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The Warsaw Voice » Business » November 30, 2010
Business & Economy
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Warsaw: CEE’s Financial Hub
November 30, 2010   
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The successful privatization of the Warsaw Stock Exchange has consolidated Warsaw’s drive to be a key financial center for Central and Eastern Europe.

Warsaw is considered one of the most attractive business locations in Europe and in many respects, the Warsaw Stock Exchange (WSE) ranks as the largest stock market in the region. These and other factors may soon turn Warsaw into the financial hub of this part of Europe. To begin with, Warsaw benefits significantly from its geographical and geopolitical location. With a population of 1.7 million, it is the largest capital city in new EU member states and most of its inhabitants are young and well-educated. Warsaw is home to the most important financial institutions and authorities, bank headquarters and branches of foreign companies.

Investors would not probably be that interested in Warsaw if it had not been for the rapidly developing Polish economy. Last year, Poland was the only EU member state to avoid recession and all indications are this year it will be one of the fastest-growing economies in Europe.

The key element turning Warsaw into Central Europe’s financial hub is the Warsaw Stock Exchange, which in many respects has evolved into the largest stock market in the region and even topped European statistics for the number of company debuts in the third quarter. Boasting very high capitalization of listed companies, a high trading volume and a wide range of listed instruments, the exchange stands as one of Central Europe’s most developed markets in terms of organizational and technological structure.

The main market currently lists 394 companies, including 25 foreign ones, whose total capitalization approximates zl.800 billion. Apart from the main market, companies and investors can trade at the stock exchange’s NewConnect market which has so far drawn 172 companies with a total capitalization of almost zl.5 billion. New foreign companies on the bourse and the advent of remote members will consolidate its status as a stock market of international range.

As it builds a strong international position, the Warsaw Stock Exchange benefits from its partnership with NYSE Euronext. In mid-July, NYSE Euronext and the Warsaw Stock Exchange announced they have initiated a strategic, long-term partnership to work out business initiatives to benefit both parties and prepare for the migration of the exchange’s transaction platform to the NYSE Technologies Universal Trading Platform (UTP). The partnership should help the Warsaw Stock Exchange grow, as NYSE Euronext is a leading global business managing financial markets and sharing innovative trading technology.

As part of the long-term contract, NYSE Euronext will share the UTP platform with the Warsaw Stock Exchange cash and derivatives markets. Both parties will also consider new ideas regarding trading, data distribution and business development to benefit investors and issuers by providing them with a wide range of financial instruments. According to Ludwik Sobolewski, president of the Warsaw Stock Exchange management board, the partnership with NYSE Euronext is one of the most important steps in the bourse’s evolution into an international market.

Building a regional financial hub around the WSE is a goal which the exchange’s managers share with the Polish government. “It is the Polish government’s objective to turn the Warsaw Stock Exchange and Warsaw itself into the financial hub of Central and Eastern Europe,” said Treasury Minister Aleksander Grad.

Among factors that encourage foreign issuers to sell shares in Poland are a large, stable and diversified pool of investors, which guarantees readily available capital. This condition promises successful debuts and attractive stock prices during the initial public offering at the exchange, and later on. Bourse managers want as many enterprises in Central and Eastern Europe as possible to obtain capital through Warsaw.

Investors are also drawn to Poland and Warsaw by the stable Polish economy, which kept in positive territory in 2009 despite the recent turbulence on global financial markets. The good economic situation was also fostered by the highest transfers of EU funds in the region and the preparations for the Euro 2012 European soccer championships, which will take place in Poland and Ukraine. The championships have given Poland a powerful development boost, because apart from sports venues, the Euro 2012 organization involves immense investment in infrastructure, including roads, airports and hotels. A part of it all is happening in Warsaw.

Warsaw’s prospects of becoming the regional financial hub will be discussed at the third Warsaw-CEE Financial Hub conference Nov. 29 at the Warsaw Stock Exchange building. The conference, organized by The Warsaw Voice, International Herald Tribune and the Warsaw Stock Exchange with help from the Warsaw city administration, will be attended by government officials, Warsaw authorities, the managers of the exchange and other financial institutions, experts, investors and issuers.
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