Adam Maciejewski, president of the Warsaw Stock Exchange (WSE), talks to Andrzej Jonas and Andrzej Ratajczyk.

Last year saw considerable volatility on many European stock markets, with indexes alternately dropping and bouncing back sharply. Do you think the same situation will repeat itself this year? Or will more stability return to European trading floors?

I expect that European capital markets will be relatively stable this year and that stock-market operators will be taking measures to increase the activity of investors. The structural changes which have recently taken place in Europe in terms of organizing trading markets for financial instruments, coupled with changes in the economic situation, have resulted in some markets losing much of their liquidity. And now, one of the main challenges the operators are facing is to restore liquidity to the market. I am an optimist by nature. This is why I predict that market activity will be higher this year. The revival will be slow, but it will be there.

How do you assess the prospects of Poland’s stock market?

Last year, the Polish stock market recovered, which is proven by the stock market indexes rising by 20-30 percent. This indeed was a big increase. As regards the sales volume, the situation was worse because the volume shrank a little. Additionally, there were some changes to the structure of trading. Investors focused on the largest and most liquid companies while somewhat “neglecting” smaller companies. As for the prospects of the Polish market, it seems that investors expect an improvement in the situation, as evidenced by the rising indexes. However, stock valuations and the volume of trading will depend not only on the situation in Poland in the coming months, but also on developments in Europe as a whole. And there, the situation is very volatile. We cannot be sure, for example, if the crisis will not hit another country in the near future. But if nothing unpredictable happens I believe optimism will return to most European markets.

Which factor has a stronger influence on the WSE now: the situation on global capital markets or the macroeconomic situation in Poland and Europe?

It is difficult to give a clear-cut answer to this question. There are moments when it is the external conditions that determine the developments on the Polish capital market. But sometimes it is internal macroeconomic factors that influence the situation on the market. It seems, however, that at present external conditions have a stronger impact on what is happening on the WSE.

Your predecessor in the post of WSE president promoted the idea of creating a regional financial hub based on the WSE. Are you going to stick with the development strategy adopted by the previous management board?

That’s obvious. But this strategy needs to be modified a bit to become a part of an economic strategy for Poland. And it has to respond better to the changes that have taken place across the European Union. Additionally, I think the development strategy should be carried out more effectively and dynamically than has been the case so far and with slightly different methods.

The stock exchange reflects the ongoing economic processes rather than creating them. On the other hand, it creates mechanisms that may help the economy grow. I think in Poland these mechanisms are still not effective enough and this has to change. I would like the services provided to Polish businesses by the stock exchange and the capital market as a whole to be effective and cheap.

Can the costs of these services be reduced without harming their quality and the level of security?

This is by all means possible if several conditions are met. The size of the market is one of the key conditions enabling cost cuts. With significant inflexible costs, the volume of trading on the market has to grow if handling fees are to be reduced. Meanwhile, last year, for instance, the volume of trading on the WSE shrank despite a rise in the number of listed companies. In this situation, the only option is to streamline the costs.

A well-devised strategy that clearly assigns roles and tasks may be helpful in achieving the main goal, which is to offer effective services. So far we have been dealing with a vision rather than a strategy. Moreover, it is necessary to decide what character the stock exchange should have. Should it be an infrastructure institution or a commercial company? Today, the stock exchange is in a sense in structural conflict because it is a joint-stock company and at the same time a component of the market infrastructure and as such has to reconcile the interests of various groups. On the one hand, we have brokers and investors who want a reduction in service costs. On the other hand, we have stockholders who are interested in maximizing their profits. In Europe, most stock-exchange operators are commercial institutions. This trend leads to healthy behaviors aimed at achieving the highest possible efficiency and better performance. This is why stock exchanges form alliances, share their technological infrastructure and achieve higher efficiency through cost synergy. The situation where we have two conflicting priorities is difficult for the exchange and I think that WSE shareholders ought to make a decision as soon as possible about what the ultimate model of the market should be.


The full interview will appear in the March issue of The WarsawVoice.