Polish assets heavily underestimated: an analysis
23:45
From the analysis of the Polish market prepared for the Seeking Alpha portal, we learn that it is worth considering Poland when building your international portfolio of assets.
Among the strengths of Poland, the author of the analysis took into account, in his opinion, the undervaluation of the Polish currency. In his opinion, the dollar is currently overvalued in relation to the zloty, and the Polish currency shows the potential to increase the rate on a scale of 22-115 percent.
"Investors do not have to worry that they are investing their funds in risky assets from the point of view of the currency markets. On the contrary, the zloty looks attractive both from an internal valuation and forex perspective," the analysis reads.
Moreover, Poland has recently boasted both significant current account surpluses and growing foreign exchange reserves.
The analysis also highlights a strong rebound in the results of Polish GDP in 2020 after the outbreak of the crisis related to the coronavirus epidemic – despite the fact that in Q2 the GDP reading was as much as 8.4 percent lower than in the corresponding period of the previous year, the fall in GDP in the next quarter was only 1.5 percent y/y.
However, the risks associated with investing in Polish assets are also important. One of them is the brain drain – i.e. the process of young and talented employees leaving abroad in search of more attractive offers. The second, in turn, is political.
"Trust in the Polish government is not extremely strong," the study reads.
