Following year-long debates and extensive public consultations, Poland has revamped its pension system, a move that could provide a tailwind for the stock market. However, things are changing (albeit slowly). These are some of the long-standing, widely accepted narratives why the Polish stock market has not been able to pick up pace.
Poland has also been lacking a sophisticated sector for pension monies going towards purchasing domestic equities. It is true that the overall interest in equities in Poland is well behind other countries in Western Europe, let alone the US or Asia.
Problem #2: “ there is little domestic demand for equitie s” The most well-known companies are CD Projekt and Allegro, but also Amazon has 15.000 employees in its Development Center in Gdansk, including a variety of teams that deliver innovative solutions to power Amazon products and services around the world such as the cloud-based voice-recognising virtual assistant Alexa. The country's large, highly educated population puts it at an advantage: it has one of the better university systems in the world, ranked among the top 10 globally by some surveys, and a talented pool of developers. Thanks to a mix of culture and affordable living costs, many European companies have outsourced their programming to Poland, where there is indeed a thriving start-up scene. Most of the blue-chip companies that make up the WIG20 index are old economy, and in many cases the government is a significant (or even dominant) shareholder: such companies tend to trade at a discounted valuation, whether in Poland or elsewhere.īut if you dig a bit deeper, you actually discover a high-tech hub for IT, biotech, healthcare and media/gaming companies. Problem #1: “ it’s just old economy, often state-controlled ” This is reflected in very solid credit ratings: A2 (stable) from Moody’s, A- (stable) from S&P and A- (stable) from Fitch. Poland is now the seventh largest economy in Europe, ahead of Sweden, and to fund its growth it didn’t even have to rack up an outrageous amount of debt: it’s latest debt/GDP ratio is still only 57%, compared to 70% for Germany, 115% for France or 155% for Italy. from 1992 to 2019 (+5.1% expected in 2021 after the -2.7% Covid drop), a period during which it grew faster than Singapore, Taiwan and South Korea. Here is the more recent history: 27 consecutive years of economic growth, averaging 4.2% p.a. Macroeconomic conditions have hugely improved since the late 1980s, when it was one of the poorest countries in Europe with salaries just one tenth of neighbouring Germany and outdated and inefficient infrastructures and industries. High-income " status and today ranks alongside its Western counterparts. Poland is one of Europe’s most consistently growing economies: it was the first Eastern European country to achieve " Some of the following considerations are indeed taken from these posts.
Some economic backgroundĪ full history of the evolution of the Polish financial markets is beyond the scope of this write-up: Undervalued Shares has several excellent articles on what it means to invest in Poland, including some specific stock ideas: you can find them here, here and here. Traded under the ticker GPW.WA and with a market cap of around $400 million, the group includes the Warsaw Stock Exchange, the biggest in Central & Eastern Europe (55%-60% of group revenues) the TGE Group, the only licensed commodity exchange in Poland (35%-40% of group revenues) and a 33% stake in KDPW, the central infrastructure for the depository, clearing and settlement system in Poland. Giełda Papierów Wartościowych w Warszawie Spółka Akcyjna (I think we all agree that going forward it’s better to call it GPW ) is the primary financial exchange for everything that goes on in Poland, from equities to fixed income to derivatives to a large business in electricity and gas trading. MHRA 'PLWSE - Warsaw Stock Exchange', All Acronyms, 8 July 2022, Bluebook All Acronyms, PLWSE - Warsaw Stock Exchange (Jul. PLWSE - Warsaw Stock Exchange, All Acronyms, viewed July 8, 2022, MLA All Acronyms. Retrieved July 8, 2022, from Chicago All Acronyms. Please use the following to spread the word:ĪPA All Acronyms.