For a lot of buyers, Poland is just not the primary nation they image when considering of thriving inventory markets. In spite of everything, political turbulence has been consuming on the nation for many years now, and its communist historical past nonetheless casts a protracted shadow.
However now buyers are beginning to pay extra consideration to the Warsaw Inventory Alternate, the place super progress has been flying beneath the radar.
Because the begin of 2025, the WIG index, Poland’s foremost inventory market index, has grown by round 25%, a staggeringly excessive quantity. For context, the S&P is simply up round 1.75%, the FTSE 100 is up round 6.5%, and the EURO STOXX 50 is up round 10% in the identical time interval.
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Some companies listed on the Warsaw alternate have seen progress that towers above the broader market’s already spectacular good points. Orlen, {a partially} state-owned vitality agency, is the thirty second largest firm in Europe by income and has seen its inventory value develop by virtually 60% for the reason that begin of the yr.
PZU, a Warsaw-listed insurance coverage firm that can be partially state-owned, has seen its inventory value develop by round 31% for the reason that begin of 2025. An identical story will be advised for Dino, one in all Poland’s largest grocery store chains, which has additionally gained round 30% for the reason that yr started.
Poland’s robust inventory efficiency isn’t a model new phenomenon both. Within the final 5 years the WIG index has grown by round 94%, outpacing Germany’s DAX index (up round 89%) and France’s CAC 40 (up round 49%).
The long-term progress figures additionally compete with America’s inventory market. The S&P 500 grew slower than Poland’s within the final 5 years, up by round 87%, although the tech-heavy NASDAQ composite edged forward of Poland in the identical interval, up by virtually 99%.
Pawel Majtkowski, analyst at eToro, says the Polish inventory market has “surged” this yr because of “robust financial progress, low valuations and renewed investor curiosity in Europe post-2023 elections”.
However some doubt has now been solid over whether or not the rally can final after the knife-edge election of nationalist president Karol Nawrocki on 1 June. Can Warsaw proceed its profitable streak, or will a brand new president stifle progress?
Poland’s political panorama has been in flux since 2023
Because the 2023 common election, Poland has been ruled by prime minister Donald Tusk and a coalition of liberal events, introduced collectively earlier than the election to kick out the then-incumbent Regulation and Justice social gathering (PiS) who had been in energy since 2015.
Since 2015, the president of Poland has been Andrzej Duda, a member of PiS, who gained the utmost two phrases in workplace. A celebration man by and thru, Duda supported the PiS administration till the social gathering was ejected from authorities in 2023.
Tusk and his social gathering, Civic Platform, had campaigned on the promise to detoxify the sinews of energy in Poland after the earlier authorities had stuffed cronies into impartial organisations, together with the courts, state-owned companies, and the media.
Within the years since, a few of this reforming agenda has been realised, whereas different components have been disrupted as a result of political infighting amongst his coalition and presidential vetoes.
On 1 June 2025, PiS candidate Karol Nawrocki gained the presidential election with simply 50.9% of the vote in comparison with the Civic Platform-backed candidate’s 49.1%.
This has apprehensive buyers. The WIG 20 index of the 20 largest companies listed in Warsaw fell 2% within the wake of the outcomes.
What’s the future for Poland’s inventory market?
With a nationalist social gathering candidate as soon as once more profitable the presidential election, whereas a liberal social gathering stays in authorities, some commentators imagine that political instability will improve, probably disrupting the inventory market’s progress.
Dealing with 5 extra years of a PiS presidency beneath Nawrocki, Tusk’s liberals should abdomen extended political opposition to their reforms. Gone are goals of a president facilitating the liberal political reconstruction of the Polish state.
What’s extra, the election of an opposing social gathering into the presidency reveals that Tusk’s already eroding mandate for reform has weakened additional. Following the election outcomes, Tusk introduced {that a} vote of confidence will happen on 11 June, hoping to shore up help and breathe new life into his coalition.
Like his predecessor, Nawrocki may have the facility of the presidential veto to squash laws proposed by Tusk and his authorities, now for everything of the Civic Coalition’s remaining time period.
Majtkowski at eToro, says the election will “introduce a recent layer of political uncertainty with potential market implications, dampening international investor curiosity within the Polish inventory market as worldwide capital more and more elements political agendas into danger assessments”.
He provides that although the workplace of the president has little actual affect over financial coverage, the outcomes will nonetheless “weigh on sentiment within the close to time period”.
That is partially due to the construction of the Polish inventory market, the place a big share of firms listed in Warsaw have vital state possession.
Take Orlen for instance – the Polish state has a 49.9% stake within the vitality firm and is its largest shareholder. PKO Financial institution Polski, Poland’s largest financial institution, can be listed in Warsaw and the state holds round a 31% stake within the firm.
On account of such widespread state possession, Poland’s inventory market is “significantly delicate to political turbulence”, in line with Majtkowski, which he says “might have an effect on inventory costs and even the monetary outcomes of sure companies”.
He additional clarifies that Poland’s largest companies are extra uncovered to this danger, warning the “WIG 20 could also be hit tougher than the broader WIG”.
Moreover, the election outcomes have brought about a “robust shock” inside Tusk’s ruling coalition and liberal voters.
On account of this, Majtkowski says “we are able to anticipate deep and probably swift adjustments inside the authorities” with doable implications on the share costs of publicly traded firms with vital state possession.
What’s extra, Majtkowski believes the political uncertainty in Poland has diminished the chance of an rate of interest minimize in June by the nation’s central financial institution. Greater rates of interest will preserve the financial system constrained because the central financial institution tries to maintain a lid on inflation. Knock-on results can be felt within the inventory costs of Poland’s banks that are a “pillar” of the Warsaw Inventory Alternate.
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