Poland promoted to Developed Market status by FTSE Russell

FTSE Russell has reclassified Poland from Emerging Market to Developed Market status from 24 September 2018. With the upgrade, Poland is classified as one of the 25 most advanced global economies including the USA, UK, Germany, France, Japan, Australia. Furthermore, Poland is the first country in almost a decade, and the first Central and Eastern European country to be upgraded to Developed Market status.

The upgrade of Poland to Developed Market status represents an acknowledgement of the progress of the Polish economy and capital markets and is a major step in their development. Poland has all the features of a developed market, including secure trading and post-trade services, as well as advanced infrastructure. GPW uses a state-of-the-art trading system and its listed companies meet the highest standards of corporate governance and disclosure requirements.

“Poland’s promotion today to Developed market status within FTSE Russell’s global equity benchmarks is a significant achievement. The Polish Ministry of Finance and the Warsaw Stock Exchange have long been committed to improving Poland’s capital markets infrastructure and strengthen its economy and today marks the culmination of their efforts to meet the rigorous criteria needed for this classification,” said Reza Ghassemieh, Chief Research Officer, FTSE Russell.

“The dynamic development of the Polish capital market has led to its upgrade to Developed Market status, which represents a fundamental change in the perception of Poland among global investors. Poland’s reclassification will spark the interest of new investors in Polish issuers and open enormous opportunities for the entire capital market. I do believe that in the long term it will attract bigger capital inflows to GPW,” said Marek Dietl, President of the Warsaw Stock Exchange.

FTSE Russell reviews the classification in view of the regulatory environment, infrastructure and quality of the capital market, the depository and clearing system, as well as the status of the derivatives market.

FTSE Russell indices serve as a benchmark for leading global investment funds. The classification results in moving companies from FTSE indices of Emerging Markets to FTSE indices of Developed Markets.

The final list of 37 Polish companies to be included in the Developed Market indices (by FTSE Russell size category) was published on 25 August:

  • 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.

FTSE Russell announced the upgrade of Poland from Emerging Market to Developed Market status on 29 September 2017, as a result of the annual classification of countries. The decision took effect in conjunction with the FTSE Global Equity Index Series semi-annual review on 24 September 2018.

Link to the website featuring the FTSE Russell decision

To mark the upcoming reclassification of Poland, on 11 May 2018, FTSE Russell published a White Paper on Poland and organised the conference “Talking Poland – Charting Success, From Emerging to Developed.” On 24 September 2018, as Poland achieved Developed Market status, FTSE Russell hosted the Market Open Ceremony at the London Stock Exchange to celebrate this historic milestone and capital markets’ development in Poland. The event was attended by: Reza Ghassemieh – Chief Research Officer, FTSE Russell; Marek Dietl – President of the Management Board, Warsaw Stock Exchange; Michał Krupiński – Chief Executive Officer, Bank Pekao SA; Maciej Trybuchowski – President of the Management Board, KDPW; Paweł Borys – President of the Management Board, Polish Development Fund; Jakub Papierski – Vice President of the Management Board, PKO BP; and Paweł Surówka – Chief Executive Officer, PZU SA.

FTSE Russell is not the only index provider to upgrade Poland from Emerging Markets to Developed Markets. The upgrade of Poland by Stoxx, the Deutsche Boerse Group index operator, coincided with the FTSE Russell decision at the close of trading on 21 September 2018. As a result, from 24 September, Poland is classified by both companies as a Developed Market.

Poland remains classified as an Emerging Market by MSCI, which in turn expands the range of investors interested in the Polish market.

“The Polish stock exchange is in a comfortable position because Poland is a Developed Market in the classification of both FTSE Russell and Stoxx and an Emerging Market according to the global index provider MSCI. Most of the world’s investment funds (ca. 87 percent) invest in the countries with the most developed capital markets. We used to have access to 12-13 percent of the global investment cash pool and now, from September, we will have access to 100 percent. However, the reorganisation of investment portfolios following the FTSE Russell decision will take a few years,” said Marek Dietl, President of the Warsaw Stock Exchange.

Stoxx has upgraded Poland from Emerging Markets 1500, an index which covers global stocks, to Europe 600, which only includes companies from European Developed Markets. The eight Polish stocks which joined the 600 leading European companies are: Bank Pekao, BZ WBK, CD Projekt, KGHM Polska, LPP, PKN Orlen, PZU and PKO Bank Polski.