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Poland’s inventory market has emerged as one of many world’s top-performing bourses this yr, helped by the nation’s comparatively insulated place from the worldwide commerce struggle and an anticipated enhance from neighbouring Germany’s fiscal “bazooka”.
The benchmark WIG Poland index has climbed 28.6 per cent yr thus far — regardless of slipping on Monday after an unexpectedly close first-round presidential vote — putting it forward of different strongly performing markets equivalent to Chile and Greece. In distinction, the US’s benchmark S&P 500 is up about simply 1 per cent.
The rally has been pushed by a “important influx of overseas capital”, in response to Tomasz Bardziłowski, chief government of the Warsaw Inventory Trade, because of Poland’s wholesome financial system in addition to the fairness market’s rising dividend payouts and relatively low valuations. Polish stocks commerce at a 15 per cent price-to-earnings low cost to the MSCI Rising Markets index.
The market has additionally proved common because of the truth that about three-quarters of Poland’s commerce is carried out throughout the EU. That has made it much less susceptible than others to the commerce struggle launched by US President Donald Trump and a extra engaging guess for some buyers.
“The market is sufficiently small for overseas capital actions to have a visual influence,” mentioned Piotr Arak, chief economist at Poland’s VeloBank. “Trump’s commerce struggle additionally diverted capital flows from the US to rising markets like Poland and components of Latin America much less affected by tariffs.”
The WIG index is about $135bn in dimension, in contrast with $2.9tn for the UK’s FTSE 100 and greater than $50tn for the S&P.
Poland, which cut interest rates this month for the primary time since Prime Minister Donald Tusk returned to energy in 2023, can also be benefiting from an enormous enhance in deliberate spending by neighbouring Germany, its largest buying and selling accomplice.
Germany’s struggling financial system sparked jitters in Warsaw final yr. However these issues had given approach to hopes for a optimistic knock-on impact for Poland from the “bazooka fiscal stimulus” package deal drafted by the brand new authorities in Berlin, mentioned Kamil Stolarski, head of fairness market analysis at Santander Poland.
The Polish financial system grew 3.8 per cent yr on yr within the first quarter of 2025, the second-fastest fee within the EU after Eire and properly above the bloc’s common development of 1.4 per cent, in response to Eurostat knowledge.
In the meantime, analysts forecast that earnings per share for Warsaw-listed firms will develop on common by about 10 per cent in 2025. Monetary providers firms, which account for two-fifths of the WIG, are elevating dividends after posting bumper earnings. Polish banks had mixed earnings of 42bn zlotys ($11bn) in 2024, up from 27.6bn the earlier yr.
Poland ought to “stay resilient throughout these turbulent instances, because of its diversified financial system, a big home market and restricted direct commerce publicity to the US”, mentioned Beata Javorcik, chief economist on the European Financial institution for Reconstruction and Improvement.
Poland can have the strongest financial system this yr among the many EU’s previously Communist international locations, with annual development of three.3 per cent, in response to the EBRD’s newest forecasts.
Home politics have additionally been encouraging buyers. The return of Tusk and his pro-EU coalition has unlocked billions of euros in beforehand frozen EU funds. The federal government has begun deploying this cash — largely on infrastructure and power transition tasks — because it seeks to maneuver away from the nation’s reliance on coal.
Shares in state-controlled power teams have surged, with oil firm Orlen up 53 per cent and utility PGE rising 56 per cent because the begin of the yr.
The WIG misplaced 0.8 per cent on Monday, as consideration now turns to the presidential run-off election on June 1. Rafał Trzaskowski, who’s Tusk’s candidate, is going through an unexpectedly tight contest in opposition to Karol Nawrocki of the opposition Legislation and Justice (PiS) get together, after Trzaskowski solely narrowly received the primary spherical on Sunday. A Trzaskowski victory within the run-off would allow Tusk’s authorities to proceed with long-delayed reforms beforehand blocked by outgoing president Andrzej Duda, a PiS appointee. However a Trzaskowski defeat is seen as more likely to destabilise Tusk’s coalition and will even drive early parliamentary elections.
“A victory of the candidate of Tusk’s get together could be supportive for buyers’ sentiment in the direction of Polish property, whereas a defeat may provoke new issues about Poland remaining on the reform path,” mentioned Piotr Bujak, chief economist at PKO BP, Poland’s largest financial institution.
Each presidential contenders have positioned nationwide safety on the coronary heart of their campaigns, echoing Tusk’s November warning in regards to the “critical and actual” danger of world struggle. But buyers have just lately centered as an alternative on Trump’s diplomatic efforts to barter a truce between Russia and Ukraine. That would place Poland as a strategic hub for Ukraine’s eventual reconstruction.
“I feel that one key cause for the market rise is that buyers are actually betting on peace in Ukraine,” mentioned Andrzej Kubisiak, deputy director of the Polish Financial Institute, a think-tank.
“Poland’s sturdy financial displaying within the EU is boosting investor confidence, although the result of peace talks nonetheless poses a danger to additional positive factors on the Warsaw trade.”
