Strategy implementation

The strategy specifies ways in which the company wants to strengthen its market position and take care of future profits. If investors agree with the strategy and see that it is being consistently implemented, this increases their faith in the future financial results of the company and the stock price goes up. An investor who sees that the company is implementing its long-term plans will be willing to remain a shareholder and wait until these actions bring results.  Long-term processes are sometimes difficult to observe on a ongoing basis therefore investors pay particular attention to milestones - significant events informing about important project stages (% progress of project Opole II is an example of this measure).

Global sentiment

Global sentiment is driven by geopolitical events and decisions made by central banks - particularly the FED, EBC, BoE and BoJ.  If one of these institutions decides to increase the supply of money, this immediately is reflected in share prices around the world (we live in an era of integrated financial markets, an interconnected system).

Expected financial results

Expectations regarding future results have key impact on the share price. In market jargon, this means that the market is buying the future. The art of investing in equities is really the art of forecasting future results, whilst investing is a sort of bet on what the next financial results will be like. Investors eagerly await the publication of financial results. If the company presents financial results above market consensus, the share price goes up.

Sentiment on Warsaw Stock Exchange

There are days when the share price of most companies listed on the Warsaw market goes up and days when most companies decline. If market sentiments are bad, then even good news from PGE may not be sufficient incentive for investors. And vice versa: in times of overall optimism, weaker data published by companies are overshadowed.

Mergers and acquisitions (M&A)

Companies can grow in two ways: organically (by developing production lines or acquiring new clients) or by leaps (through mergers with other entities, i.e. M&A). A successful merger or acquisition may bring synergies (a new entity created from a merger or acquisition is worth more than the sum of its components).

Macroeconomic data

Investors observe data related to the state of the economy. These include gross domestic product, interest rates, inflation, unemployment, average gross salary, production price indicators, industrial production sold. This data may be a reference point for forecasting demand for company's products or costs of manufacture thereof.

Profit allocation

Share price and dividend are sources of profit for investors. The level of dividend depends on two factors: amount of net profit and decision on the allocation of this profit, i.e. dividend policy. More on this subject can be found in the 'dividend' section.

Regulations
Changes in the regulatory environment have significant impact on financial results, investors' decisions and share prices. Example: the decision of the President of the Energy Regulatory Office regarding a rate of return of invested capital for distribution companies, which sets out the level of remuneration for the company

Key persons' transactions

The key shareholder by definition has the largest number of shares. If it decides to sell some of its stake, this will increase market supply. On the other hand, when the key shareholder increases its stake in the company, this is an incentive for other investors. The market assumes that the key (strategic) investor knows the company especially well (having invested a lot of funds in it) and additionally may exert influence on the company through the general meeting. Smaller investors ask themselves: does the key investor believe in the company? Transactions by key persons (Management Board, Supervisory Board) are interpreted in the same way.

Commodity markets

Commodity markets have a direct impact on company results. PGE sells electricity and colour-coded certificates on commodity markets, and buys fuel and CO₂ allowances. Commodity markets feature significant volatility but long-term trends are also visible. Price trends on commodity markets result from factors such as technological and regulatory changes. Prices on commodity markets are an important element of forecasts prepared by brokerage firms.