The FINANCIAL -- Capital
market, privatization and pension system are on the new to-do-list of
the Ministry of Economy and Sustainable Development of Georgia and the
Ministry of Treasury of Poland. According to Poland’s Ministry of
Treasury, a new team composed of Polish professionals will be created to
support Georgia in all three directions.
“We are trying to convince Georgian companies to think about the potential of Poland’s capital market,” Paweł Tamborski, Deputy Minister of Treasury, told The FINANCIAL in an exclusive interview. “Georgian companies should consider Warsaw as a market to raise capital from. In terms of recent experience, together with Georgian authorities, we offered support in developing capital market, and discussed the issues of privatization and the pension system as well. Both ministries are ready for collaboration in this regard. A team from the Polish side will be created, which will then share their experience in this direction and support the Georgian Ministry in these matters,” he added.
“We are ready to exchange experiences with the Georgian authorities with regard to capital markets. Our experience with privatization, with the creation of capital markets, is significant, and may be useful for Georgia. I think that this country is traditionally close to Poland. Georgia has a very good reputation in Poland. The country has great potential and we will do our best to help it to use this potential as much as possible,” Mr. Tamborski said.
Q. How has the relationship between the two countries evolved since the political changes took place in Georgia?
A. I know there has been recently a kind of slowdown in our bilateral relationships. During IPO Summit, Warsaw 2013 the new Georgian Minister of Economy and Sustainable Development and the Polish Minister of Treasury, who is also new in his office, had their first meeting together. The idea to create a joint team is really brilliant. We are creating a team of professionals who are ready to support Georgia and to share our experience with the Georgian authorities. This means that the relationship has already recovered and we are looking forward to the next stage in our co-operation. I do hope that this relationship will not be limited to talks only, but that real significant steps will be taken which will then have very positive outcomes for both countries.
Q. Georgian companies may soon become listed on the WSE. Why should Georgian companies be interested in this?
A. First of all Georgian companies could be very interesting for investors, especially those who are looking for emerging market opportunities. Georgia is certainly a country of great potential. The great potential of the country and the economy of course translates into the potential of companies. There are some discussions going on with financial institutions in Georgia, who have considered potential linting in Warsaw.
I hope that ultimately Georgian companies will be listed in Warsaw. I think that it is already possible for Georgian companies to be listed here this year. Warsaw gives access to both domestic and international investors. Georgia is very close to Poland, not necessarily from a geographical perspective, but from a like-minded perspective. Polish institutional investors are looking for growth opportunities. We are already one of the biggest investors in Turkey, for example. So if it is possible in Turkey, then why not in Georgia?
I think that Georgian companies could find a great amount of capital available to them in our country, from our institutional investors as well as from retail investors. On top of that, in Warsaw we have international investors as well who are looking for proposals coming from emerging markets like Georgia, for example. Here you have a combination of international funds that require the same type and same size of demand as in London for example and other markets. But on top of that Georgian companies can gain access here to Polish capital as well, which is quite significant especially when talking about emerging Europe transactions.
Q. Why is Poland a good place for both investors and issuers to invest and raise capital?
A. Because Poland is the largest equity market in Central and Eastern Europe. Domestic market capitalization reached EUR 128.5 billion in March 2013 and the value of session equity trading - EUR 13.4 billion.
Warsaw became an interesting place for issuers and investors to discuss the current situation of the capital market, new products and transactions. It is an excellent place in terms of exchanging experience. Anyone interested in participating in the activities of Poland’s capital market is welcome at IPO Summit, Warsaw 2013.
International investors are still coming mainly from emerging markets. In our ministry we have developed a special programme to promote privatization and transactions coming from our privatization programme. The recent privatization experience in Poland is a success story. The State Treasury’s Privatization Programme conducted through listings on the WSE serves as a driving force for Poland’s capital market. Privatization generated EUR 13 billion of revenues since 2008. The privatization goal is EUR 1.2 billion of revenues by 2013.
Q. How successfully does Warsaw attract new issuers if we take into consideration all the advantages of its market that you have already described?
A. Warsaw successfully attracts new issuers as the leading listing venue in Europe. Last year Warsaw Stock Exchange was the number one in Europe by number of IPOs and Europe’s number 5 by value of IPOs. The number of foreign companies listed on the WSE today is 53. Furthermore, Poland has had one of the largest numbers of IPOs and ABOs in Europe in 2009-2013, statistics show.
As for international issuers, 45 were on the main market and 8 on the alternative market. The listing from 20 countries includes Ukraine , the Czech Republic, Israel, Hungary, Slovenia, Lithuania, Bulgaria, Estonia, France and the UK.
International trading flows show that approximately 50 percent of all trading volume was generated by international investors. 18 percent of trading flows on WSE’s main market was from the active retail investor segment.
Our aim is to consistently strengthen the position of Warsaw as CEE’s financial centre and main business hub. With the IPO Summit, Warsaw 2013 we are bringing together global investment firms and trans-regional businesses searching for growth capital.
Q. As for foreign trade, it is acknowledged that export growth was faster in 2013 than import. What are the country’s other achievements in the trading system?
A. Poland has a state-of-the-art and foreign investors and issuers friendly market infrastructure. The Warsaw Stock Exchange has the highest quality trading system UTP - the top class technology used by the world’s leading stock exchanges. In the clearing sector it is KDPW_CCP - a modern clearing house using central counterparty mechanisms, and in the settlement sector it is CSD - settlement of transactions and operation of central securities depositary.
It has a broad and diversified investor base with strong participation from all three main investor categories: individuals, domestic and foreign institutions. Polish institutional investors are still responsible for 34 percent of trading, foreign investors - 48 percent, and Polish retail - 18 percent. This is a statistic of the investor structure in equity trading. As for the share of foreign investors in turnover by country, the statistics show that the UK has the largest share with 59 percent; then comes France with 19 percent, the Czech Rep. - 6 percent, Austria - 3 percent and others - 13 percent.