Which companies will help the lower interest rates? Agiofunds expert about the situation on the WSE

– If the cycle of interest rate reductions by the MPC is distributed in time, it will not create much danger for profits and valuations of banks – says Bankier.pl Jakub Bentke from Agiofunds TFI. He also indicates which industries and large companies from the WSE can gain thanks to the lower rates and on what condition we will witness the beating of subsequent records by WIG.

The Monetary Policy Council, as expected, reduced interest rates by 50 base points on Wednesday. The reference rate dropped to 5.25 percent. On the WSE, however, this movement has been discounted earlier. – Yesterday's cut was not a surprise to the markets. There was no spectacular price movements – he points out in an interview with Bankier.pl Jakub Bentke, managing funds at Agiofunds TFI.

– The last macro readings were a surprise to economists. Once again, inflation was lower than expectations, and the indicators of the economy's activity rather disappointed – adds Bentke. He points out that banks' shares responded to weaker data and the perspective of May foot cutting with decreases. – However, it seems that it was a slight reaction. Foot cutting took place earlier only about a quarter than expected. From the point of view of the sector's valuation, this is practically irrelevant – emphasizes.

Foot cutting banks won't hurt?

How can subsequent moves of the MPCs affect banks? – Analysts provide for the normalization of foot at 3.5 percent. in the horizon for two years. The question remains at what rate the council will continue to lower the feet. Any reduction a total of more than another 0.5-1 percent. This year they would be picked up as negative for bank valuations. However, if the cycle is mild, spread over two years, it is not a greater danger to the industry – emphasizes Bentke.

As for the valuations, he indicates that the banking sector in Poland is currently valued at the level of its European counterparts. – It is worth noting, however, that before Covid and the war in Ukraine
He was valued with a significant bonus. The reason is, of course, faster economic growth of Poland, and thus also an increase in assets – he adds.

– It is also worth remembering that most banks apply a security policy, which in a short term will neutralize the negative impact of lower interest rates. Products for franc loans will also end next year. Analysts predict flat or slightly falling profits in subsequent years and continuation of dividend payment with a dividend foot around 10 percent. It seems that banks are not particularly threatened with calm, distributed foot discounts by the MPC – emphasizes the expert Agiofunds TFI.

Developers' shares have been the highest since 2007

In his opinion, other sectors should gain on the stock exchange. At lower feet, a credit action should grow, which will drive the economy. – Individual loans themselves are over PLN 700 billion. There will also be a tendency to save, which will positively affect consumer demand – says Bentke.

What sectors on the WSE can use the Polish loosening of politics? – A textbook example is, of course, developers, Especially to the resident. They have loans themselves, just like their clients. The sector has significant increases behind it, but companies are still traded with a single -digit price/profit indicator, and dividend rates exceed 10 percent. The demand for apartments is favored by the fact that we are still very below the European average in terms of the number of rooms per person and this will not change significantly for years – the expert points out. He points out that WIG-non-death has recently reached levels that have not been seen from 2007.

On Radar Cyfrowy Polsat and companies focused on consumer

He adds that it is also worth looking at companies with high debt. – Cyfrowy Polsat will be a good example here.
This is clearly seen in his chart – says Bentke.

In his opinion, a positive impact will also be visible in the case of companies dependent on the broadly understood consumer. – They will gain food on this network, primarily food, such as Żabka or Dino, But probably even more Companies such as LPP or CCC – adds the manager.

– From the point of view of the entire economy, foot reductions are beneficial. Will stimulate consumption and investments, and thus, GDP growth – emphasizes the expert. He points out that since the beginning of the year we have been witnessing an influx to the dance floor of foreign funds. This is partly the result of capital rotation from the USA to Europe, and partly an expression of expectations for peace in Ukraine and profits from its reconstruction.

– Thanks to this, we exceeded the symbolic 100,000 Point on WIG. If the customs wars are over, in particular the one with China, we will probably witness further increases on the WSE – sums up Jakub Bentke.

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