Analysis

Poland Moves Closer to Developed Market Status

Back in September of last year, the global index provider FTSE Russell announced the results of its annual classification of countries, with the most notable news being the upgrading of Poland’s market status from emerging to developed. The decision will become effective in conjunction with the FTSE Global Equity Index Series semi-annual review in September 2018.

To mark the upcoming reclassification, FTSE Russell published a white paper on Poland on May 11, and organised a conference: Talking Poland – Charting Success, From Emerging to Developed. Hosted by Caroline O’Shaughnessy, FTSE’s global head of sales and marketing, she was joined by His Excellency Arkady Rzegocki, the Polish ambassador in the UK, the Management Board of the Warsaw Stock Exchange (GPW), and leading representatives from the Polish brokerage, clearing and investment community.

The conference was aimed at international institutional investors who use FTSE Russell indices in their investment strategies. The event highlighted the significant progress made by Poland’s capital markets to enable promotion to developed market status within the FTSE Russell Country Classification scheme. It charted some of the key developments made by the Polish economy and looked ahead at the investment opportunities now represented by a reclassified Poland.

“I am delighted that Poland now meets all of the rigorous criteria for Developed market status within FTSE Russell’s global equity benchmarks, as approved by our independent advisory committees,” said Mark Makepeace, CEO of FTSE Russell. “Poland is the first country to be promoted from Emerging to Developed status for almost a decade. It is a significant achievement and marks the culmination of a long-term commitment from the Polish Ministry of Finance and the Warsaw Stock Exchange to improve Poland’s capital markets infrastructure and strengthen its economy.”

“We would like to thank FTSE Russell for organising this event and publishing the White Paper. Together with the upgrade of Poland to developed market status, it creates an opportunity to attract new investors to Polish equities and an enormous chance for the entire market. The dynamic development of the Polish economy and attractive valuations of Polish companies, accompanied by positive rates of return and high dividend rates, represent a strong argument for investing on our market by global investors. But, of course, we are at the start of our developed market journey,” said Marek Dietl, president of the GPW Management Board.

FTSE Russell reviews its country classifications in view of the regulatory environment, infrastructure and quality of the capital market, the depository and clearing system, as well as the status of the derivatives market.

The reclassification of Poland’s capital market status to developed acknowledges the progress of the Polish economy and capital markets and is a major step forward in their development. Poland has all the features of a developed market, including secure trading and post-trade services, as well as an advanced infrastructure. GPW uses a state-of-the-art trading system and its listed companies meet the highest standards of corporate governance and disclosure requirements.

Following the upgrade, Poland will join the group of 25 most developed economies of the world including USA, UK, Germany, France, Japan, and Australia. Poland is the first central and eastern European country to be reclassified to developed market status.