WSE Group milestones 2014

Financial Results

2014 net profit: PLN 112.3 mn

2014 EBITDA: PLN 164.1 mn

Amendment of the Dividend Policy and Payment of Dividend from 2013 Profit

On 26 August 2014, WSE paid dividend at PLN 1.2 per share to those shareholders who held shares at 7 August 2014 (dividend record date).

On 30 October 2014, in Current Report No. 30/2014, the Exchange announced an amendment of the Company’s dividend policy, whereby it is the intention of the WSE Management Board to recommend that the General Meeting pay dividend above 60% of the WSE Group’s consolidated net profit adjusted for the share of profit of associates. Furthermore, it is the intention of the WSE Management Board to recommend that the General Meeting pay dividend from WSE’s net profit for 2014 at PLN 2.40 per share gross, and dividend from WSE’s net profit for 2015 at PLN 2.60 per share gross.

Strategic Decisions

Decision to Suspend Negotiations on Capital Co-operation with CEESEG

On 23 September 2014, the WSE Management Board announced that it is not considering a capital alliance with CEE Stock Exchange Group AG at this time. The objective of WSE is organic growth, including strengthening of the international position of the Exchange, making it more attractive to all market participants, and building WSE shareholder value. The WSE Management Board also announced that 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, and that WSE does not rule out returning to the idea of a capital alliance with CEESEG in the future.

Publication of the Updated Group Strategy WSE.2020

On 30 October 2014, WSE published the updated strategy of the WSE Group. The details are presented in Section II.1.

Selection of PolPX’s New System Vendor

In 2014, PolPX decided to select a new trading system. X-Stream Trading provided by Nasdaq OMX (NOMX) will be implemented by PolPX in 2016. The new technology will provide PolPX with improved functionalities, support growing volumes of trade, and allow PolPX to add new commodity instruments and derivatives in the future. PolPX will be NOMX’s first client in the energy sector to use X-stream Trading, currently the world’s most popular exchange trading system. With the implementation of the advanced technology, NOMX will provide PolPX with support in opening of a new market of financial forward instruments to go live in 2015. The agreement allows PolPX to use SAPRI, NOMX’s energy auction platform, helping PolPX to prepare for participation in European cross-border energy auctions under the Price Coupling of Regions (PCR) mechanism.

Management and Supervision

Changes on the WSE Management Board

On 26 June 2014, the General Meeting of WSE appointed Paweł Tamborski as President of the WSE Management Board. The decision took effect on 25 July 2014.

On 25 July 2014, the Exchange Supervisory Board acting on request on the new President of the Management Board decided to appoint members of the WSE Management Board for a new term of office including:

  • Dariusz Kułakowski as Vice-President of the WSE Management Board,
  • Karol Półtorak as Vice-President of the WSE Management Board,
  • Mirosław Szczepański as Vice-President of the WSE Management Board,
  • Grzegorz Zawada as Vice-President of the WSE Management Board.
The decision took effect on 27 August 2014 for Grzegorz Zawada and on 9 September 2014 for Karol Półtorak. The resolution of the Exchange Supervisory Board took effect on the date of adoption, i.e., 25 July 2014, for Dariusz Kułakowski and Mirosław Szczepański.

Changes on the WSE Supervisory Board

On 25 July 2014, the Ordinary General Meeting of WSE elected members of the Exchange Supervisory Board for a new joint three-year term of office including:

  • Dariusz Kacprzyk,
  • Jacek Lewandowski,
  • Piotr Piłat,
  • Dr Wiesław Rozłucki,
  • Dr Marek Słomski,
  • Prof. Marek Wierzbowski.
On 25 August 2014, the Extraordinary General Meeting of WSE elected Waldemar Maj to the Exchange Supervisory Board.
Safety of Trading

Changes to Classification of Shares in the Alert List Segment

In late 2013, the Exchange took measures to eliminate the penny stock issue on the WSE Main Market. The rules of classification of shares in the Alert List segment were amended. As of 2014, all shares whose unit market price was lower than PLN 0.50 were classified in the Alert List segment irrespective of the volatility of the share price. The consequences of classification of an issuer’s shares in the Alert List include: exclusion of the issuer’s shares from index portfolios, transfer of the shares to the single price trading system, special designation of the issuer in the exchange’s information services, and removal of the shares from the list of securities available for short selling.

If the reasons for the classification in the Alert List persist, the Exchange Management Board will suspend and then delist the issuer’s shares on the exchange.

Amendment of Regulations Applicable in the Alternative Trading System (ATS) on Catalyst and NewConnect

The objective of the amendments introduced as of 1 September 2014 is to improve safety on Catalyst and to harmonise the Catalyst ATS regulations with the standards introduced last year on NewConnect. The amendments include: introduction of a minimum value of an issue of bonds which may be introduced into the ATS; obligation imposed on issuers of low-value issues to have an Authorised Adviser; mandatory preparation of an information document even where bonds were previously offered under an information memorandum.

In order to improve bondholder access to information relevant to bond payments, the duration of issuers’ reporting requirements was extended. The requirement of a minimum value of bonds introduced into the Catalyst ATS took effect on 1 January 2015.

Organisation of Trading and Products

Decision to Delist WIG20 Futures with a Multiplier of 10

In September 2013, WSE introduced to exchange trading WIG20 futures with a multiplier of PLN 20 in anticipation of gradual migration of futures with a multiplier of PLN 10 to the new contracts. 20 June 2014 was the last day of trading of WIG20 futures with a multiplier of PLN 10. Since 23 June 2014, only WIG20 futures with a multiplier of PLN 20 have been in trading.

Introduction of Options with New Expiry Dates

On 18 August 2014, WSE changed the expiration cycle of WIG20 options. As a result, options expire 12 times per year and options which expire in the nearest calendar month are available in trading.

Continuation of the Shorter Trading Session Timetable until the End of 2015

On 18 September 2014, the Exchange Supervisory Board at the request of the WSE Management Board approved continuation of the shorter trading session timetable until the end of 2015. As a result, the trading session starts at 08:45 on the futures market and at 09:00 on the cash market. Trading closes at 17:05 on both markets.

Change of PolPX Trading Schedules

In 2014, PolPX modified its trading schedules:

  • the opening fixing at 8:00 was discontinued on the Day-Ahead Market in electricity in order to concentrate volumes at one time;
  • an opening fixing at 9:15 was added on the Day-Ahead Market in gas.

Changes of Stock Exchange Indices

On 18 September 2014, the Exchange Management Board decided that WIG20, the price index which groups the biggest and most liquid stocks listed on WSE, will remain the main underlying index for derivatives. At the same time, the Exchange Management Board decided that WIG30 will continue to be published. The Exchange Management Board decided not to introduce WIG30 derivatives but to develop derivatives based on WIG20.

Concerning the small and mid-cap indices, according to the decision of the WSE Management Board, as of 1 January 2015, mWIG40 will continue to be published on the existing terms and the publication of sWIG80will be resumed. At the same time, WSE will no longer publish WIG50 and WIG250.

New PolPX Instruments

Instruments with delivery over the weekend were introduced on the Day-Ahead Market in gas.

New forward instruments in gas were introduced on the Commodity Forward Instruments Market:

  • weekly – exercise during the calendar week,
  • seasonal – exercise in the winter season: Q4 and Q1 of the following year, and in the summer season: Q2 and Q3.

The additions to PolPX’s offer bring it in line with the European markets and address the expectations of PolPX traders. The new instruments add flexibility to the PolPX offer necessary to grow the volume of trading and to open trading opportunities to more players.

Launch of the Register of Guarantees of Origin

Since November 2014, PolPX offers trade in guarantees of origin of energy. These are new support instruments for renewable energy sources which disclose to the final consumer that a given quantity of electricity put into the distribution grid or transmission grid, as stated in the document, was generated from renewable energy sources.

Directive 2009/28/EC which imposes the obligation to set up registers of guarantees of origin in the European Union member states was implemented in Poland in an amendment of the Energy Law of 26 July 2013, known as the small energy tripack, effective as of 11 September 2013. It requires PolPX to operate a Register of Guarantees of Origin and to organise trade in guarantees of origin.

Launch of the Exchange Information Platform

In February 2014, PolPX launched the Exchange Information Platform which gives market participants access to key information on the electricity market and its technical environment. In 2014, PolPX started to publish coal indices on the Platform, based on aggregated actual transaction prices of thermal coal on the Polish market.

New Treasury Bond Spot Poland Products

TBSP market participants can trade using new functionalities: MidPrice Order Book and Striker Price since January 2014, and tri-party repos since October 2014. These functionalities boost the long-term competitiveness and usefulness of the platform offered by BondSpot S.A. to participants of the interbank bond market.