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The Warsaw Voice » Business » November 25, 2011
Business & Economy
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Warsaw Stock Exchange as an International Trading Center
November 25, 2011   
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At a time when a financial crisis is spreading across Europe, the Warsaw Stock Exchange ranks number one in the continent in terms of the number of IPOs in the first three quarters of 2011, according to the latest IPO Watch Europe report published by PricewaterhouseCoopers. In total, 161 companies were newly listed on the WSE’s main market and on the NewConnect alternative market from the beginning of 2011 to the end of September. In the third quarter alone, there were 61 new listings in what was the best quarterly result in the history of the Warsaw Stock Exchange.

Also, the WSE ranks number two in Europe according to the value of IPOs in Q3 2011, ahead of even the London Stock Exchange Group and Deutsche Boerse, among other markets. What makes the WSE one of the fastest growing exchanges in Europe?

The Warsaw stock market is developing and strengthening its position in comparison to other exchanges in the region by ensuring attractive transactions and on account of its market liquidity and recognized brand.

The WSE also pursues regulatory and infrastructure initiatives enabling foreign companies to raise capital on the Warsaw market. Thanks to these constant efforts, businesses from 20 European countries, including Ukraine, Lithuania, the Czech Republic, Hungary, the Netherlands, Britain, Germany and France have decided to list their stocks in Warsaw, often as a primary market. As of October 2011, a total of 43 foreign companies were listed on the Warsaw Stock Exchange. Between July and September this year, the group of foreign companies listed in Warsaw grew to include the 11th Ukrainian listing, Coal Energy, registered in Luxembourg, along with the second Lithuanian listing, Agrowill, and the seventh foreign company listed on NewConnect, Avtech Aviation and Engineering of the United Kingdom. Other foreign companies are also thinking of growing by being listed in Warsaw.

The WSE has reasserted its status as a regional financial hub and this fact, together with the growing role of foreign capital on the stock market, attracts the attention of international capital market experts. Over 60 domestic and foreign brokerage member firms support trading in financial instruments on the Polish stock market, and the list of firms interested in working with the WSE is growing. Global investment firms with a presence in Poland include JP Morgan, Goldman Sachs, Merrill Lynch, Nomura, and Morgan Stanley. Nearly half of the WSE’s turnover is due to foreign investors, which is a clear message for potential issuers that they do not have to limit themselves to Western European stock exchanges.

Being listed on the WSE also ensures recognition by a wide range of institutional investors, such as pension funds and mutual funds, as well as numerous retail investors with an active interest in capital market investments.

Although the listing of equities is the most developed branch of the WSE’s activity, the Catalyst bond market is also increasingly important internationally. Issuers across Europe have become more interested in this alternative form of financing their businesses (Chart 3), and as a result, less than two years since it opened, Catalyst appears to be one of the leading bond markets in the CEE region. The value of session trading on Catalyst reached zl.940 million in the first three quarters of 2011.

The issue value of the listed series of fixed-income instruments (corporate bonds, municipal bonds, mortgage bonds) was zl.35.2 billion at the end of September 2011, marking an increase of 59.8 percent over the previous year.

There are also investment opportunities on the WSE’s derivatives market (trading index, single stock and currency futures, as well as options), where the volume of trading increased by 15 percent in October 2011 compared with a year earlier.

Capital knows no borders—this common truth is a key to the WSE’s international development strategy. In response to the changing needs of international capital market players, the Warsaw Stock Exchange keeps implementing new instruments and solutions. One of these is WIG-Ukraine, an index launched in May 2011 in response to the growing number of Ukrainian listings, but also with a view to giving investors another useful tool. A few months later, the WSE is just about to launch another index, the WIG Plus, and a number of other improvements are expected—all to provide clients with even better business opportunities. Do not miss the occasion to be part of our success.

Ludwik Sobolewski, President & CEO of the Warsaw Stock Exchange
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