The Warsaw stock exchange, which once appeared poised to dominate Central and Eastern Europe, is now on a mission to regain its standing after a decade of missed opportunities and dwindling investor interest. Tomasz Bardziłowski, the newly appointed chief executive of the Warsaw Stock Exchange, is tasked with leading this revival effort. Bardziłowski was appointed in February by the coalition government of Prime Minister Donald Tusk, who took office after ousting the right-wing Law and Justice (PiS) party.
Bardziłowski is cautiously optimistic about the exchange’s prospects, noting that Tusk’s government has begun replacing the management of state-controlled companies listed in Warsaw. One such company is the oil and gas giant Orlen, whose share price has plummeted by 30% over the past five years. Earlier this year, a state audit accused Orlen of selling assets at a $1.24 billion undervaluation to complete a domestic merger, solidifying its position as Poland’s leading energy company. The company also faced criticism from Norway’s sovereign wealth fund for its purchase of a Polish media business, which raised concerns about press freedom in Poland under the previous PiS government.
While Bardziłowski did not specifically address Orlen, he acknowledged that “foreign investors have become less attracted to our stock market and have lost some trust, particularly due to governance concerns in some state-owned companies.
The Warsaw Stock Exchange has struggled to keep pace with Poland’s robust economic growth over the past decade. Last year, the total market capitalization of companies listed in Warsaw dropped to 22% of Poland’s GDP, down from 35% in 2013. This decline has been exacerbated by a slowdown in initial public offerings (IPOs) and a reduction in trading volumes across Europe. For instance, Polish parcel locker company InPost chose to list in Amsterdam in 2021, raising €2.8 billion.
Despite Poland’s stronger-than-expected GDP growth of 3.2% in the second quarter of last year, the stock market’s declining relevance has been a stark contrast to the country’s economic performance. Unfortunately, our stock market has really not kept pace with the growth of our economy,” Bardziłowski said in an interview.
There are, however, signs of potential recovery. Bardziłowski expressed optimism about reports that Croatian food retailer Studenac is considering a dual listing in Warsaw and Zagreb, and that private equity firm CVC is expected to float its Polish retailer Żabka in Warsaw. With an estimated value of $8 billion, Żabka’s IPO could be one of Europe’s largest this year. “Once you have a couple of important IPOs, it creates momentum, and I think there will be more queueing after that,” Bardziłowski noted.
However, challenges remain. The number of delistings in Warsaw has recently outpaced new listings, partly due to the increasing influence of private equity firms. While working on Żabka’s IPO, CVC also made an offer in July to buy out and delist Comarch, one of Poland’s leading software companies, in a deal valued at $650 million.
The exchange’s difficulties are not entirely self-inflicted. A 2013 pension reform, implemented under a previous Tusk government, forced Polish pension funds to reduce their equity investments, leading to a significant outflow of money from the stock market.
As Bardziłowski works to restore confidence in the Warsaw Stock Exchange, the bourse’s future will likely depend on its ability to attract new listings and rebuild trust among both domestic and international investors.
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