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The Warsaw Voice » Business » June 17, 2010
From the Business Editor
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Enter the dragon
June 17, 2010   
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Poland’s largest insurance company PZU SA made a spectacular debut on the Warsaw Stock Exchange in May.

The company’s initial public offering (IPO) was successful in large measure thanks to a vast group of small-time savers and institutional investors from abroad who, confident in the insurer’s potential, signed up for PZU shares en masse.

The company’s IPO broke several records. The shares available in the offering were worth over zl.8 billion, making it the largest IPO in the history of Poland’s capital market. It was also the largest public offering in Europe since the end of 2007 and the largest insurance company offering in five years.

The PZU offering attracted almost 250,000 private investors. The company’s shares opened 15 percent above their IPO price on their first day on the trading floor, despite tension on European capital markets and an escalating crisis in Greece. PZU shares were also popular with institutional investors, including foreign investors, who placed orders for several times more shares than they could hope to buy.

According to experts, the popularity of PZU among foreign financial institutions is another sign that Poland is regarded as a safe and attractive investment destination. This should come as no surprise because the country has charted high in global league tables in terms of investment appeal over the past several years. The trust in Poland is particularly high among German investors affiliated in the Polish-German Chamber of Industry and Commerce. In May, these investors once again named Poland the most attractive investment destination in Central and Eastern Europe.

Investors trust Poland primarily because of the good performance of its economy, the only EU economy to have escaped recession last year. Some economists believe that one of the factors that saved Poland from the global crisis was that the country remained outside the eurozone. The Polish zloty has proved to be a good currency for the economic crisis, whereas the euro is not necessarily a remedy, as shown by what has been going on in Greece and, to an extent, also in Portugal and Spain. Growing numbers of people in Poland seem to share this view. The percentage of those who would welcome a swift adoption of the euro fell from an all-time high of 55.2 percent in April 2009 to 42.2 percent this April.

The nearest realistic date for Poland to enter the eurozone seems to be 2015, but Poland would have to redouble efforts to make it happen. The European Commission has said in its latest report that Poland fails to meet all euro convergence criteria required of candidate countries. These include inflation, government finance, the exchange rate, long-term interest rates, and legal regulations on the central bank. The zloty is thus sure to remain Poland’s legal tender for quite a few years to come.
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