from NewConnect, which updated its strategy and announced that the second pillar of activity would be the development of drone technologies, also in the radio struggle environment. The company's exchange rate after a message gained over 51 percent. up to PLN 7.80, although it is worth remembering that for several years it has been in a powerful inheritance trend and is still losing over 40 percent this year. Incidence in response to the message is surprising, the more that the company informed about entering the drone segment in May and August, when it communicated about the next stages in the process of subsidy for its drone project.
These are not all of the stock market companies that have the ambitions to enter the defensive sector. Earlier, Unimot announced his participation, i.e. a fuel distributor, who is seriously trying to start operating in the field of military drones. He even wants to introduce on the stock exchange in the future. When an appropriate message appeared in the ESPI stock channel, the exchange rate gained up to 10 percent in a reaction.
The first company from the Polish stock exchange, which this year announced that it was entering the defensive sector, not being associated with it before, was Wielton, which is one of the leading European trailer producers. In March this year, Wielton Defense, belonging to the group, signed its first contract in this industry worth PLN 10 million. In August, mounting and production services of Jelcz trucks were announced, implementing contracts for the Armament Agency.
Exchangeable entities, already carrying out contracts for the defense sector and only trying to operate in the industry, we add to the stock market military battalion from the WSE, which already includes Lubawa, Zremb, Protector, Vigo System or recent debutant Arlen. Investors, however, have to ask themselves a basic question: will companies manage to demonstrate the results and their prospects for their improvement enough to reflect the ankle increase in valuation?
It is worth remembering that speculative capital is most often played by those companies that have problems, they have been reporting losses for a long time, and thus, their course before huge increases included many years of minima, or the historical bottom, or simply for many years they were outside the investment radar of investors, due to the less and less popular industry in which they operate. There is no shortage of those willing to do such a game, because only on Bumech acacia on Monday and Tuesday they exceeded over PLN 30 million per session.
Michał Kubicki
