The WSE is co-developing a new strategy for the capital market. The strategy will aim to make the capital market and the Warsaw Stock Exchange more attractive

For the Warsaw Stock Exchange, the last year was successful in terms of IPOs, index performance and financial results, WSE representatives said with emphasis. However, the Warsaw floor wants to establish itself as the first-choice source of financing for investors. To this end, it has been working with the Ministry of Finance on the Capital Market Development Strategy in alignment with the Strategy for Responsible Development.

 “The economic outlook is very good. The macroeconomic environment, the willingness to invest – this is essentially what the capital market needs to thrive and our challenge is to meet these economic needs,” said Jacek Fotek, Vice-President of the Management Board, the Warsaw Stock Exchange. “With these objectives in mind, the WSE is working with the Government to launch the Capital Market Development Strategy in alignment with the Strategy for Responsible Development to provide the appropriate infrastructure for the financial market to be able to finance development-oriented and ambitious economic goals.”

The strategy will be co-developed by the European Bank for Reconstruction and Development. The work on it began in January 2018 and the strategy is expected to be ready by the end of 2018. The strategy will comprise three parts – the first will analyse the problems of the Polish capital market, the second will provide a set of recommendations on how to tackle these problems, and the last part will contain the actual strategy, setting out long-term objectives for WSE’s advancement.

 “Our biggest challenge is to make sure these positive trends continue and to come up with strategic and development plans that will help to keep up these trends in the long term, and to pursue WSE’s mission to become the first-choice source of capital for investors, whether as stock or as debt instruments,” WSE’s Vice-President stated.

The year 2017 was good for global stock exchanges. Over 2017 the total stock trading volume on WSE’s main market increased by 28.9 percent y/y to reach PLN 260.98 bn. The total market capitalisation of WSE-listed companies went up to nearly PLN 1.38 bn, compared to PLN 1.12 bn a year before. Among major upward-trending indexes, WIG20 came fifth in Europe behind Ukraine, Turkey, Germany and Latvia. The index of the broad WSE market came close to hitting the all-time record of July 2007. The American market, which has a key influence on market sentiment, hit record after record. This year, WSE’s Vice-President is expecting a minor adjustment.

 “Where there are good economic conditions, there is always willingness to invest. Institutional and private investors take into account the market situation and business-cycle indices. Looking at the internal trends, we’re in a very good phase of the economic cycle. So, 2018 gives us all reason to be optimistic,” Jacek Fotek explained. “However, the global factors and market appraisals can give us mixed signals. We’re expecting 2018 to be affected by certain consolidation and adjustment trends, but as a stock exchange, we won’t be delving into more detailed projections.”

A total of 34 companies, including 15 companies on the Main Market, launched on the Main Market and NewConnect on the Warsaw Stock Exchange last year. We had some big-time launches, such as Play Communications in July (almost PLN 4.4 bn) and Dino Polska in April (PL 1.65 bn). Jacek Fotek emphasised that in terms of the number of IPOs, the WSE was the third stock exchange in Europe. But it is not the number of launches that counts the most.

 “What is of special importance for us is the market depth and the ability to absorb major issues. The year 2017 was an exceptional and record-breaking year in terms of both primary and secondary issues,” WSE’s Vice-President explained. “In terms of primary issues in 2017, we were eighth in Europe, which is a very good result. The Polish stock market recorded about PLN 7.7 bn worth of primary issues, which is better than the record we hit in 2011. Notably, all these projects were private issues, unlike in previous years, when privatisation projects were a big part of our results.”

In 2017 the Warsaw Stock Exchange had a record-breaking net profit of PLN 156.1 m. EBITDA increased to PLN 212.2 m, and sales revenues went up to PLN 352 m, meaning a 13.2 percent increase relative to 2016. Costs increased as well, primarily due to the MiFID2/MiFIR-related compliance costs.