WARSAW: Portfolio specialist Dustin Blodgett correctly projected last year that Warsaw’s stock exchange would be one of the best equity market bets in the world in 2017: he now says it should keep rising this year as well. Last year, among MSCI’s country indexes, Poland came top among all emerging markets, rising 52.25 percent in dollar terms, with the zloty’s firming accounting for 17 percent of that. In comparison, emerging markets excluding China gained 28.3 percent and the United States itself some 19.5 percent. Analysts and fund managers reckon the Warsaw bourse can repeat at least some of this in 2018. Valuations remain low, economic fundamentals are supportive, and Warsaw’s political battles with Brussels are mostly ignored by investors. So Poland is again in the top five in value of the 34 countries ranked by Blodgett’s company, California-based Accuvest Global Advisors. Poland has great momentum leading into this year and still has cheap valuations,” he said. “That could lead to another great year.” In its favor, Poland is the biggest of the European Union’s fast-growing eastern emerging economies. The local exchange’s turnover is also by far the highest in the region. The global stocks rally may lose momentum, but the Warsaw Stock Exchange is still expected to post strong gains, even though the zloty is unlikely to repeat last year’s surge against the dollar. After banks hit the bottom in their profitability in 2015-2016 due to a bank tax and interest rate cuts, they are now improving it,” said Kamil Stolarski, analyst at Pekao IB.The sector’s net interest income rose by 12.5 percent in annual terms in the January-November period. Net fee income was up 9.6 percent.Margin’s may rise if the central bank starts to raise its record low rates late this year or in 2019.
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