BNP Paribas SA (BNP)’s Polish unit suspended a 300 million-zloty ($91 million) share sale after Warsaw’s benchmark stock index slumped this month on government plans to reduce the role of domestic pension funds.
The Warsaw-based bank, which sought to sell new shares to meet the Polish financial regulator’s requirement to boost the amount of its stock in trading, will set a new date for the offering later this year, it said in a statement on its website after bookbuilding for institutional investors ended yesterday.
Poland’s WIG20 Index (WIG20) has tumbled 12 percent in June, heading for its steepest monthly decline since February 2009, after Prime Minister Donald Tusk’s government announced plans to scale down the country’s pension funds system to curb public debt. The privately run funds are among the biggest investors in Polish stocks and bonds, with their combined assets exceeding 280 billion zloty ($85 billion) at the end of May.
“The turmoil related to the pension fund changes raised investors’ concerns and made them stay away from the share offering,” PKO Bank Polski SA analyst Jaromir Szortyka in Warsaw said by phone today. “This will continue to have an impact on the Warsaw Stock Exchange and BNP plans at least as long as the pension system’s overhaul is finalized.”
BNP Paribas Bank Polska SA had planned to sell as many as 8.58 million shares at 35 zloty to 45 zloty each, according to a term sheet obtained by Bloomberg News on June 20.
Poland’s cabinet will vote next week on the review of the pension system, which includes a mandatory “second pillar” of pension funds set up in 1999. Two of its three alternative policy courses recommended in the review would transfer the 16.2 million Poles enrolled in second-pillar funds back to the state-run pension system unless they file declarations to remain. The third would cancel 120 billion zloty of government bonds now held by the funds.
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