Sell Polish Bonds on Worsening Finances, BNP Says (Update2)
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By Piotr Skolimowski
Sept. 10 (Bloomberg) -- Investors should sell Polish government bonds because of a “very dangerous” fiscal outlook for the country, BNP Paribas SA said.
Polish bonds weakened and the zloty fell after investors bought just over half the five-year notes on offer from the Finance Ministry yesterday in the first auction since the government said the budget deficit will almost double next year.
“This is a direct consequence of a very dangerous fiscal outlook presented in the 2010 budget draft,” BNP Paribas wrote in a note to clients today. “We recommend selling Polish bonds across the curve.”
Poland is struggling to curb its budget deficit even as it leads the European Union in growth, expanding 1.1 percent in the second quarter. Policy makers this week approved a draft 2010 budget capping the central government deficit at 52.2 billion zloty, almost twice this year’s level.
The Polish zloty weakened 1.2 percent to 4.1635 per euro as of 11:22 a.m. in Warsaw, the most since Sept. 1. Polish bonds fell, pushing the yield on the five-year note four basis points higher to 5.79 percent and the yield on debt maturing in October 2019 up six basis points to 6.23 percent, according to PKO Bank Polski SA in Warsaw. Bond yields move inversely to prices.
Poland may need to borrow 203.8 billion zloty in 2010, Deputy Finance Minister Dominik Radziwill said at a news conference on Sept. 7. The government also plans to raise 25 billion zloty from the sale of state-owned assets next year to meet its financing needs.
Debt Sale
Poland sold 1.11 billion zloty ($390 million) of 5.75 percent Treasury bonds maturing in April 2014, the Finance Ministry said yesterday. The ministry offered between 1 billion and 2 billion zloty of debt.
The sale of up to 2 billion zloty ($701 million) of bonds due September 2022 planned by the Finance Ministry for Sept. 23 “could also constitute an important risk,” according to BNP.
“The coming months will witness a struggle between the impact of deteriorating public finances and privatisation-driven inflows,” BNP said. “Eventually the zloty will have to lose ground.”
To contact the reporter on this story: Piotr Skolimowski in Warsaw at pskolimowski@bloomberg.net
Szkoda ze nie ma jakiegos czynnego Cruisa pod reka,zeby ich roz*******
Sprzedawac,wychodzic,ale wlasnie kupili Fortisa i Dominet i wlaza do Polski az trzerszczy