International activities

International activity of WSE is performed through:

Development of a Network of Foreign Investment Firms – Exchange Members

Thanks to promotion activities, participation in international conferences, own conferences organized in main world financial centres or at international road shows, the Exchange proactively promotes the Polish capital market amongst global investors and financial intermediaries.

The efforts of WSE focus on attracting domestic WSE members and foreign (remote) members. These are mainly international investment banks as well as regional financial intermediaries, which are increasingly interested to get access to the WSE trading system as more companies from the Region are listed on the trading floor in Warsaw. Thanks to WSE strategy of attracting new financial intermediaries, 12 new WSE members joined in 2011, including 10 foreign and 2 domestic members. New foreign WSE members granted access to the trading system in 2011 originate mainly from Central and Eastern Europe.

Remote membership represents for foreign brokers the possibility of direct access to the WSE system without necessity of being physically present in Poland or using intermediary services of local brokers. At 2011 year-end, this solution was used by intermediaries from Austria, Bulgaria, Cyprus, the Czech Republic, Estonia, France, Germany, Hungary, Lithuania, Romania, Slovakia, Sweden and the UK.

In 2011, the (double-counted) value of trading performed by WSE remote members in session transactions amounted to PLN 117.1 billion, an increase by 76.5% in comparison to 2010. The share of remote members in session turnover amounted to 23.4% in comparison to 16.0% in 2010. On the futures market, remote members were responsible for 8.6% of the trading volume (2.4 million contracts; increase by 0.9 million), as compared to 5.5% in 2010.1

According to WSE research, foreign investors generated 47% of turnover in 2011, a steady share compared to 2010.

Investors’ share in equities turnover on the Main Market
  Year ended December 31,
  2011 2010
Foreign investors
47% 47%
Domestic retail investors
18% 19%
Domestic institutional investors
35% 34%
Source: WSE

Foreign investors were more active on the futures market in 2011. The volume of turnover generated by foreign investors amounted to over 2.2 million contracts in 2011, an increase of more than 18% in comparison with the volume of ca. 1.8 million contracts in 2010.

Investors’ share in turnover on the futures market
  Year ended December 31,
  2011 2010
Foreign investors
16% 14%
Domestic retail investors
46% 50%
Domestic institutional investors
38% 36%
Source: WSE

Attracting Foreign Issuers

The Group aims at strengthening its position of the regional financial hub in Warsaw through focusing its marketing activities on companies from the CEE Region. In the Company’s opinion, WSE has competitive advantages over other stock exchanges in the Region which include, among others: a recognizable brand, reliable trading system, quality of transactions performed, market liquidity, market environment protecting interests of investors and facilitating access for foreign investors and brokers, and access of issuers to a diversified base of domestic and international investors.

In 2011, the Group organized the first two-day CEE IPO Summit for companies from Central and Eastern Europe which are considering an IPO and for global financial investors who are looking for new investment opportunities. Initiatives promoting the Polish capital market were continued through a series of CEE IPO Roadshow meetings in Europe and the Middle East in the autumn of 2011 as well as the 1st WSE International Companies’ Forum in November 2011, a forum for foreign companies listed on the WSE and Polish institutional investors.

In its proprietary Program WSE IPO Partner, WSE works together with a network of foreign banks, brokerage houses and other intermediaries with a view to promoting the Polish capital market abroad, which materially enhances WSE’s possibilities of approaching a bigger group of issuers and market participants. As at December 31, 2011, the WSE IPO Partner program covered 26 entities from 12 countries.

As of May 4, 2011, the Exchange calculates and publishes the WIG-Ukraine index, which covered 10 Ukrainian companies listed on the Main Market at 2011 year-end. The index was created in view of the growing number of Ukrainian issuers listed on WSE: another five Ukrainian companies were newly listed on the WSE Main Market in 2011. The growing interest of Ukrainian issuers in listing on WSE is a result of the Company’s active efforts, including the operation of the WSE representative office in Kyiv established in 2008. In 2011, first companies from Lithuania, Bulgaria and Slovenia were listed on WSE Main Market. In view of the growing number of listed companies from the Region, in 2012 WSE is planning to introduce a new market index of foreign companies from Central and Eastern Europe listed on WSE.

As at December 31, 2011, the markets operated by the Exchange listed shares of 46 foreign companies, including 7 listed on NewConnect, with total capitalization of nearly PLN 197 billion. The share of foreign companies in total session trading in shares on the Main Market was 3.3% in 2011 as compared to 3.5% in 2010. Initiatives aiming to improve the liquidity of trading in shares of foreign companies are, next to attracting foreign issuers, a priority of WSE in the context of the Company’s international activities.

Changes in Regulations

WSE is actively involved in the process of amending market regulations aimed at making the Polish market more attractive to foreign investors. The Exchange participated in the drafting of the act on omnibus accounts adopted on September 16, 2011.

A change in the trading session timetable, introduced at the beginning of 2011 which extended trading till 17:35, facilitates investment opportunities on WSE for investors operating in other time zones, especially in the USA.

(1) Trading volume double-counted for both parties to a transaction