Investors likely to desert the WSE in early 2004

The introduction of the capital gains tax on January 1, 2004 might negatively affect the financial standing of the Warsaw Stock Exchange (WSE). Representatives of the bourse do not hide their discontent with the fact that the Senate did not delay the introduction of the new tax. "Taking into consideration that turnover fell by 50% when a similar tax was imposed on stock exchanges in Budapest and Tel-Aviv, we expect that in the first quarter of 2004 the turnover on the Warsaw bourse might drop by up to 30%," forecasts WSE's deputy chairman Piotr Szeliga. According to Szeliga, over 60% of WSE's total revenues and about 80% of its sales revenues come from floor transactions. Even if the turnover drops by only 20%, then the operating profit will fall by over zł. 11 million. (Parkiet, p. 1) M.M.