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WARSAW STOCK EXCHANGE (WSE). Pawel Pretkiewicz MA1N0224. Warsaw Stock Exchange - History. Polish capital market traditions go back to 1817, when the Warsaw Mercantile Exchange was established.
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WARSAW STOCK EXCHANGE (WSE) PawelPretkiewicz MA1N0224
Warsaw Stock Exchange - History • Polish capital market traditions go back to 1817, when the Warsaw Mercantile Exchange was established. • On april 12, 1991 afteroverthrow of Poland’sformercomunistregimethe Warsaw Stock Exchange Company was established • WSE held its first trading session on April 16, 1991 with five listed companies, all of which were formerly State-owned companies that had been privatized. • In 1999, Poland reformed its pension system, which contributed to an increase in domestic institutional investment, and in 2004 it joined the EU. These developments helped to boost trading volume in subsequent years. • Warsaw Stock Exchange is the largest national stock exchange in the CEE and one of the fastest-growing exchanges in Europe.
Warsaw Stock Exchange (WSE) • Instruments such as shares, bonds and various derivative products can all be traded electronically on this exchange. • WSE runs several markets: • Main Market (trade in equities, equity-related and other cash instruments, derivatives), • NewConnect(trade in equities and equity-related instruments of small and medium-sized enterprises), • Catalyst (trade in corporate, municipal, co-operative, Treasury and mortgage bonds operated by the WSE and BondSpot), • Treasury BondSpot Poland (wholesale trade in Treasury bonds operated by BondSpot). • According to FESE data, WSE market capitalisationattheend of October2013 was EUR 206 381 million
Main Stock Indexes • WIG20 Index of 20 companies with the highest capitalization, listed basedon top turnover) • mWIG40 Index of small and medium-sized companies • WIG Warsaw Stock Exchange Index, which includes shares of companies whose total market value is 99% of the main market • TechWIG Price index includes companies qualified for the Technologies Segment • sWIG80 Index of thesmallestlistedcompanies • NIF National Investment FundsIndex • Sectorsubindexes(ex. WIG-Banks, WIG-Media)
WSE key success factors • Strong market institutions and regulations • Pension funds in Poland invest up to 40% of their assets in equities of the companies listed on the regulated market • Largeindividualinvestorbase • Privatisation of the biggest state-owned enterprises through an IPO • Relatively large internal market • Ability to compete with London and otherexchangesfor the biggest CEE companies • Poland’s resilient economy
Table 1: Increases in share prices during the a bull market from 1993 to 1994
Privatisation through the Warsaw Stock Exchange (WSE) • Ciech, KGHM, PKN Orlen, PKO BP, PZU, ….. • Interestingexampleswhere the Treasury managedto: • increase management effectivenessthroughprivatisation • reduce the Treasury’s ownership below 50% • ensure high free float • retain control over the strategically important companies • ensure high transparency • As a result of the privatisation process: • The WSE helped the Treasury privatise companies • TheTreasury helped theWSE increase its capitalisation and attract domestic and foreign investors
Treasury’s ownership of selected companies privatised through the WSE
Privatisation of the largest banks in Poland Source: nbp.pl