Photographer: John Guillemin/Bloomberg

Love of Stocks Returns for Poles as IPOs Spur Retail Traders

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  • Share of individual investors in stock trading at 5-year high
  • Warsaw market’s alluring gains outshine bank deposit returns

After going missing for years, Polish retail investors have returned to the Warsaw stock market in force.

While foreign investors still dominate turnover, individual Poles accounted for 18 percent of all trading in the first half of the year, the most since 2012 and a jump from 13 percent a year earlier, figures from the exchange show. They also turned avid participants in the exchange’s market for corporate bonds, accounting for a record 41 percent of all orders.

Warsaw’s benchmark WIG20 Index has surged 22 percent this year as Polish stocks started to catch up with other developing markets, emerging from a slump prompted by a pensions overhaul three years ago and increased political risk that followed 2015’s elections. Supermarket chain Dino Polska SA and mobile phone operator Play Communications SA were among new listings that captured the imagination of Poles seeking investment alternatives as negative real interest rates make bank deposits unattractive.

While just a fraction of the 1.4 million brokerage accounts in Poland are active, individual investors boosted volumes in small-cap stocks often overlooked by international institutions. Their enthusiasm for builder Polimex-Mostostal SA, computer games maker CI Games SA and tractor maker Ursus SA, fueled first-half turnover worth more than three times these companies’ market values.

Read more about Dino Polska’s IPO here

Retail investors provided the backbone of the Warsaw market in the 1990s, as the government sold stock in a series of state-owned enterprises during the transformation of Poland’s communist system to a market economy. Their second heyday peaked in 2010, when the debuts of insurer PZU SA and the Warsaw exchange operator itself attracted more than 200,000 individual traders. Play’s July sale, the largest ever offering by a Polish private company, drew 16,000 such investors, according to the PAP newswire.

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