Number of IPOs on regulated and alternative markets in Europe (including new issues and sale of existing shares)

The Catalyst market reported significant growth of the main market parameters in 2013. The number of issuers grew to 176 (an increase of 20) and the value of listed non-Treasury issues grew by 12.6% to another record-high level of PLN 58.9 billion.

Development of products and services

In 2013, the Exchange largely expanded its offer of services and financial instruments. The expansion of the offer was partly driven by the implementation of the new trading system.

New products and services introduced by WSE in 2013:

1. In February 2013, new structured products issued by Raiffeisen Centrobank AG were introduced to trading on the exchange, adding the following underlying instruments to available investment opportunities: sugar, coffee, cocoa, Polish stocks and WIG20.
2. On 17 May 2013, Twin Win certificates with WIG20 as the underlying were for the first time introduced to trading on WSE. The certificates were issued by Raiffeisen Centrobank AG. The main features of the certificates include a fixed maturity, lower investment risks compared to direct investments in the underlying, and potential returns both to the upside and moderate downside.
3. On 26 July 2013, a new type of financial instruments on the Polish market, Reverse Convertible Notes (RCN) issued by Raiffeisen Centrobank AG, were newly listed on WSE. The underlying of the new notes is the stock of two Polish companies, PKO BP and KGHM. The novelty is a high, fixed interest coupon paid at maturity, calculated on the basis of the par value of the notes irrespective of the price of the underlying stock. The maturity date of the new notes is 31 December 2014.
4. As of the beginning of September 2013, WSE Members, their clients and data vendors can use colocation and High Performance Access (HPA) services in UTP. The service involves the installation of hardware and software in direct proximity to the trading system, ensuring fastest possible communication with WSE’s trading system. The launch of HPA is yet another technology initiative of the Exchange bringing WSE access infrastructure in line with the highest global standards. The HPA service allows WSE clients to pursue diverse investment activities including High Frequency Trading (HFT) popular on global markets as well as multiple investment strategies based on algorithms.
5. On 23 September 2013, WIG20 futures with a multiplier of PLN 20 were introduced to trading on WSE. With the change of the multiplier, the contract nominal value and tick size doubled to PLN 20. The main advantage of the new futures is that the tick size is double that of the currently listed futures, which makes the contracts much more attractive cost-wise. The objective of the change of multiplier is further growth and improvement of the derivatives market through greater safety of investment and lower transaction costs. WIG20 futures with a multiplier of PLN 20 will eventually replace the currently listed instruments with a multiplier of PLN 10. The migration to futures with the new multiplier will be completed by 20 June 2014 at the latest. Futures with a multiplier of PLN 10 and futures with a multiplier of PLN 20 will be listed in parallel until that time.
6. On 18 October 2013, futures contracts on WIBOR reference rates and futures contracts on short-term, mid-term and long-term Treasury bonds were introduced to trading on WSE. The new futures contracts on WIBOR rates are mainly addressed to financial institutions and also offer an alternative for companies which can use them to hedge their loans where the interest rate is based on WIBOR reference rates. Futures contracts on bonds may be interesting to individual investors who wish to earn on changes of prices of futures contracts derived from changes of Treasury bond prices. The introduction of futures contracts on interest rates and on Treasury bonds into trading is part of WSE’s efforts aimed at the provision of tools which support the growth of the Polish market and continued development of WSE business lines as well as consistent improvement of the competitiveness of WSE’s offer.

Modification of WSE indices in 2013:

1. On 24 June 2013, WSE introduced modifications to indices of the NewConnect market comprising amendments to the NCIndex methodology, discontinuation of NCX Life Science and introduction of NCIndex30. For the NewConnect market’s main index, NCIndex, the base value increased from 100 to 1,000 points and the historical performance of the index was converted accordingly. Furthermore, the Exchange started to publish NCIndex30 whose portfolio comprises 30 most liquid stocks on NewConnect. The Exchange decided to discontinue calculation of NCX Life Science. The index modifications and the publication of the new index were aimed at adjusting the indices to the specificity of the NewConnect market and were decided by the Exchange in response to suggestions from market participants.
2. In September 2013, the Exchange introduced a range of modifications to the main indices of Warsaw Stock Exchange following broad market consultations. On 23 September 2013, WSE started to publish new indices: WI30 and WIG30TR, with portfolios comprised of the 30 biggest and most liquid stocks listed on the WSE Main Market. WIG30 is a price index whose portfolio includes no more than 7 companies from a single sector while the share of a single company in index capitalisation is capped at 10%. WIG30TR is a total return index which includes both the prices of trade made and dividend income or income from subscription rights. WIG30 will be the underlying of new index futures and options to be introduced to trading in late 2014. The objective of the modifications is to better reflect the size and diversity of the market, to improve the liquidity of the stock market and to support the growth of the derivatives market. According to the timeline, WIG30 and WIG20 will be published in parallel until the end of December 2015.
3. In late 2013, the Exchange took measures to eliminate the penny stock issue on the WSE Main Market. The rules of classification of companies in the Alert List segment were modified. As of 2014, the segment will include all stocks with a market price below PLN 0.50 per share irrespective of price volatility. As of Q4 2014, the penny stock threshold will be PLN 1. Penny stock issuers are required to undertake corrective measures. Non-compliance with the requirement to eliminate the grounds for classification of stocks in the Alert List may result in suspension of trading or delisting on the exchange.

Market situation and investor activity

The WIG index gained 8.1% during the year while WIG30⁴ lost 1.8%. The WIG30TR⁵ index, which includes income from shares, gained 3%. The sector indices which gained the most in 2013 were WIG-BUDOWNICTWO (+33.5%), WIG-MEDIA (+31%) and WIG-INFORMATYKA (+21.9%). The indices that lost the most were WIG-SUROWCE (-32.1%), WIG-SPOŻYWCZY (-11.4%) and WIG-PALIWA (-10%). The NewConnect market index, NCIndex, gained 10.1%.

Unlike most of the other global exchanges, WSE reported an increase in turnover in shares. The average turnover per session on the Main Market was PLN 891 million, an increase of 18.35% year on year.

New rates of exchange fees

New rates of WSE fees for trading in shares, rights to shares, ETF units and futures contracts apply as of 1 January  2013. The change involves:

• reduction of the fixed fee for orders in shares, rights to shares and ETF units in session and block trades on both stock markets from PLN 1 to PLN 0.20 and reduction of the same fee for orders executed as part of the functions of a market member to PLN 0.05;
• change of the fixed fee for index futures from PLN 1.70 to PLN 1.60;
• introduction of reduced fees for day trading on the futures market in session trading (other than for transactions executed on the account of a market member and transactions executed on own account of an exchange member);
• introduction of reduced fees for transactions executed on own account of a brokerage house on the futures market.

In May 2013, WSE reduced operating fees for session trading in debt instruments on Catalyst from 0.010% to 0.007%. The fee reduction was open to Exchange Members who generated at least PLN 150 million of turnover on the market within a month excluding block trades and other transactions outside the session. The new fees applied both on the regulated market and in the Alternative Trading System on Catalyst from 1 May 2013 to 31 December 2013. The change of the exchange fees was designed to reward the most active Exchange Members present on the debt instruments market.

On 1 July 2013, WSE introduced a promotion for new Exchange Members on the derivatives market. Every Exchange Member starting activities on the derivatives market on own account from 1 July to 31 December 2013 could conclude transactions in up to 60 thousand index futures and transactions in up to 25 thousand index options free of charge. The promotion was open for a period of three months. The opportunity to trade in derivatives free of charge for three months was an incentive to companies considering to become dealers on the WSE derivatives market allowing them to effectively adapt to the market while improving market liquidity and quality.

In October 2013, WSE introduced reduced fees for investors active on the stock and derivatives market under the High Volume Provider (HVP) programme. The HVP promotion is open from 1 November 2013 to 31 October 2014 to legal entities investing only on own account on the financial market. To be eligible for the programme, an investor needs to generate a minimum value of PLN 5 million per session on the stock market or a minimum volume of 150 futures and options per session on the derivatives market. The HVP programme aims to attract a new group of investors, previously absent from WSE, which in the long term should reduce spreads and improve market liquidity.