Capital markets play key role in Poland's recovery from pandemic

POLAND has seen strong economic growth over the past decades, with income levels converging towards richer European countries. However, as in the rest of the world, the Covid-19 crisis had a significant impact on the Polish economy, ending a growth streak going back to 1992. As the world emerges from the pandemic, maintaining the economic momentum from previous years will be crucial. Capital markets will play a key role in this process, enabling companies to access capital for investment and innovation. This is true not only in the recovery from the Covid crisis, but also for the broader challenge of the green and digital transitions.

Poland's growth record comes partly off the back of its active capital markets. It has one of the largest equity markets in the Central and Eastern European (CEE) region, accounting for 54 per cent of its total market capitalisation. It is the only EU member state to rank in the global top 10 in terms of number of initial public offerings (IPOs) over the last 10 years. In 2018, the market was promoted from emerging to developed status by global index providers. Institutional investor participation in the market is significant, with 35 per cent of the market capitalisation in the hands of institutional investors, in line with other advanced European markets.

The country has also been a frontrunner in enabling smaller companies to access capital markets with its SME Growth Market NewConnect, which is now the second largest such market in Europe, representing 20 per cent of all European companies on these markets. In terms of governance, the stock exchange adopted a new Code of Best Practices in 2021 which, among other things, aims at strengthening corporate disclosure related to ESG (environmental, social and corporate governance).