Poland Taps Former Central Banker to Run Warsaw Stock Exchange

  • Government picks Malgorzata Zaleska as candidate for CEO post
  • New boss to grapple with next stage of pension system overhaul

Poland’s new government chose Malgorzata Zaleska as its candidate to be the Warsaw Stock Exchange’s next chief executive officer at a time it moves ahead with plans to revamp local pension funds.

As a member of the National Bank of Poland’s management board, Zaleska will “bring calm” to central Europe’s biggest equity market, Treasury Minister Dawid Jackiewicz said in Warsaw on Thursday. She has “the ability to connect academic achievements with practical work in the financial market” and will present her plans “in several days,” according to Jackiewicz. Zaleska, a Warsaw School of Economics professor, was also among candidates for the new Monetary Policy Council, a central bank panel that sets interest rates.

Political risks connected to state-controlled companies, which make up more more than 60 percent of the Warsaw’s main stock gauge, sent the WIG20 Index tumbling 20 percent last year, the eighth worst-performer worldwide. The previous CEO, Pawel Tamborski, resigned last month after Law & Justice won October’s election on a promise to bolster the state’s role in the economy. Since then the new cabinet reshuffled managements at government-run companies, including the country’s largest fuel refiner, PKN Orlen SA.

“The biggest challenge ahead of Zaleska is to tame investor concerns about political risk and to mitigate any possible negative effects from the forthcoming pension overhaul,” Lukasz Janczak, an equity analyst at Haitong Bank SA in Warsaw, said by phone. “The problem is that the CEO’s position may not be strong enough to influence crucial decisions for the equity market.”

‘Disastrous Effect’

The government is seeking changes to the pension system, with an option to give Poles the choice to keep their savings in a pension fund, or transfer their assets to the state pay-as-you-go system ZUS, Henryk Kowalczyk, an adviser to Prime Minister Beata Szydlo told Gazeta Polska Codziennie on Nov. 30. Treasury Minister Jackiewicz will take “an active role” in a discussions about the next phase of the revamp slated for the middle of this year, he added on Thursday.

“Potential transfer of assets to a state entity would have a disastrous effect and would cause the marginalization of Warsaw as an equity market,” Rafal Wiatr, the head of equity research at Bank Handlowy SA, said by phone. The Polish unit of Citigroup Inc. was the most active stockbroker in Warsaw last year.

Local pension funds, holding 107.7 billion zloty ($27 billion) in equities at the end of November, according to the financial markets regulator, are one of the biggest investors on the Warsaw bourse. Two years ago, the previous cabinet canceled government bonds held by these funds to lower public debt.

Warsaw Stock Exchange, in which the government has a 51.8 stake, will hold a vote on the new CEO on Jan. 12. The bourse’s market valuation dropped 21 percent last year to 1.5 billion zloty. It’s main WIG20 index declined 20 percent, most since 2011.

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