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Poland, from emerging to developed market status

posted onMay 16, 2018

In September last year,  index provider FTSE Russell announced the upgrade of Poland’s market status from emerging to developed as part of the September 2017 FTSE Country Classification annual review of markets.

This significant achievement was the first promotion of a country from Advanced Emerging to Developed market status to occur within the Country Classification scheme for nearly a decade. The transition will take place in conjunction with the FTSE Global Equity Index Series (GEIS) semi-annual review in September 2018.

The upcoming reclassification means the Warsaw Stock Exchange has fulfilled the criteria for mature markets. To mark the occasion, FTSE Russell published a white paper on Poland earlier this month and  organised a conference at the London Stock Exchange entitled Talking Poland – Charting Success, From Emerging to Developed, aimed at international institutional investors who use FTSE Russell indices in their investment strategies. 

The host of the conference was Caroline O'Shaughnessy, FTSE’s Global Head of Sales & Marketing, and the speakers included Mark Makepeace, CEO of FTSE Russell, Arkady Rzegocki, Ambassador of the Republic of Poland to the United Kingdom of Great Britain and Northern Ireland, Marek Dietl, President of the Warsaw Stock Exchange and Polish representatives of brokerage houses, clearing houses and investment firms. During the conference, the most important changes that took place in the Polish economy and investment opportunities related to the reclassification of Poland were discussed.

“Poland is the first country to be promoted from Emerging to Developed status for almost a decade. It is a significant achievement and marks the culmination of a long-term commitment from the Polish Ministry of Finance and the Warsaw Stock Exchange to improve Poland’s capital markets infrastructure and strengthen its economy,” said  Makepeace.

Poland Stock Exchange President

(Marek Dietl, President of the Warsaw Stock Exchange)

“Poland's upgrade to developed markets gives new investors the opportunity to engage in shares of Polish companies and is a great opportunity for the entire capital market” said Dietl.

Following the upgrade,  Poland, the eighth largest economy in the European Union, will join the 25 most developed economies of the world including Germany, France, Japan, Australia and USA. Poland is also the first central and eastern European country to be reclassified to developed market status.

The FTSE Country Classification system was introduced in 2004 as a structured, objective and transparent framework for determining equity markets’ development status. Each year, FTSE Russell releases two Country Classification announcements: an interim announcement at the end of March and an annual announcement at the end of September. 

When revising the FTSE Country Classification classification, Russell takes into account regulatory environment, infrastructure, quality of the capital market, the shape of the depository-clearing system and the status of the derivatives market

As of March 2018, the FTSE Country Classification framework covered 24 Developed, 11 Advanced Emerging, 12 Secondary Emerging and 29 Frontier markets. FTSE Russell is a unit of London Stock Exchange Group’s (LSEG) information Services Division.  FTSE Russell is a wholly owned subsidiary of LSEG.   

Poland at a glance 
Population: 38.5 million 
GDP growth: +3.2% (2018, forecast) 
Industrial production: +7.4% (February 2018, year on year) 
Consumer price inflation: +1.3% (March 2018, year on year) 
Unemployment rate: 6.8% (February 2018) 
Economic output by sector: agriculture, 2.6%; industry, 38.5%; services, 58.9%. 
Major industrial exports: Machinery, electronic equipment, vehicles, furniture, and plastics. 
Warsaw Stock Exchange: Third in Europe in 2017 by number of IPOs 

(Source: FTSE Russel whitebook “Poland: The journey to Developed Market status”)

UPDATE 26/09/2018

FTSE Russell promoted Poland from Emerging Market to Developed Market status on 24 September 2018. This is final list of 37 Polish companies to be included in the Developed Market indices (by FTSE Russell size category). 

The London Stock Exchange's markets were opened by the Warsaw Stock Exchange (GPW) on Sept. 24  to celebrate this historic milestone Photo: LSE Group

Large caps: PKO Bank Polski
Mid caps: PKN Orlen, Grupa Lotos, PGE, PGNiG, KGHM Polska, Bank Pekao, PZU, BZ WBK, mBank, LPP, Dino Polska, CD Projekt, Cyfrowy Polsat.
Small caps: Bank Millennium, AmRest Holdings, Bank Handlowy, JSW, Alior Bank, CCC, Play Communications, Orange Polska, Grupa Azoty, Enea, Tauron Polska Energia, Kernel Holding, Kruk, Asseco Poland, Budimex, Eurocash, Ciech, Energa, PKP Cargo, Lubelski Węgiel Bogdanka, GPW, Boryszew, Neuca.

Poland has been a major destination for foreign direct investment in the European Union thanks to a skilled labour force, lower production costs and a business-friendly environment. The country's reclassification proves Poland's dynamic economic growth and will renew the interest of foreign investors in the Polish capital market.

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