Blogginlägg med etiketten Poland

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Mixed messages from Poland
Marcus Svedberg
2011-01-22 (Comments)

I just came back from a research trip to Warsaw and concluded that Poland is in good economic shape compared with its European peers, but this may not be enough to drive market performance as investors tend to be rather forward looking.

Poland performed strongly during the financial crisis and the global slowdown. It has entered 2011 with robust growth. However, authorities are aware of rising strains within the economy as the economy is operating close to potential output. Inflation is above the target set by the Central Bank.  It is expected to stay around 3.0 per cent during this year. Public finances weakened significantly in 2009 and deteriorated further in 2010. The budget deficit was around 8% of GDP last year. A reduction of 1-2 percentage points is expected for this year.

Monetary policy is being tightened in order to curb inflation (the Central Bank raised the policy rate by 25bp on Wednesday). The zloty weakened sharply during the second half of 2009 but has since February last year strengthened markedly. PLN is likely to strengthen further – with the Central Bank´s blessing. Euro conversion is not a priority issue. Poland is still outside ERM2 and no target date is set for participation.

Parliamentary election is scheduled for October 23, 2011. PM Donald Tusk is likely to continue in power with a coalition government. For investors, a government based on Civic Platform and Donald Tusk as PM would provide continued political stability. Civic Platform, has a narrow agenda though. The current budget lacks structural reforms, so will the 2012 budget be as it will be prepared and presented before the autumn elections. There are no indications that the remaining part of the mandate will be used to tackle longer term problems facing Poland.

The equity market may be able to perform in double digits in 2011 but the risk to that is on the downside, especially as we cannot rule out renewed Eurozone turbulence, which tends to have a substantial impact on the Polish market.

(Comments) | Taggar: Poland
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Imagine if all countries acted like Poland…
Peter Elam Håkansson
2010-09-07 (Comments)

During the last few years Poland has become clearer and clearer in its economic position. The country was the only EU country that showed growth during the difficult year of 2009. 

What is perhaps less known is that Poland has also developed a strong and large domestic financial market. Besides a well functioning stock market there are also a large number of local pension funds who are significant players on the market. Given their size and continuous injection of capital, a strong domestic investment group has been created. We have, in many of our discussions with representatives from other countries in Eastern Europe, highlighted Poland as a good example to follow.

And why is Poland so good? Well, one of the most important parts of a strong pension system is its ability to take advantage of growth in the country. There are several examples of pension systems where the portion of domestic stocks is close to zero. This scenario is the worst in Baltic States where local pension funds are completely absent on the local financial markets. Another significant advantage is that this also creates a base for companies to raise capital by making it possible for public offerings. Thus, it is no coincidence that the Baltic States have suffered immensely from the financial crisis – it was way too simple to borrow money combined with dysfunctional stock markets, which is a result of pension funds not buying local assets.

As mentioned, the situation in Poland is quite different. Today, there are 498 companies listed on the Warsaw Stock Exchange. Compare this to 26 in Prague or 46 in Budapest and the picture becomes even clearer. The number of public offerings in Warsaw are impressive:
2007   105
2008     94
2009     39
2010     53 (during the first seven months)

The Polish government is also able, with the help of a functioning stock exchange, to implement a very ambitious privatisation plan. Since the middle of June 2009, more than seven billion USD have been invested on the exchange. The most memorable transactions include, among others, the mining company Bogdanka that received the East Capital Award for Best IPO last year. The plans for the coming year remain ambitioudivs and even include the Warsaw Stock Exchange itself.

The best way to gain exposure to the significant development in Poland is through our special East Capital Bering New Europe Fund which is traded quarterly. The fund will open again for new investments on 30 September.

Peter Elam Håkansson
Written on flight SK 705 (Scandinavian Airlines) between Helsinki and Stockholm

(Comments) | Taggar: Poland
Peter Elam Håkanssons bild

Web TV: live dialogue with investors

Peter Elam Håkansson
2010-04-23 (Comments)

Marcus and I communicated with investors from 25 countries in yesterday’s Live Q&A. It was broadcast live from Stockholm where East Capital simultaneously hosted a summit with partners and investors.

A large number of relevant questions were posted and we moved quickly around East Capital’s investment universe to cover as many of them as possible.

China was the first region to be brought up. This was specifically relating to East Capital’s recently signed acquisition of the Chinese dedicated asset manager Asia Growth Investors. Commenting on “Why China?” my short answer is that China is impossible to ignore when investing in Eastern Europe and that there has been, and certainly is a clear linkage between Russia and China. 

As usual Russia was brought up by many web TV viewers and among many other topics we discussed its main growth drivers and our favoured stocks.

The buzzword in Moscow is 'modernisation', as in modernisation of the economy and of the political system, through economic reform, fighting corruption and the move to democracy. The modernisation of such elements provokes much more positive feelings that will help Russia in maturing as a serious contender.

The successful return to the sovereign debt market also stands to benefit Russian equities.

Other markets we discussed were the Baltics, Turkey and Poland for which we pointed out opportunities as well as potential risks.

The tragic and unexpected death of the Polish President, Lech Kaczynski, has had little effect on the Polish economy. A brief blip in the currency markets in the days following, but little volatility. This shows the strength of the economy and the development of Polish institutions. Growth in 2009 has resulted in a more steady recovery and more stable market.

Growth in the Baltics is being revised and has been low but without doubt, better than expected. For example, Estonia has already met the formal criteria for the Eurozone and this has had a positive effect on its stock market, reducing market uncertainty. The impact of accessing the Eurozone will have more longer-term benefits.

Turkey is a country still very much on the East Capital Universe radar. It is area for long term focus as it is supported by what is now a remarkably strong demographic profile. The fruits of lower interest rates and inflation, coupled with a growing population, will have a profound effect on the economy.

We also commented on the less performing markets such as Greece, Slovakia and Slovenia and their relation to the Eurozone.

See all the topics and watch the programme at www.eastcapital.com/live

(Comments) | Taggar: East Capital Live Q&A, Poland, Russia, Turkey
Marcus Svedbergs bild

President of Poland Died in Accident
Marcus Svedberg
2010-04-10 (Comments)

Lech Kaczynski, President of Poland, and a large number of senior military and political leaders, including the Governor of the Central Bank Slawomir Skrzypek, died on Saturday in a plane accident. The Polish delegation was on its way to commemorate the Katyn anniversary, the Soviet massacre of Polish officers in World War II, when the plane crashed after a failed emergency landing in Smolensk in Western Russia. National grief has been issued for a week in Poland and the accident will have substantial political consequences. The Speaker of the lower of house of parliament, Bronislaw Komorowski, has assumed the presidency, in line with the constitution. Presidential elections were scheduled for the fall but will most likely be brought forward. Deputy Governor, Piotr Wiesiolek, has become acting president of the National Bank of Poland.    

(Comments) | Taggar: Poland

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Våra bloggare

  • Karine Hirns bild
    Karine Hirn

    Partner och Chief Representative, Shanghai-kontoret. Karine bloggar om East Capital, våra fondprodukter och ger direktrapporter från Shanghai.

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    Marcus Svedberg

    East Capitals chefekonom fokuserar på makroekonomi, analyser och omvärldshändelser som påverkar utvecklingen i regionen.

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    Vesna Lucca
    East Capitals kommunikationschef skriver främst om East Capital som företag och aktuella mediefrågor.
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    Kristina Sandklef

    Kristina, makroekonom Asien, delar med sig av sina erfarenheter och analyserar trender och händelser som påverkar Kina.

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