WSE remains dwarf among the world's stock exchanges: expert

The Polish stock exchange is small among the world's stock exchanges. Its share in the capitalization of all global stock markets is only 0.35 percent. The US stock exchanges are in the lead in this respect, accounting for 55.9 percent of world capitalization. The next markets are Japan, whose share is 7.4 percent, and China with a share of 5.4 percent. The stock exchanges in Europe are only next in line. The share of stock exchanges from Great Britain is 4.1 percent, from France – 2.9 percent, and from Germany and Switzerland, 2.6 percent each.

"The capitalization of the Warsaw stock exchange is currently PLN 1.16 trillion, while the capitalization of the American stock exchanges NYSE, Nasdaq, and others is PLN 187.10 trillion. The size of the Warsaw stock exchange is determined by the size of our economy, but also by the importance of the stock exchange for the economy," Paweł Majtkowski, an analyst at eToro, said.

The capitalization of the stock exchanges in the US is currently 199.3 percent of US GDP. How is it possible that the stock market is bigger than the economy of the country in which it is located?

"This is nothing extraordinary because many foreign companies are listed on the stock exchanges. The capitalization of the stock exchange in Warsaw currently amounts to 50.1 percent of GDP. Companies based in Poland account for 51 percent of this value, and foreign companies for 49 percent. There is a high probability that after the Pepco Group's debut on May 26, this ratio will change in favor of foreign companies," Majtkowski added.

In his opinion, the capitalization statistics of global stock exchanges should be compared to one's own investment portfolio.

"If it is built only from stocks listed in Warsaw, then we have to be aware that 99.65 percent of the value of the global stock market is missing us. It is also difficult to consider such a portfolio as properly diversified," an eToro analyst said.

(WBJ)