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The Warsaw Voice » Business » August 2, 2010
Business & Economy
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WSE Teams Up With NYSE Euronext
August 2, 2010   
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The Warsaw Stock Exchange signed a strategic, long-term cooperation deal with NYSE Euronext (NYX), a leading global operator of financial markets and provider of innovative trading technologies, in mid-July to “develop mutually beneficial business initiatives and the migration of WSE markets to the NYSE Technologies Universal Trading Platform.”

The partnership between the WSE and NYSE Euronext is expected to contribute to strengthening the position of the Polish exchange in Central and Eastern Europe and attract more foreign companies to the WSE.

The NYSE Euronext exchanges in Europe and the United States trade in equities, futures, options, debt securities and other exchange-traded instruments. NYSE Euronext’s equity markets—New York Stock Exchange, NYSE Euronext, NYSE Amex, NYSE Alternext, and NYSE Arca—list around 8,000 issues, excluding European structured products, and generate one-third of the world’s equity trading.

Under the multi-year agreement, NYSE Euronext will give the WSE’s cash and derivative markets access to the Universal Trading Platform. In their joint announcement, the two parties said they would explore new trading, market data and business development initiatives serving investors and issuers of a wide range of financial instruments.

NYSE Technologies, the commercial technology unit of NYSE Euronext, will work with the WSE to develop new IT-based opportunities in Poland and the Central and Eastern European region as a whole.

Stronger position
“The undertaking we are now starting with NYSE Euronext is, without any doubt, one of the most significant moves aimed at developing the WSE further as an international market place,” said Ludwik Sobolewski, the WSE president. “It is a direct consequence of the strategy adopted and implemented by the WSE board in recent years. We are at the very beginning as regards the strategic partnership, but this beginning comes at a very appropriate moment, complementing other, already much more advanced endeavors.”

The strategic partnership with NYSE Euronext should further strengthen the position of the Warsaw exchange in Europe. The latest data released by the Federation of European Stock Exchanges (FESE) at the end of the first half of the year show that the WSE’s advantage over the remaining stock markets in Central-Eastern and Southern Europe is growing. The value of domestic companies listed on the WSE is 115 billion euros. It is 55 percent higher than the value of companies listed on the Vienna exchange and more than twice as high than the value of companies on the Athens exchange.

The advantage of the CEE Stock Exchange Group alliance over the WSE in terms of capitalization diminished by more than one-third in the past two months, falling from 31 billion euros at the end of April to 19 billion euros at the end of June. The WSE has also recorded increasingly high turnover. In the first half of the year, the value of equities traded on the WSE was 28 percent higher than in Athens and 37 percent higher than in Vienna.

WSE more attractive
The WSE’s growing attractiveness is also proven by its position on the European IPO market. In the second quarter, the WSE was Europe’s second largest market in terms of the number and value of IPOs, according to the latest IPO Watch Europe report published by the professional services firm PricewaterhouseCoopers.

In the second quarter, London was again the leading European exchange, in terms of both the total number of IPOs, at 27 against 24 in the first quarter, and their total value, at more than 3.2 billion euros against just over 2.1 billion euros in the first quarter. IPOs listed on this market accounted for 36 percent of all European IPOs in the second quarter in terms of value and 30 percent in terms of number. The WSE was ranked just behind London, with 25 IPOs worth nearly 3.2 billion euros, which represented a major improvement on the first quarter when 15 IPOs worth only 31 million euros in total were listed. Two companies controlled by the Treasury—the insurance group PZU and the energy group Tauron Polska Energia—were behind the high IPO value recorded on the WSE in the past three months. The two companies’ IPOs, with a combined value exceeding 3 billion euros, ranked as the first and fourth largest European IPOs in that period.

The IPO of PZU, Poland’s biggest insurance group, was worth almost 2 billion euros and was the largest IPO on the WSE ever. To compare, another large IPO, that of the PKO BP bank in the fourth quarter of 2004, was worth less than 1.8 billion euros.

The IPO of Tauron Polska Energia, worth more than 1 billion euros, was the second largest IPO on the WSE in the second quarter. Kulczyk Oil Ventures based in Canada ranked third with an IPO value of 79 million euros. And companies which debuted in the second quarter on the NewConnect alternative market raised a total of 11 million euros.

“Our earlier forecasts predicting that activity on the Warsaw IPO market would increase proved correct,” said Jacek Socha, vice-president of the Polish subsidiary of PricewaterhouseCoopers. “After a weak beginning of the year, we saw a marked recovery in the second quarter, mainly driven by the IPOs of PZU and Tauron Polska Energia. One should stress the mass participation of private investors in both IPOs. It may be expected that planned privatization deals, including the WSE’s own IPO, will also attract much interest. On the other hand, the significant volatility of stock market indices, caused by the economic problems experienced by eurozone countries and uncertainty among investors, provide a reason for concern. This is why not all companies in Europe and Poland have raised this year as much from their IPOs as they had expected. However, Warsaw’s second place on the list of European exchanges in terms of the total number of IPOs and their value indicates that our market has huge potential.”
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