The year of the booming bourse
According to recent signals from the Ministry of Treasury, which owns 98.8 percent of the bourse, the privatization of the WSE could be finished as soon as June 2005. Although no privatization advisor has yet been picked, the choice will be made in January 2005. The Treasury Minister, Jacek Socha, is adamant that the government should look for a large strategic investor. In his opinion, selling out to many small speculators would put the financial market in jeopardy. However, the chances of the operation ending before the early spring elections are slim.
"Should there be a new government, this process may be delayed," says the vice-president of the WSE, Piotr Szeliga. While conscious of the fact that old administrative procedures are time consuming, Szeliga is "realistic" about the ambitious privitization plan, which was recently revised. The latest statements from the Ministry mention September 2005, rather than early spring.
Whether the privatization becomes a reality in six months or not, everyone agrees it is necessary. "Standing aside in the long term makes no sense," says Marcin Sadlej of CA IB, because modern bourses must consolidate to survive and, as vice-president Szeliga adds: "It's the private entities that consolidate."
Officials from the Polish bourse refrain from discussing the 'geographical' details and naming their preferred international partners, but some wish lists occasionally crop up. Minister Socha claims that cooperation with American stock exchanges would be the clear choice, as the WSE's modus operandi is similar to the US exchanges. According to analysts this is not a realistic option, mostly due to a lack of interest from the American side. On the European market, some point north to the association of Nordic and Baltic state bourses and another idea doing the rounds is the creation of one central and eastern European bourse under Warsaw rule. And, of course, the idea of merging with one of the key Western players (Frankfurt, Euronext, London) is ever present. On December 13, the London Stock Exchange rejected a $2.49 (zł.7.86) billion offer posted by Deutsche Börse that would have allowed the two markets to merge. On the other hand, Euronext, a pan-European initiative of the Paris, Amsterdam, Brussels and Lisbon markets, shows that consolidation looms large over the trading floors.
As the year ends, the WSE will inevitably outrun the Vienna bourse and become the region's largest market in terms of assets, with market capitalization above zł.204 billion. The WSE's assets are around 23-24 percent of GDP. In Europe this relationship is usually around 60 percent, so, even assuming there is no GDP growth, the bourse still has the prospect of tripling its capital.
"Poland, thanks to a rise in investments and a revival in domestic consumption and EU transfers, will sustain high growth in the next few years," says Tomasz Mazurczak, director of the institutional sales department and analysis at the investment arm of BRE Bank SA.
Foreign bourses will no doubt watch the WSE's privatization with interest, as consolidation cannot be far behind it, and many believe it is economically necessary. As Marcin Sadlej from CA IB says: "The business model of a stock market determines that the largest share of costs is generated by IT, so a bourse that is twice as large does not costs twice as much."
"Should there be a new government, this process may be delayed," says the vice-president of the WSE, Piotr Szeliga. While conscious of the fact that old administrative procedures are time consuming, Szeliga is "realistic" about the ambitious privitization plan, which was recently revised. The latest statements from the Ministry mention September 2005, rather than early spring.
Whether the privatization becomes a reality in six months or not, everyone agrees it is necessary. "Standing aside in the long term makes no sense," says Marcin Sadlej of CA IB, because modern bourses must consolidate to survive and, as vice-president Szeliga adds: "It's the private entities that consolidate."
Officials from the Polish bourse refrain from discussing the 'geographical' details and naming their preferred international partners, but some wish lists occasionally crop up. Minister Socha claims that cooperation with American stock exchanges would be the clear choice, as the WSE's modus operandi is similar to the US exchanges. According to analysts this is not a realistic option, mostly due to a lack of interest from the American side. On the European market, some point north to the association of Nordic and Baltic state bourses and another idea doing the rounds is the creation of one central and eastern European bourse under Warsaw rule. And, of course, the idea of merging with one of the key Western players (Frankfurt, Euronext, London) is ever present. On December 13, the London Stock Exchange rejected a $2.49 (zł.7.86) billion offer posted by Deutsche Börse that would have allowed the two markets to merge. On the other hand, Euronext, a pan-European initiative of the Paris, Amsterdam, Brussels and Lisbon markets, shows that consolidation looms large over the trading floors.
As the year ends, the WSE will inevitably outrun the Vienna bourse and become the region's largest market in terms of assets, with market capitalization above zł.204 billion. The WSE's assets are around 23-24 percent of GDP. In Europe this relationship is usually around 60 percent, so, even assuming there is no GDP growth, the bourse still has the prospect of tripling its capital.
"Poland, thanks to a rise in investments and a revival in domestic consumption and EU transfers, will sustain high growth in the next few years," says Tomasz Mazurczak, director of the institutional sales department and analysis at the investment arm of BRE Bank SA.
Foreign bourses will no doubt watch the WSE's privatization with interest, as consolidation cannot be far behind it, and many believe it is economically necessary. As Marcin Sadlej from CA IB says: "The business model of a stock market determines that the largest share of costs is generated by IT, so a bourse that is twice as large does not costs twice as much."
