Paving the way to Warsaw


The WSE, which views Hungary as a strategic market, aims to lure both issuers and investors to the CEE’s leading bourse. The Polish stock exchange is becoming a truly international platform with 36 foreign listed companies from 19 different countries.  

Q: How was your day in Budapest?

A: From time to time I come to Budapest, and Hungarian friends from Keler [the clearing house for Hungary’s bourse] or others connected to the Budapest Stock Exchange visit us in Warsaw to talk about what is going on in Hungary and in Poland. 

Today, I had meetings with five companies. Some of them are quite promising potential candidates to be listed in Warsaw, while others probably need more time. There are a couple of very interesting companies with a magnificent business, which are not restrained to the local market. They have much larger operations, have clients from all over Europe or part of their business is related to Poland or other European countries. 

Q: Are these companies you met today already listed on the BSE?


Ludwik Sobolewski was appointed president of the Warsaw Stock Exchange Management Board in June 2006. He is also the chairman of the Supervisory Board of the National Depository for Securities and a member of the European Center for Comparative Commercial and Company Law. 

In 2009, Sobolewski became the chairman of the Supervisory Board of BondSpot S.A. (previously known as MTS CeTO), a unique institution in Poland licensed to organize and manage a regulated market and alternative trading system (MTF) and is also entitled to create others platforms for electronic trading in financial instruments.

From 1994 to 2006, Sobolewski was the executive vice president of the management board of the National Depository for Securities. Prior to that he worked as an advisor to the management board of the WSE and in the Office of the Council of Ministers of the Republic of Poland.

Sobolewski graduated from the law and administration faculty of the Jagiellonian University in Krakow and the Panthéon-Assass University in Paris. He holds a PhD in law and legal counsel.

A: Some of them are. We also had a meeting with MOL and E-Star, which are already listed in Warsaw. We used this opportunity to be in Budapest to get an update on their plans. I think that they are seriously considering the WSE as a platform to raise capital for development. They also use the WSE to broaden their investors’ base.

Q: What sectors are these companies in?

A: Very different sectors. However, I was able to find the equivalent of each of these businesses among the listed companies on the WSE. This is important to the companies, because it is always better to be on a market where investors are already familiar with a given sector and it is also good for us. In addition, the Hungarian firms we met are bigger than their peers already listed in Warsaw. 

Q: Do you see a new Hungarian company listed on the WSE within a year?

A: This is the basic purpose of our visit to Hungary. I do not know if a new listing from this group may happen within a year, but my experiences is that in some cases, the process can take up to two or three years from the first contact to the actual listing. However I am sure that it is worth waiting for. It is important to start a dialogue early to show the benefits of such a project to potential issuers. However, the next newcomer may not even come from this group of companies, it may be a business we do not even know about yet.

Hungary certainly is one of the most important countries and is a partner for us in the region together with Ukraine, Czech Republic and probably Romania. Their economies have the most potential for creating this international exchange. We do not want to build a national exchange, we want to have equal standards for issuers should they come from domestic or foreign markets, with not a shadow of discrimination. 

Q: As a potential Hungarian issuer, why would I choose the WSE rather than the BSE?

A: The BSE has a very high concentration ratio with three or four companies accounting for 95% of the trading volume. which means that it would be extremely hard for a debuting company to draw sufficient attention from investors. It has been clear for several years that MOL, OTP, Richter and Magyar Telekom are the ones to predominantly attract investors. The network of intermediaries is not developed, either. 

And, I feel, there is not much real prospective about the future of the BSE in relation to the Wiener Börse, which is almost the only shareholder. This must have a negative impact on its competitiveness here in Hungary. The BSE is very often quoted as an example where there is a strategic investor that does not really contribute to the development of the local market. This is how the partnership between the BSE and the Wiener Börse is commented on, not only in Poland, but unfortunately in other European countries, too. 

This is why I believe that for a business it is much more sensible to go to a financial market with all the infrastructure needed, and which is not actually in regression. 

Q: Have you experienced an openness in the Hungarian market?

A: Yes, absolutely. My friend, a former CEO of the BSE, said, “You know, the best relations Hungary has with a neighboring country is with Poland.” I said, OK, I can confirm this, but we are not so much neighbors, not any more. He said, it does not matter and I fully agree with that.

Q: Do you plan to organize more roadshows like this in the region?

A: These roadshows are not really new, as we started to organize special promotion of our markets in the region in 2006, but probably less actively in Hungary. We have a network of partners working in certain countries in the region helping us to bring issuers to Warsaw. We have a representative office in Kiev. We have organized two roadshows in the Czech Republic. We visit Slovakia and the countries of the former Yugoslavia very often. 

I think it makes sense to come back and to repeat our message. It is especially important for us to be here, when we do not exactly have a peaceful economic situation. I see so many IPO projects suspended. As in to 2008, we will continue our efforts because we want to show that we can be a remedy, we can be an opportunity. We want to make it clear that we are very close to businesses, not only when everything goes pretty well, but also when there are problems. At such a critical time, selecting a good capital market is even more important than in better times. 

Q: How do you see the role of the WSE in the region in the long-term? 

A: We do not have the slightest intention to merge or to be taken over by anyone. We do not want to acquire anybody else, as it would contradict our strategy. The idea behind our privatization was to send the WSE to the market as a listed company.

I would not say that my concern is Vienna, now. My concern is rather how to position the WSE on a broader European scene. Now, when turnover of the WSE is more than twice that of the Vienna exchange, the competition between us is not my problem, but theirs. 

The main challenge for us is how to compete with bigger exchanges and with MTFs [alternative trading systems] and several other platforms. We are not yet affected by their activity, but we have to be prepared and we need to improve our technology and regulations. We need to broaden the supply of financial instruments and to diversify even more. We also have to develop the business line that is already in place. 

Our main goal is to be one of the obvious choices for small- and mid-size European issuers. Especially at the time of the huge consolidation on the market, the large exchanges may not be able or willing to provide services to small entrepreneurs. I can see a very big niche for us here. 

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