Ciech Debuts in Frankfurt as Polish Companies Look Abroadby
Polish soda producer says listing to help gain new investors
Warsaw bourse suffers from lower valuations, weaker liquidity
Polish chemicals producer Ciech SA started trading on the Frankfurt Stock Exchange on Tuesday as an increasing number of companies seek to broaden their investor base away from the lethargic Warsaw bourse.
The attractiveness of the Warsaw Stock Exchange has been steadily evaporating in recent years after an overhaul of the nation’s pension funds in 2014 cut money flows to its once-sound stock market and undermined investor confidence in Poland’s capital market. The ruling Law & Justice party, which came to power last year, stopped the sales of state stakes in major firms that had helped draw foreign investment to the biggest stock exchange in central and eastern Europe.
Shares in Ciech, controlled by Kulczyk Investments SA, were unchanged at 14.75 euros as of 3:31 p.m. in Frankfurt. The Polish soda producer is seeking to boost liquidity of its shares and expand its credibility among global investment funds, the company said in a statement. The stock gained 0.6 percent in Warsaw, trimming a 26 percent decline this year.
“As a company with global aspirations, we are ready to face an international verification of our potential,” Ciech Chief Executive Officer Maciej Tybura said in a statement.
The country’s market for initial public offerings this year is the worst in at least 11 years. Only seven companies have sold shares totaling 466.8 million zloty ($123 million) while equity turnover slumped 17 percent in the first seven months of 2016 from a year earlier, the Warsaw bourse’s data show.
Last week, Poland’s second-biggest listed property developer Globe Trade Centre SA entered the Johannesburg bourse to improve its access to South Africa’s investors. In February, Work Service SA dual-listed on the London Stock Exchange to “gain global investors.” The nation’s biggest property developer Echo Investment SA together with its shareholder plan to list shares in their fund Echo Polska Properties on the Johannesburg and Luxembourg exchanges later this year. Livechat Software SA, an on-line chat software developer, is considering a dual listing on Nasdaq, Parkiet newspaper reported in February.
“Issuers are picking the best platform for finding investors and generating demand for their shares, and it won’t always be Warsaw,” Tomasz Witczak, deputy chief executive officer at Pekao Investment Banking SA, said by e-mail. “Foreign listings and dual listings are one of the answers for weaker local demand in some cases.”