International position of the WSE

A comparison with European stock exchanges in 2010 demonstrates a growing advantage of the WSE over other exchanges in the region while some parameters put the WSE on a part with the European leaders.

The year 2010 was a special time on the primary market. There were 34 IPOs on the WSE main market. The highlight of the year on the primary market was the IPO of the Warsaw Stock Exchange, dubbed the “IPO of two decades” due to the record-high interest of domestic and foreign investors in WSE shares. An indication of the strength of the Polish IPO market in 2010 were the successful listings of PZU, the largest IPO in the history of the Polish capital market, and Tauron Polska Energia, both ranking in the top 10 of European IPOs in 2010 (Table 2).

The Warsaw Stock Exchange has for years been a European leader by the number of IPOs. There were 105 new listings in 2007 and 94 in 2008. The number of IPOs in 2009 (39) was the highest in Europe. In 2010, 120 companies were debut listed on the WSE markets, including 34 on the WSE Main Market and 86 on NewConnect. The WSE ranked second in Europe by the number and the value of IPOs in 2010 according to the IPO Watch Europe report published by PricewaterhouseCoopers (Table 1).

Table 1. European IPO Market in 2010
European IPO Market in 2010
Exchange
Number of IPOs Value (€M)
LSE Group
123 12 650
WSE 112 3 808
Luxembourg
37 797
NYSE Euronext 32 417
OMX 24 2 029
Deutsche Boerse 24 2 413
Oslo Bors 16 2 445
BME 12 1 562
SIX Swiss 4 417
Wiener Boerse 1 38

Source: PwC, IPO Watch Europe, 2010 reports.

Table 2. The Biggest European IPOs in 2010
No.  Company IPO value (€M) Market
1 Enel Green Power  2 264  Italy and Spain
2 PZU  1 990  WSE
3 Essar Energy PLC  1 485  LSE Group
4 Gjensidige Forsikring  1 356  Oslo 
5 Amadeus  1 317  Grupa BME 
6 Pandora  1 227  OMX 
7 Tauron PE  1 026  WSE
8 Vallar  822 LSE Group
9 Kabel Deutschland Holding  660 Deutsche Boerse 
10 Brenntag  650 Deutsche Boerse 

Source: PricewaterhouseCoopers, IPO Watch Europe, Q1-4 2010 reports

The WSE has for years been an unparalleled leader in Central and Eastern Europe by the capitalisation of domestic companies. The WSE’s growing capitalisation is prominent both in the region and as compared to other European markets. (Figure 1)

Table 3. WSE v. Other European Markets
No. Exchange
Capitalisation of
domestic
stocks 2010
(EUR B)
Trading in
stocks in
2010 (EUR M,
single-counted)
Total number of
companies listed
at the end of
2010
1 LSE 2 237 1 759 654 2 341
2 NYSE Euronext 2 184 1 572 254 1 135
3 Deutsche Börse 1 066 1 425 757 765
4 SIX Swiss Exchange 917 610 215 296
5 BME (Spanish Exchanges) 873 1 250 427 3 345
6 NASDAQ OMX Nordic 777 612 378 754
7 Borsa Italiana 436 811 938 332
8 Oslo Børs 220 217 202 239
9 WSE 142 59 693 585
10 Vienna Stock Exchange 94 36 815 110
11 Luxembourg Stock Exchange 75 163 289
12 Athens Exchange 50 34 754 280
13 Irish Stock Exchange 45 22 706 59
14 Prague Stock Exchange 32 15 391 27
15 Budapest Stock Exchange 21 20 004 52
16 Bucharest Stock Exchange 10 704 69
17 Ljubljana Stock Exchange 7 361 72
18 Bulgarian Stock Exchange 5 281 390
19 Bratislava Stock Exchange 3 230 165
Total   9 194 8 452 935,73  

The shadowed lines represent CEE stock exchanges (except the WSE).

Capitalisation of the WSE

Source: FESE, at the end of 2010

Foreign Issuers on the WSE

The WSE is working to strengthen its position as a regional financial hub in Warsaw by pursuing active promotion and marketing activities in Central and Eastern Europe. The WSE takes regulatory and infrastructure initiatives, which enable foreign companies to raise capital on the trading floor in Warsaw. As a result, 30 foreign companies were listed on the WSE markets at the end of 2010, including 3 listings on the alternative market NewConnect. Their total capitalisation was over PLN 254 billion.

The WSE is steadily creating and reinforcing its competitive advantage over other stock exchanges in the region, which include the quality of trading, the liquidity of the market, the reliability of the trading system, and brand recognition. The market environment plays a very important role as it protects investors’ interests and facilitates access of foreign brokers and investors.

Table 6. Foreign Companies Listed on the WSE
No. Company
Country of origin
Sector
Primary exchange 
WSE Main Market - Dual listing
1 ATLASEST (2004) Israel
Developers
LSE
2 BMPAG (2004) Germany

Other finance
Deutsche Börse 
3 CEDC (2006) USA Wholesale
NASDAQ
4 CEZ (2006) Czech Republic

Energy
Prague SE
5 MOL (2004) Hungary
Fuel industry
Budapest SE
6 NEWWORLDR (2008) Czech Republic
Fuel industry
LSE
7 OLYMPIC (2007) Estonia Hotels and restaurants
NASDAQ OMX TALLINN
8 ORCOGROUP (2007) Luxembourg
Developers NYSE EURONEXT PARIS
9 PEGAS (2006) Czech Republic
Pharmaceutical
Prague SE
10 PLAZACNTR (2007) Israel Developers LSE
11 SILVANO (2007) Estonia
Retail
NASDAQ OMX TALLINN
12 SOBIESKI (2008) France
Food industry
NYSE EURONEXT PARIS
13 UNICREDIT (2007) Italy
Banks Borsa Italiana 
14 WARIMPEX (2007) Austria Developers Wiener Borse 
15 FORTUNA (2010)  Czech Republic
Other services
Prague SE 
WSE Main Market - Single listing
16 ACE (2007) Spain
Automotive WSE
17 ASBIS (2007) Cyprus IT WSE
18 ASSECOSLO (2006) Slovakia
IT WSE
19 ASTARTA (2006) Ukraine Przemysł spożywczy  WSE
20 CINEMA CITY (2006) Israel Media WSE
21 KERNEL (2007) Ukraine
Food industry
WSE
22 KULCZYK OIL INV. (2010) Canada Fuel industry WSE
23 REINHOLD (2007) Sweden Developers WSE
24 RONSON (2007) Israel  Developers WSE
25 AGROTON (2010)  Ukraine Food industry WSE
26 MILKILAND (2010)  Ukraine
Commodities
WSE
27 SADOVAYA (2010)  Ukraine
Fuel industry WSE
NewConnect - Dual listing
1 ICPD (2010)  Bułgaria Developers Bulgarian SE /
NewConnect
NewConnect - Single listing 
2 BGSENERGY (2009)  Czechy  Technology NewConnect 
3 PHOTON (2008)  Czechy  Technology NewConnect 

At the end of 2010, the WSE Main Market listed five companies from the important, promising Ukrainian market. Three Ukrainian companies: Agroton, Milkiland and Sadovaya, were listed in Q4 2010. The strong interest of Ukrainian issuers in raising capital on the Warsaw stock markets is a result of the WSE’s own initiatives (one-on-one meetings), the efforts of WSE IPO Partners, and several years of experience and work of the WSE representation office in Kyiv.

In order to give even more prominence and recognition to Ukrainian companies, the WSE introduced a special stock exchange index in May 2011.

WSE Remote Members

At the end of 2010, the WSE had an extensive network of remote members: 21 companies in 11 countries (Table 5), as well as 27 IPO Partners in 13 countries.

Remote membership gives foreign brokers access to the WSE system without the need to operate an organisational unit in Poland or use the services of local brokers. All major global investment banks had access to the WSE in 2010. UBS, Nomura and Morgan Stanley obtained Remote Member status in 2010. The number of domestic Exchange Members remained stable year on year and counted 28 companies.

The growing international importance of the Polish capital market is demonstrated by active operation of the biggest investment banks in Poland. In 2010, Credit Suisse Securities Ltd. opened a research and trading division in Poland and gained a 5.6% share in session stock trading. Other institutions including UBS, Goldman Sachs, Morgan Stanley and J.P. Morgan expanded their teams responsible for the Polish market.

Table 7. WSE Remote Members
Remote Member
Country of origin
Raiffeisen Centrobank AG Austria
IP Intercapital Markets AD  Bulgaria 
Renaissance Securities Cyprus
Wood & Company Financial Services Cyrrus Czech Republic
Swedbank AS Estonia
Societe Generale SA  France
Dekabank Deutsche Girozentrale  UniCredit Bank AG Germany
Concorde Securities Ltd Hungary
FIO o.c.p.  Slovakia
Neonet Securities AB  Sweden
Credit Suisse Securities (Europe) Ltd
JP Morgan Securities Ltd
Goldman Sachs International
HSBC BANK
Merrill Lynch International
Liquidnet Europe
UBS Ltd
Nomura International Plc
Morgan Stanley & Co International Plc
 UK

Source: WSE.

WSE IPO Partners

WSE IPO Partner is a programme launched by the Exchange in mid-November 2006 to attract partners supporting the WSE’s acquisition and promotion initiatives abroad. The Warsaw Stock Exchange is actively pursuing the concept of turning Warsaw into a hub of trading in equity securities issued by foreign companies, especially from Central and Eastern Europe.

The programme allows the WSE to get active support of local partners active on foreign markets, which help to promote the Warsaw Stock Exchange and to select companies interested in raising equity on the trading floor in Warsaw.

Table 8. WSE IPO Partners
WSE IPO PARTNER Country of origin
Intercapital Securities  Croatia
Wood &Company Cyrrus  Czech Republic
Swedbank  Estonia
Renaissance Securities  Cyprus
Sillicon Hill Ventures
Wedbush Morgan Securities
USA
Silkroutefinancial  UK
Belarusbank, Uniter,Priorbank, Belinvestbank  Belarus
Altera Finance, Sokrat Capital,
Pro-Consulting, Millenium Capital,
Concorde Capital, BG Capital,
Aval-Brok Limited, Avantazh Capital,
Art-Capital, ICU, 
Ukraine
Guardian Trust Greece
INFIN Financial Services  Turkey
Glenic-M  Russia
Beiten Burkhardt  Germany
AB Finasta Corporate Finance   Lithuania

Share of Foreign Investors in Trading on the WSE

The WSE’s many initiatives focused on the development of an international network of business partners and building the WSE brand in Poland and abroad have helped to increase the share of foreign investors in trading on the WSE. Foreign investors generated no less than 47% of trading in shares on the WSE Main Market in 2010. The share of foreign investors placing orders on the WSE via domestic and remote Exchange Members increased by 11 percent. By value, foreign investors generated more than PLN 96.6 billion of trades, an increase of more than 60 percent year on year (PLN 60.2 billion in 2009).

Table 6. Percentage Share of Investors in Trading on WSE Markets
Investors
Instruments 2009 2010
Foreign
Shares MM
36 47
Shares NC
2 2
Contracts
11 14
Options
4 12
Individual
Shares MM 27 23
Shares NC 88 87
Contracts 52 50
Options 65 60
Institutional
Shares MM 37 30
Shares NC 10 11
Contracts 37 36
Options 31 28

Source: WSE investor survey 2010