One of the key objectives of the WSE Group according to the strategy adopted by the Company in October 2014 is to make Warsaw Stock Exchange an exchange of first choice for investors and issuers in Central and Eastern Europe. WSE’s international position is mainly reinforced with on-going expansion of the foreign client base including issuers, brokers, investors and data vendors, as well as initiatives designed to promote the Polish market and Polish companies among international investors.
As a result of adoption of WSE’s new strategy, which provides for organic growth of the Company in the coming years based on specialised, unique competences of the WSE Group, WSE decided to discontinue negotiations with the CEESEG Group on capital co-operation. In September 2014, WSE decided that it is not considering a capital alliance with CEE Stock Exchange Group AG at this time but that WSE does not rule out returning to the idea in the future. Irrespective of the decision, WSE remains open to co-operation with different players in the region, including CEESEG, to make Central and Eastern Europe a more attractive place for investment of international capital.
This direction of development is supported by other steps initiated by WSE in 2014 that will continue in the coming years in order to promote the Polish market and WSE-listed companies internationally. Representatives of the Exchange promote the Polish capital market and financial instruments listed on WSE by holding investor events in partnership with brokers and investment banks around the world and by participating in international conferences and investor meetings.
REPRESENTATIVE OFFICES IN LONDON AND IN KIEV
WSE’s aspiration to build a strong international position is reflected in the permanent presence of the Company’s representatives in London and in Kiev.
The Representative Office in London was established in June 2013 to enhance WSE’s acquisitions on that market, especially the acquisition of new investors and Exchange Members.
Since 2008, WSE has operated a Representative Office in Kiev (Ukraine), whose operations focus on promoting WSE amongst Ukrainian investors, issuers and financial intermediaries.
The Representative Offices have no separate legal personality and do not carry on any profit earning independent business operations. In all their activities, the Representative Offices act on behalf and for WSE to the extent of powers of attorney granted by the WSE Management Board.
STAKE IN AQUIS EXCHANGE
In February 2014, Warsaw Stock Exchange finalised the acquisition of Aquis Exchange, the multilateral trading platform in London, which plans to offer trade in stocks from 12 European countries. The goal of the investment was to diversify further the sources of the WSE Group’s revenue and to largely fortify the brand and position of the Exchange on the international financial markets including continued improvement of the role of WSE as the dominant financial hub in Central and Eastern Europe.
DEVELOPMENT OF A NETWORK OF FOREIGN INVESTMENT FIRMS – EXCHANGE MEMBERS
Thanks to acquisition, participation in international conferences, own conferences organised in the world’s main financial centres and international road shows, WSE proactively promotes the Polish capital market among global investors and financial intermediaries. The efforts of WSE focus on attracting domestic and foreign exchange members and investors.
The Exchange had 56 members, including 30 local and 26 remote members, at the end of 2014. The share of remote members in the Electronic Order Book in shares was 21.7% in 2014 compared to ca. 22.2% in 2013.
 Local WSE members are domestic and foreign entities which operate an enterprise in Poland which processes exchange orders or pursues related activities. Remote members are companies without a branch in Poland and companies with a branch whose activities are unrelated to processing of orders.
Share of local and remote WSE members in the Electronic Order Book in shares on the Main Market, as at 31 December
Foreign (local and remote) Exchange Members are companies from many European countries. Remote membership allows foreign brokers to have direct access to the WSE system without physical presence in Poland and without the intermediation of local brokers. At the end of 2014, this solution was used by intermediaries from Austria, Bulgaria, Cyprus, Czech Republic, France, Germany, Hungary, Lithuania, Netherlands, Slovakia, Sweden and UK.
The Polish Power Exchange also pursues an active policy of attracting foreign members: one foreign company became a PolPX member in 2014.
ATTRACTING FOREIGN ISSUERS
The Exchange aims at strengthening its position of the regional financial hub through focusing its marketing activities on companies from Central and Eastern Europe. In the opinion of the Company, WSE has competitive advantages over other stock exchanges in the CEE Region which include, among others: a recognisable brand, a reliable trading system, market liquidity, and a market environment protecting interests of investors and facilitating access for foreign investors and brokers, as well as access of issuers to a diversified base of domestic and international investors.
As at 31 December 2014, the markets operated by the Exchange listed shares of 61 foreign companies, including 10 companies listed on NewConnect, with total capitalisation of nearly PLN 662.2 bn, compared to PLN 248 bn in 2013. The share of foreign companies in total trading in shares on the Main Market was 1.9% in 2014 as compared to 2.6% in 2013.
Foreign companies listed on WSE as at 31 December 2014 come from 24 countries, mainly Ukraine (13 issuers) and the Czech Republic (6 issuers). 29 companies are dual-listed while 32 companies are single-listed on WSE.
PolPX negotiates with foreign companies interested in active participation in the exchange market in gas and electricity.
SHARE OF FOREIGN INVESTORS IN TRADING ON WSE MARKETS
According to WSE’s research, foreign investors generated 49% of turnover in shares on the WSE Main Market in 2014, moderately more than in 2013 (47%).
Share of investors in turnover on the Main Market in shares (%)
Foreign investors’ activity on the futures market remained stable at 17% in 2014.
Share of investors in turnover on the futures market (%)
BUILDING THE INTERNAL ELECTRICITY MARKET (IEM)
PolPX works internationally in partnership with the Energy Regulatory Office, the Transmission Grid Operator PSE and with stakeholders of the CEE, CWE and NEW regional markets to prepare for the launch of a single European day-ahead and intra-day commodity market. Moreovert, PolPX takes part in ssthe following projects:
- Price Coupling of Regions (PCR) for the day-ahead market,
- CEE regional project for the day-ahead market,
- project for the Polish market to join the day-ahead market of three exchanges (Czech, Slovak and Hungarian markets) launched in September 2012,
- Cross-border Intra-day (XBID) for the intra-day market,
- co-operation with the Scandinavian exchange Nord Pool Spot (NPS) on the day-ahead market launched in December 2010 and the prospective intra-day market.
THE WSE GROUP AS A MEMBER OF INTERNATIONAL ORGANISATIONS AND INITIATIVES
Warsaw Stock Exchange has co-operated with the Federation of European Securities Exchanges (FESE) since 1992, was granted the status of associated member in 1999, and has been a full member of FESE since June 2004. FESE represents 36 exchanges which organise trading in equities, bonds, derivatives and commodities through 19 full members from 30 countries as well as 1 non-European observer member.
SUSTAINABLE STOCK EXCHANGES
WSE is also a member of the Sustainable Stock Exchanges (SSE) since December 2013. SSE is a UN initiative of global exchanges which promote the development of corporate social responsibility and sustainable development on their home capital markets. SSE was created in 2009 by the United Nations to exchange members’ experience in the development and promotion of corporate social responsibility and responsible investment among investors, public companies, regulators and capital market infrastructure institutions. WSE was the ninth exchange to join SSE, the first one in Central and Eastern Europe. SSE has 17 members.
Since 2005, PolPX is a member of the Association of European Energy Exchanges EUROPEX. EUROPEX groups 21 exchanges in Europe. The mission of EUROPEX is to take steps promoting exchange-based solutions for Europe’s internal energy market and to ensure a favourable regulatory environment for the development of liquid, transparent and effective energy exchanges in Europe. Through EUROPEX, PolPX participates in summits including the Florence Forum and the Madrid Forum. With its active participation in EUROPEX working groups, PolPX can influence EU legislation and present its comments and recommendations to the European Commission, ACER and ESMA. EUROPEX is a forum of dialogue between energy exchanges and industry organisations of market participants including EFET, Eurogas, Eurelectric. The CEO of PolPX was elected in 2013 for a two-year term on the EUROPEX Board as one of its six members.
The Association of Power Exchanges (APEx) is an international organisation of world energy exchanges and transmission system operators. It has 50 members around the world. APEx supports the development of energy markets. Its key initiatives include development of a platform for exchange of information and experience among its members.
As an active member of APEx, PolPX organised and hosted the international conference of APEx energy exchanges in Kraków on 26 – 28 October. PolPX hosted 140 representatives of energy exchanges from Asia, Australia, Europe, North America and South America. As the organiser of the APEx 2014 Conference, PolPX participated in an international event and introduced a big international group to PolPX’s vision of a strong European energy and gas market in the context of energy security.
ASSOCIATION OF FUTURES MARKETS (AFM)
AFM is a non-profit organisation founded in 1998. The Association has 30 members: financial and commodity exchanges in developing countries. The mission of the Association is to promote and encourage the development of new derivatives markets, to support their growth and to organise a platform for exchange of experience among market participants at international conferences.
Thanks to close multi-faceted cooperation between PolPX and AFM, the AFM Board selected PolPX as the host and co-organiser as the next AFM Annual Conference. The 18th Conference will be the first conference held in Poland (Kraków). It is addressed to representatives of financial exchanges around the world. It will bring together some 100 participants.
EACH (EUROPEAN ASSOCIATION OF CCP CLEARING HOUSES)
WCCH representatives take part in plenary meetings, teleconferences and work of the Policy Committee, the Risk Committee and the Legal Committee of the European Association of CCP Clearing Houses EACH. WCCH takes active part in consultations of draft European regulations on financial instruments based on exchange commodities as well as commodities as such.