Stock market and investment situation

As opposed to downward trend off all listed indices in 2018, the year 2019 was characterized by a higher fluctuation of rates of return. Between 31.12.2018 and 31.12.2019 WIG noted a slightly positive rate of return (+0,2%). For WIG20 index grouping the largest entities on WSE the rate of return was negative (-0,56%). The Warsaw mWIG40 index representing average companies ended the period nearly with the same results as year ago. The reversal of trends regarded the WIG80 index representing the smallest companies, which despite proceeding outflow of funds from domestic share funds noted double-digit rate of return accounted to almost 14% and it were the highest rates of return since 2013 and 2012 respectively.

The following factors, among other, had an impact on the outlook of the Warsaw Stock Exchange in 2019: (i) changes in monetary policy in the United States and lowering interest rates, (ii) progress in US-China trade agreement, (iii) expectations of the European Central Bank to further ease its policy, (iv) relative weakening of developing markets stock exchanges quotations due to economic slowdown and political risk factors. (v) weaker macroeconomic data compared to 2018, (vi) judgments of the Court of Justice of the European Union on FX mortgage loans and refund of fees and commissions on customer credits, (vii) a decrease of domestic companies share in MSCI Emerging Markets index, (viii) frequent changes in legal regulations on energy sector and political risk factors regarding fuel and raw material sector.

On the Polish government bond market, the beginning of 2019 was characterized by moderate growth driven by investors’ concerns regarding impact of election promises made by the ruling party (among other development of Family 500+ programme and the thirteenth pension) on public finances. Nevertheless, since the beginning of May to the end of August a considerable decrease (historical minimum) in yield on government bond was noted, following yield on bonds on base markets. The main reason was investors’ valuation of changes in US monetary policy and lowering interest rated by FED. Decline in yields was favoured also by the commitment of ECB to begin purchasing assets and to lower interest rate. As a result, in the second and third quarter yield on 10-year government bonds decreased from 3,0% to 1,75%. In the fourth quarter growth adjustment of yields on government bonds was observed due to global capital flows to higher-risk assets. Additionally, investors found data indicating increase in CPI inflation in Poland concerning.

In 2019, 7 new companies appeared on the main market of the WSE (including: 5 due to the transfer of quotations from the New Connect market), and 22 entities left the trading floor.

On the New Connect organized market, in 2019, 15 issuers debuted, with the simultaneous withdrawal of 27 entities from listings. On the Catalyst bond market, a total of 562 series of bonds were listed, and the value of the issue exceeded PLN 796 billion.