Accelerating exchange

In the year to August 6, the WSE has seen new 42 IPOs - four more than during the whole of 2006 - and the total value of these debuts reached over zł.16 billion. To put this in perspective, in Europe only the London Stock Exchange saw more debuts in Q2 than the Warsaw bourse, with the former welcoming 36 new firms and 20 joining the latter.

The growing number of listed firms is naturally accompanied by an increasing amount of capital. This May saw the largest debut in the WSE's history - Austrian real-estate firm Immoeast's entrance to the exchange was worth zł.10.7 billion, although less that half was available for Polish investors. The WSE's second- and third-largest debuts also occurred this year, with LC Corp issuing shares worth over zł.1 billion in June and JW Construction issuing shares worth zł.777 million in July.

Still, the WSE remains behind the biggest European bourses in terms of cash flow. "Most of the companies floating are domestic, and started from scratch about 15-20 years ago. Thus, they have relatively little capital," explained Lidia Adamska, a member of the WSE's management board. She added that the capitalization and liquidity would increase if a greater number of privatized companies were floated on the bourse.

Foreign capital

International firms are also attractive prospects for the WSE and, in turn, these firms are more often turning to the bourse to raise funds for operations in the CEE region. As of August 6, the total number of companies listed on the exchange was 317, of which 16 were of foreign origin.

"The WSE is larger than other CEE bourses, which means it has more institutions and more expertise," said Constantinos Tziamalis, the director of credit and investor relations at the Cyprus-based Asbis, an LSE-listed distributor of IT components that will debut on the WSE in autumn.

"For us, a company operating in the CEE region and Russia, the WSE was the best place since it involves funds from that area," explained Tziamalis. He declined to comment on the value of Asbis' forthcoming debut, however.

Domestic dominance

Regardless of growing interest among foreign firms, domestic IPOs prevail. Recent debuts have included cable-producer Mercor (July 19) and developers ABM Solid (July 24) and Pol-Aqua (July 30). One of the next to debut will be upmarket grocer PPH Bomi, which expects to get around zł.43 million from its IPO. These funds will go to modernize the firm's current network of 21 stores and add a further 17 outlets by 2009. August will also see listings from Quantum Software, Resbud and others.

Offering alternatives

For those companies which have strong growth potential, but are too small or are perceived as too risky to debut on the main exchange, the WSE is launching an alternative trading platform called New Connect at the end of August. Here, the listing procedure will be faster and simpler, and Adamska expects about 10 companies to join this platform within a few weeks of its launch. As for WSE debuts, she expects 2007 to bring over 70 in total, 10 more than previously forecast.