WSE's offshore expansion
Now, the Warsaw Stock Exchange's (WSE) head, Ludwik Sobolewski, says a representative office of the stock exchange may soon be launched in Ukraine to facilitate contacts between the WSE and companies planning an IPO.
Last month Sobolewski announced that he expected two to four Ukrainian companies to debut on the Warsaw bourse before the end of the year, and during the Krynica Economic Forum he was boasting the advantages of being listed on the WSE.
Strength to strength
Among the advantages of the Warsaw bourse Sobolewski mentioned the balance between individual, institutional and foreign investors, and said that pension funds are a big and stable player on the WSE. He added that his stock exchange is a regional leader when it comes to the number of debuts, with 35 IPOs in 2005.
"Statistics are a bit weaker when it comes to the value of IPOs, but this is also an advantage as it proves that the WSE is perceived as a good place to obtain capital by small and medium-sized enterprises, and public offers of relatively low value are also popular among investors," Sobolewski said.
Sobolewski believes that in 2006 the number of debuts on the WSE will exceed 30. However, he is less certain about foreign debuts. "We'll see. It's a long process. We are working on the debut of a Slovak company because there are some regulatory and legal barriers in Slovakia which make that kind of debut difficult. And currently it is essential for us to mark our constant presence on such markets as Ukraine, Lithuania and Slovakia," he told WBJ.
No regrets
So far four Ukrainian companies have listed their shares on the London-based AIM while another - Astarta Kiev - opted for the WSE. Astarta's CEO seems not to regret the move. "A month after our debut I'm even more convinced that we made the right step. Polish investors understand well the complexity and specificity of our business. Plus, the flight from Kiev to Warsaw is shorter than to London," joked Victor Ivanchyk.
According to Marek Zuber, chief economist at IDMSA, the WSE is especially attractive to firms operating outside the European Union.
"The WSE is a great place for companies from Ukraine or other non-EU countries - it increases the transparency of the firm, especially when it is listed on a market within the EU, and makes it much easier for them to attract foreign investors. It is also a great marketing stunt," he said.
Regional hub
Former President of the Warsaw bourse, Wiesław Rozłucki, is very much in favor of opening up to foreign firms and believes a regional financial center could emerge around the Warsaw bourse if all institutions of the Polish capital market start to cooperate.
"The WSE could become a regional leader. A real Warsaw financial district could come into existence, but this requires all the related financial institutions to get engaged in the process - banks, auditing companies, brokers, and also the state. AIM benefits from immense tax breaks. Why can't our government think about this?" asks Rozłucki.
The FTSE Group recently announced that Poland may rise a level in its Global Equity Index countries classification from Secondary Emerging Markets to Advanced Emerging Markets. The Polish equity market has been added to the waiting list and will undergo close observation over the next year. Hungary is the only other country in the CEE region that has made it onto the waiting list.
