The Warsaw Stock Exchange (Giełda Papierów Wartościowych w Warszawie) was formed in the wake of communism in April of 1991. Since that time Poland has become a member of the EU, NATO, WTO and the OECD and was the first post-communist country to reach pre-1989 economic levels.
The economy of Poland is the sixth largest economy in the EU and the largest among the former Eastern Bloc members. Poles are increasingly returning home from working in other European countries and bringing with them capital, knowledge in business practices and languages as well as a strong network of global connections. This is creating additional growth in an already developed and robust economy.
Polish stock market
With roots in the former Warsaw Mercantile Exchange, founded in 1817, the Warsaw Stock Exchange (WSE:GPW) currently has 460 listings with 410 being domestic and 50 foreign companies. The most recent market capitalization data is listed as 1.074,732.92 (million) PLN. The WSE offers multiple instruments for investing in Poland such as:
- Subscription Rights
- Derivatives (Futures, Options, Index Participation Units)
The WSE is the most recent addition to the FTSE Russel list of economically developed markets, being the first country in almost a decade to be promoted from Emerging Market status in 2018. It joins the ranks with the 25 other most advanced global economies and has the enviable title of the fastest growing in the group. This indicates that it has demonstrated all the requirements of a developed market including advanced trading infrastructure, security and fully developed post-trade services.
Poland's stock market outlook
Ranked 38thin the annual IMD world competitiveness rankings in 2019, Poland has positioned itself as a fast growing and secure investment market.
According to the most recent Moody’s report Poland’s economy is stable and should prove more resilient than average in the face of any upcoming global downturns. The Polish economy is projected to grow by 4.4% in 2019 and 3.7% in 2020 by major economic thinktanks.
The Warsaw Stock Exchange (WSE) was an early member of the United Nations Sustainable Stock Exchange (SSE) initiative which is dedicated to promoting environmentally stable growth globally. Members are invited to make a voluntary commitment to promote improved environmental disclosure among companies listed on their exchange and promote the benefits of environmentally sustainable economic growth.
Benefits & risks of investing in Poland
Poland is currently the 6thlargest economy in the EU and is a modern diversified economy. It has been assigned a stable and favourable outlook by S&P for this reason as well as its highly educated workforce, manageable levels of public/private debt and continuing to increase tax collection efficiency. Poland has demonstrated strong financial performance and significant growth in the past decade and is the highest performing economy of all Eastern European post-Communist countries.
As with other countries in the EU there is some uncertainty how Brexit will affect the Polish economy in the short term. Polish people make up the largest nationality within the UK and number +1.1 million. They have gradually been returning home to seek opportunity due to the growing Polish economy, however a sudden influx of returning Poles could disrupt the current growth.
Trade US Dollar / Polish Zloty CFD
The main indices of the WSE are heavily laden in legacy companies such as banks, utilities and oil and gas which does present some long-term insecurities. The economy has been modernising and diversifying away from traditional sectors recently, although these emerging industries still make up a small proportion of the overall economy.
WIG20 stock market index
The WIG20 is a Warsaw stock exchange index and is based on the value of the 20 largest and most highly traded companies on the WSE. The initial value of WIG20 index was 1000 points established on April 16, 1994, and currently at 2187 points.
The WIG20 index may not include more than 5 companies from a single exchange sector and no single company can account for more than 15% of the total value.
Poland is a robust and diversified economy that is full of potential while maintaining the security and accountability of an EU country. Located in the fast-growing Eastern European region and predicted to outperform other European economies in the near future, the Warsaw Stock Exchange is a viable and attractive option for anyone looking to invest in Poland.