Main index on Warsaw Stock Exchange rises to historic high after EU funds announcement

The main index on the Warsaw Stock Exchange (GPW) reached an all-time high on Friday, the latest time it has broken that record in recent weeks, reflecting positive global sentiment and data showing improvement in domestic consumption and recovery in Polish industry.

On Friday, the market was also boosted by the announcement that the first €5 billion for Poland from the EU’s post-pandemic recovery fund will arrive before the end of the year.

Since the beginning of the year, the GWP’s main index, the WIG, which lists 330 companies, has risen 35.13%. The fastest increases have been recorded since October’s parliamentary elections, when the national-conservative Law and Justice (PiS) party, which had been in power since 2015, lost its majority.

Poland’s stock market WIG index since 1991 (source: stooq.pl)

On Friday, following the announcement by new Prime Minister Donald Tusk and European Commission President Ursula von der Leyen that Poland will receive EU funds by the end of the year, the WIG peaked at a historic high of 79,011.65 points.

GPW’s blue-chip WIG20 index, which lists the 20 biggest companies on the Polish stock exchange, also surged on Friday, reaching its highest level since early 2022, before the outbreak of war in neighbouring Ukraine. Since the beginning of this year, the index has risen by 29.49%.

On Friday’s close, the WIG20 was at 2,320.45 points, still 69% below its historic high of 3,917.87 points recorded in 2007, just before the onset of the global financial crisis.

Both indexes, however, lost most of their Friday gains before the end of the trading day, closing with rises of 0.31% and 0.34%, respectively.

New Polish PM @donaldtusk and @EU_Commission President @vonderleyen have announced that the first €5bn for Poland from the EU’s post-pandemic recovery fund will be paid by the end of this year – in what Tusk described as a “Christmas present” https://t.co/OW9sodey2G

— Notes from Poland 🇵🇱 (@notesfrompoland) December 15, 2023

The indexes have also recently risen thanks to the recovery in Polish manufacturing. In November, Poland’s Purchasing Managers’ Index (PMI) grew 4.5 points to 48.7, recording the sharpest rise in the 25-year history of the survey, excluding the volatile period of the pandemic.

Although the PMI reading remained below the 50-point mark separating recession from expansion, its rapid rise gave hope for a return to growth in Polish manufacturing, which, according to data broker Trading Economics, in 2022 accounted for 17.69% of the country’s GDP.

In addition, retail sales increased in October for the first time in nine months, supported by slowing inflation and wage growth, data from Statistics Poland (GUS), a state agency, showed.

Poland’s stock market recorded its strongest post-election opening and the zloty strengthened as markets responded to exit polls suggesting the opposition will be able to form a new government https://t.co/jq5qqq2bfP

— Notes from Poland 🇵🇱 (@notesfrompoland) October 16, 2023

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