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The Warsaw Voice » Other » May 14, 2008
Ukraine in Poland
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Eastern Partners
May 14, 2008   
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Ludwik Sobolewski, President of the Warsaw Stock Exchange, talks to Micha³ Jeziorski.

The Warsaw Stock Exchange has received an award from the Ukrainian Embassy in Warsaw for its contribution to developing Polish-Ukrainian cooperation. How has the WSE strengthened that cooperation?
In mid 2006, when I took over as WSE President we had to decide on the future development strategy for our market. Stock markets in Europe are consolidating, which is a result of increasing international competition in this field. We decided that the best medium-term strategy for WSE was to become an important regional market. Ukraine is not only a natural partner in this venture but also the most important one. We view the Ukrainian market as the most significant for us in Central and Eastern Europe, even though at the same time we are also active on other markets. Our relationship with Ukraine is a non-egoistic one, a true partnership. We have worked in this vein; it has been noticed and appreciated. Furthermore, WSE has become a kind of honorary ambassador of the Ukrainian economy, especially in cross-border trading. I am really proud of this award, as in 2006 we started practically from scratch.

WSE put in a lot of effort in 2007 to come closer to Ukrainian business circles. What benefits will this partnership produce?
We are interested in the closest possible cooperation with Ukraine's emerging capital market. This includes creating opportunities for Ukrainian companies to raise funds through the European market such as the Warsaw Stock Exchange as well as relations with Ukrainian stock exchanges. The capital market through its financial flows can be an excellent driver for economic integration at many levels. Additionally, the capital market molds society by facilitating active savings management and developing a middle class, a class of owners and investors. That is very important for Ukraine and for Poland. Not long ago, I had the pleasure to address these issues during a Polish and Ukrainian business roundtable, part of Prime Minister Donald Tusk's visit to Kyiv. Prime Minister Yulia Tymoshenko declared then that Ukraine is determined to build a modern capital market. Let me add that it is not an easy task. We want to support Ukraine in this project, share our experience and create mutually beneficial economic relations.

There are Ukrainian companies listed on the Warsaw Stock Exchange. How many are there and do you expect more in the future?
Our activities on the Ukrainian market have already borne results. Two companies from Ukraine have listed on WSE. Another Ukrainian company, currently listed on the London Stock Exchange, may join the WSE list soon. There are other projects in the pipeline. The Polish market is already an international one, and it is no longer necessary to go to London to reach investors who are London-based; they operate also in Warsaw. Additionally, Ukrainian business is relatively well known in Poland and that is the advantage of our market. Today, there is a general belief that the London, Frankfurt and Warsaw stock exchanges are the best options for Ukrainian enterprises considering going public. I am convinced that it is in Ukraine's strategic interest to have Ukrainian companies raise funds through WSE. In the several years needed to modernize Ukraine's own capital market infrastructure these businesses will be staying close to their home market. Moreover, by then, their presence on WSE will surely strengthen their potential for expanding their businesses internationally.

WSE and the largest Ukrainian stock exchange, PFTS, have signed a cooperation agreement. What does that involve?
We have established working relationships with three Ukrainian stock exchanges; with PFTS this has resulted in signing a cooperation agreement. We are at an early stage of building our relations. Today we still do not know what course the reorganization of the Ukrainian market will take. And a reorganization seems rather unavoidable, as eight stock exchanges-that is how many there are in Ukraine now-is too many even for such a big country with its significant economic potential. At the moment the largest stock exchange is PFTS, which has surpassed all the others. But it may have to defend its position with determination and vigor in the future.

What are other WSE activities in Ukraine?
We have had many meetings and conferences showing Ukrainian businessmen how the capital market works and presenting the advantages of the Polish stock market. We have already established working relationships with several brokerages in Ukraine which are now authorized to use the title WSE IPO Partner. WSE has such partner companies in other countries in the region, including Estonia and the Czech Republic.

You plan to open your office in Kyiv. When will that happen and what are your hopes related to this project?
Our constant presence on the Ukrainian capital market should help strengthen our cooperation with local businesses. This will be WSE's first representative office abroad. Its official opening is planned for June this year.

Does WSE have a chance of becoming the region's financial hub and its chief capital market in the near future?
It is obvious that the WSE has such potential. Will it happen in the near future? No, if by near future one means the next year or so. But it is realistic in a longer time horizon. There is one vital condition, however-we have to be competitive, much more competitive than the others, as there are several candidates aspiring to make Central and Eastern Europe their domain or sphere of influence. Still they are themselves located outside the region. We are the only contestant from the region and the only one in the region that can aspire to the role of a financial hub. I would like this to happen in close and mutually beneficial cooperation with the Ukrainian market.
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