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The Warsaw Voice » Other » September 3, 2008
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WSE Becomes Region's Largest Bourse
September 3, 2008 By A.R.    
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The Warsaw Stock Exchange (WSE) was far from busy in August. Investors neither flocked to buy shares nor clamored to sell them. After a short-lived bullish trend in the second half of July, the WIG all-company index and the WIG 20 blue-chip index both decreased slightly in August.

The bearish trend did not prevent the WSE from strengthening its position in Central and Eastern Europe. The Warsaw bourse has become the indisputable leader in the region in terms of capitalization, number of companies listed, initial price offerings (IPOs), and derivatives. According to the latest data from the Federation of European Stock Exchanges (FESE), the WSE has moved ahead of the Vienna bourse in terms of capitalization. At the end of July, the WSE's capitalization stood at 126.2 billion euros, compared with Vienna's 117.3 billion euros.

For several years the WSE has been gradually closing the gap to the Vienna exchange. At the end of 2005, the capitalization of the Vienna bourse was still over 27 billion euros higher than that of the WSE. By the start of this year, the difference shrank to 12 billion euros and now the value of all companies listed in Warsaw is almost 9 billion euros higher than the value of companies listed in Vienna.

Looking at the pace at which the WSE is expanding, it is likely that the Warsaw exchange will move even further ahead of its Vienna counterpart soon. Warsaw has a dynamic IPO market and prospects for welcoming new issuers now that the government plans to privatize more large companies, including energy-sector enterprises. Besides the Polish economy continues to grow fast.

The WSE has successfully competed with other markets in the region and has attracted a growing number of foreign companies. Only one foreign company was listed on the WSE in 2003, while now there are 25. At the same time, the number of foreign companies listed in Vienna has fallen from 21 to 18. The WSE has been pursuing a strategy to become the leading stock market in the region. Lower costs of market entry and successful international promotion are among the factors that have helped the WSE attract a growing number of Polish and foreign companies that seek capital for expansion. In the second quarter of this year, the WSE ranked second in Europe, after the London Stock Exchange, in terms of the number and value of IPOs.

Despite subdued moods on international stock markets, companies are still eager to have their IPOs in Warsaw. This year, 23 companies, including three foreign ones, have entered the WSE's main market. Their combined offerings were worth more than zl.7 billion. NewConnect, the WSE's alternative market, has expanded equally fast. Thirty-eight companies have entered this market this year, the combined value of their offerings exceeding zl.130 million.
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