Warsaw’s WIG20 blue-chip stock index is 25 years old this year, but while it is trading off its 2009 low point, it has some way to go to scale its previous peak.
The index was launched in April 1994, shortly after the seismic events of 1989 that brought ‘The Iron Curtain’ down on Communist regimes in eastern Europe, including that in Poland.
Its base value was set at 1,000 at launch, and it quickly went to a premium, trading at 1,050.50.
Europe’s top footwear retailer
During the great boom of the first decade of the current century, the index rose to a high point of 3,891.31 on 25 October 2007.
But by that point, the credit crunch had struck and asset prices across the world were starting to fall.
The WIG20 began a long slide down to a low point of 1,372.47 on 1 February 2009.
In the year to date, the WIG20 has done very little. On 2 January, it stood at 2,301.62 and is currently trading at 2,285.73.
The index contains a wide spread of businesses, as is to be expected given Poland’s unofficial position as one of the European Union’s “big six”, alongside Group of Seven members Britain, France, German and Italy, plus Spain.
Energy companies include Tauron Polska Energia, while financial institutions include Powszechny Zaklad Ubezpieczen and Alior Bank, which is described as “a universal lender offering loans and deposits to individuals, legal entities and other domestic and institutional clients”.
Also in the financial sector, Powszechna Kasa Oszczednosci Bank Polski is described as “one of the largest financial institutions in Poland”, while mBank SA is “a universal bank which serves corporate, institutional and retail clients”.
From the online entertainment segment is video games company CD Projekt SA, and Dino Polska SA runs a chain of 600 supermarkets.
Warning on State control of finance
The biggest copper ore deposit in Europe is one of the assets of miner and copper-ore producer KGHM Polska Miedz, which holds also rights to mine in the US, Canada and Chile.
Orange Polska “is the leading provider of telecommunications services in Poland”.
But it warned: “Slowing external demand…is projected to moderate real GDP [gross domestic product] growth in 2019, while medium-term prospects are more subdued against a shrinking working-age population, modest private investment and tepid productivity gains. Increased State control of the financial sector raises challenges for sound supervision, and a larger State footprint in the economy could slow productivity growth.”
Poland is obliged to join the single currency, the euro, at some point, but shows little sign of doing so.