Trading encompasses all the instruments admitted to trading on the Main Market and on WSE regulated markets and on the markets operated by BondSpot S.A.

Trading offered by the Group concerns the following instruments:

• shares and equity-related financial instruments listed on the Main Market and on NewConnect;
• derivatives listed on the Main Market, including mainly WIG20 index futures, mWIG40 index futures, single-stock futures, index options, currency futures, interest rate futures, and WIG20 index units;
• debt securities listed and traded in the Catalyst system and on the Treasury BondSpot Poland market;
• other cash market instruments, including structured products, ETFs, investment certificates and warrants.

STOCK MARKET

In 2013, the turnover on the stock markets operated by Warsaw Stock Exchange grew at a rate much superior to the European average. The value of trading on the stock markets operated by WSE increased by 16.5% year on year in 2013 while the average growth rate on the other European exchanges was 4,4%. WSE’s share in the value of trading on CEE exchanges continued to increase for another consecutive year. Turnover in shares on WSE represented 58.5% of the Region’s turnover in 2013 compared to 54.3% in 2012 and 52,7% in 2011.

In 2013, the value of session and block trades in shares on the WSE Main Market amounted to PLN 256.1 billion and was 26.2% higher than the turnover value in 2012. The average daily value of session and block trades amounted to PLN 1,037 million and increased by 27.2% in comparison to 2012. The number of session transactions in 2013 amounted to 12.8 million, an increase of 10.9% compared to 2012. The velocity ratio of trading in shares on WSE increased by 1.3 percentage points year on year and stood at 38.4% in 2013.

Turnover on WSE Main Market

In 2013, turnover on NewConnect amounted to PLN 1,226 million and was 6.0% lower than the turnover recorded in 2012. The number of session transactions in 2013 amounted to 720.8 thousand and was 6.8% lower than the number of transactions in 2012. According to WSE research, domestic institutions generated 24% of turnover on NewConnect in 2013 as compared to 17% in 2012. The share of individual investors in trading on NewConnect decreased from 73% in 2012 to 69% in 2013 while the share of foreign investors in trading decreased from 10% to 7%.

Turnover on NewConnect

DERIVATIVES MARKET

Warsaw Stock Exchange operates the biggest derivatives market in the CEE Region. The aggregate volume of derivatives trading in 2013 amounted to PLN 12.6 million instruments and was 11.3% higher than the trading volume in 2012. As at 31 December 2013, the number of open interest amounted to 193.5 thousand and was 30.8% higher than that recorded as at 31 December 2012.

Derivatives trading volume in thousands

The most important product in the derivatives segment are WIG20 futures responsible for 65.4% of the derivatives trading volume in 2013. In 2013, the WIG20 futures trading volume amounted to 8,258 thousand contracts and was 9.0% lower than that generated in 2012.

The number of open interest was 193.5 thousand as at 31 December 2013 compared to 147.9 thousand as at 31 December 2012, an increase of 30.8%.

In 2013, WSE added WIBOR reference rates futures and Treasury bond futures to its offer. As at the end of 2013, WSE offered 19 classes of futures on stocks listed on the Main Market. In September 2013, WSE introduced to exchange trading WIG20 futures with a PLN 20 multiplier which will replace the existing futures with a PLN 10 multiplier as of September 2014.

In 2013, the WSE stock index futures market ranked fifth in Europe in terms of the trading volume.

Volume of stock index futures trading in Europe (in thousands)

DEBT INSTRUMENTS TRADING SYSTEM – CATALYST

Catalyst is operated on the trading platforms of WSE and BondSpot, a subsidiary of WSE. It consists of regulated markets and alternative trading systems. Catalyst is designated for debt instruments – municipal, corporate and mortgage bonds, and its architecture makes it compatible with issues of various sizes and different characteristics as well as suitable to meet the needs of various investors – wholesale and retail, institutional and individual investors. Within Catalyst, on the WSE Main Market, retail Treasury bonds are also listed.

The value of session transactions in non-Treasury instruments on Catalyst was PLN 2,206 million in 2013 as compared to PLN 1,127 million in 2012 (increase of 95.8%), and the value of block trades was PLN 1,560 million in 2013 as compared to PLN 1,347 million in 2012. The value of session transactions in non-Treasury and Treasury instruments on Catalyst was PLN 2,757 million in 2013 as compared to PLN 1,666 million in 2012, and the value of block trades was PLN 1,573 million in 2013 as compared to PLN 1,356 million in 2012.

In the Company’s view, Catalyst has a high growth potential, which is reflected in a relatively low level of bond debt issued in Poland in relation to GDP. The aggregate indebtedness of Polish companies and financial institutions under debt instruments (with maturities over 1 year) issued on the local and international markets represented 7.6% of the nominal GDP as at 30 September 2013. The regulatory environment mainly regarding the pension system reform and direct participation of banks in the market, lower risk appetite in the banking sector, development of a transparent secondary market and continuing education of investors and issuers create favourable conditions for stronger growth of the bond market in Poland.

TREASURY BONDSPOT POLAND

TBSP offers trade in Treasury securities (Treasury bonds and bills). As a rule, all non-retail Treasury bonds denominated in PLN and Treasury bills are introduced into trading. Since 21 January 2013, TBSP also offers trade in euro denominated Treasury bonds. As part of the TBSP offer development in 2013, a fee model was introduced resulting in reduced prices on transactions on the cash market concluded by market makers, the rules of participation were modified for participants holding the status of institutional investor, and implementation of new MidPrice and Striker Price functionalities was prepared.

In 2013, the total value of trading on Treasury BondSpot Poland was PLN 845.0 billion. The trading volume decreased by 20.4% compared to 2012 among others as a result of the outflow of global capital in view of the anticipated reduction of quantitative easing by the biggest central banks. Another key factor were bond prices on the main markets. The value of trading on the bond market was influenced by modifications to the pension system. The announced plans of changes to the operating framework of open-ended pension funds limited the transactional activity of this group of institutional investors, which also had an impact on the turnover in the interbank segment. Furthermore, in the second half of the year, the Ministry of Finance largely limited issues on the primary market, which also had an adverse impact on the value of trading on the secondary market. In 2013, Treasury bonds were the most traded instrument on TBSP (99.95% of turnover). Trading in Treasury bills was temporarily suspended on TBSP following the expiry of the last T-bill series in August 2013 and in the absence of T-bill auctions organised by the Ministry of Finance. The share of cash and conditional transactions (including BuySellBack/SellBuyBack and Repo Classic) on TBSP in the reporting period was 41.0% (PLN 346.7 billion) and 59.0% (PLN 498.2 billion) respectively.

As at 31 December 2013, TBSP had 33 market participants (banks, credit institutions, investment firms and one open-ended pension fund).

OTHER CASH MARKET INSTRUMENTS

Apart from shares and debt instruments, the WSE cash market lists also structured products, investment certificates, warrants and ETF certificates. New products introduced into trading in 2013 included Twin Win certificates, turbo certificates issued by ING Bank N.V. and reverse convertible notes on stocks of PKO BP and KGHM.

In total, WSE listed 550 structured products, 37 investment certificates, 3 ETFs and 72 warrants at 2013 year-end, as compared to 343 structured products, 58 investment certificates, 3 ETFs and 72 warrants at 2012 year-end.

Number of structured products, investment certificates, ETFs and warrants listed on WSE

The value of trading in structured products amounted to PLN 280.7 million in 2013 compared to PLN 164.5 million in 2012. The value of trading in investment certificates was PLN 53.3 million in 2013 compared to PLN 57.2 million in 2012.

Value of trading in structured products, investment certificates, ETFs and warrants (PLN million, session and block trades)