Has the Warsaw stock market all but run out of steam?

Low liquidity of shares, partly caused by pension funds buying all the shares they can, has meant the shrinking bourse has largely shrugged off the Iraq war, but analysts fear for the long-term health of the exchange. The pension funds receive around zł. 600 million in cash each month. They typically invest about a quarter in Warsaw's zł. 100 billion stock market where low liquidity forces them to pursue a "buy and hold" strategy. By the end of February, the average asset allocation of the top ten pension funds was 68.1% in treasuries, 24.5% in equities and the rest in cash. "We don't react as strongly as other Europeans do because our market is dying. Nothing's happening - only the funds are left," said a manager with one of the largest funds. He added, "At the moment the funds have about 20% of the free float, and in two years it will be 50%." (Reuters) M.M.