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Can the Warsaw Stock Exchange be a regional leader? Only if it breaks free from the government, proponents say.
Warsaw’s steady growth and conservative approach is in stark contrast to the experience of other exchanges in the neighborhood. When Prague launched its exchange it had more than 1,600 listings and a very loose regulatory structure. After numerous scandals, corporate failures and an ill-begotten privatization of state assets, the Prague exchange now has only 13 listings.
“We took a textbook approach, and were very orthodox. We decided from the beginning that we wouldn’t try to create new methods, but instead relied on tried and tested solutions that existed in other markets,” says Rozlucki.
Anchored to the largest economy in central Europe, the WSE has become the biggest exchange in the region, recently passing Vienna, which, significantly, was not invited to take part in Warsaw’s privatization.
“I don’t quite see where Vienna gets its enormous certainty in saying it wants to take part in the WSE privatisation,” said Sobolewski, who calls the Austrian demand to be included “arrogant."
Warsaw has been hit hard by the global downturn, but in the last three months it has bounced back strongly, in line with other recovering markets. However, there is a growing sense that without a more powerful partner, the WSE will be unable to continue growing if it is confined only to Poland.
Attempts to get companies from countries like Ukraine and Estonia to list on the WSE have floundered because of the crisis, and Sobolewski complains that the average size of companies on his exchange is too small to interest really big investors.
Sobolewski hopes that the answer lies in tying up with a larger exchange, which will have to make a commitment to encourage the WSE to keep growing.
“We want the WSE to be part of an international network of investors, dealers and companies,” he says. “We expect the eventual investor to continue the strategy of building a financial center in Warsaw.”
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