1. WARSAW STOCK EXCHANGE (WSE) Pawel Pretkiewicz MA1N0224

2. Warsaw Stock Exchange - History  Polish capital market traditions go back to 1817, when the Warsaw Mercantile Exchange was established.  On april 12, 1991 after overthrow of Poland’s former comunist regime the Warsaw Stock Exchange Company was established  WSE held its first trading session on April 16, 1991 with five listed companies, all of which were formerly State-owned companies that had been privatized.  In 1999, Poland reformed its pension system, which contributed to an increase in domestic institutional investment, and in 2004 it joined the EU. These developments helped to boost trading volume in subsequent years.  Warsaw Stock Exchange is the largest national stock exchange in the CEE and one of the fastest-growing exchanges in Europe.

3. Warsaw Stock Exchange (WSE) Instruments such as shares, bonds and various derivative products can all be traded electronically on this exchange. WSE runs several markets: Main Market (trade in equities, equity-related and other cash instruments, derivatives), NewConnect (trade in equities and equity-related instruments of small and medium-sized enterprises), Catalyst (trade in corporate, municipal, co-operative, Treasury and mortgage bonds operated by the WSE and BondSpot), Treasury BondSpot Poland (wholesale trade in Treasury bonds operated by BondSpot). According to FESE data, WSE market capitalisation at the end of October 2013 was EUR 206 381 million

4. Main Stock Indexes WIG20 Index of 20 companies with the highest capitalization, listed based on top turnover ) mWIG40 Index of small and medium-sized companies WIG Warsaw Stock Exchange Index, which includes shares of companies whose total market value is 99% of the main market TechWIG Price index includes companies qualified for the Technologies Segment sWIG80 Index of the smallest listed companies NIF National Investment Funds Index Sector subindexes (ex. WIG-Banks, WIG-Media)

5. WSE key success factors Strong market institutions and regulations Pension funds in Poland invest up to 40% of their assets in equities of the companies listed on the regulated market Large individual investor base Privatisation of the biggest state-owned enterprises through an IPO Relatively large internal market Ability to compete with London and other exchanges for the biggest CEE companies Poland’s resilient economy

6. securities Rate_minRate_maxgrowthgrowth % Big29 000235 000206 000710% Bre188 0002 100 0001 912 0001017% Efekt57 000565 000508 000891% Elektrim100 0001 660 0001 560 0001560% Exbud48 500281 000232 500479% Irena39 5001 200 0001 160 5002938% Kable31 000435 000404 0001303% Krosno23 000515 000492 0002139% Mostostalexp151 0001 325 0001 174 000777% Okocim100 0001 395 0001 295 0001295% Próchnik36 000645 000609 0001692% Swarzędz36 000352 000316 000878% Tonsil19 000379 000360 0001895% Uniwersal7 800225 000217 2002785% Wedel188 0002 900 0002 712 0001443% Wólczanka34 000625 000591 0001738% Żywiec122 0002 100 0001 978 0001621% Table 1: Increases in share prices during the a bull market from 1993 to 1994

7. Privatisation through the Warsaw Stock Exchange (WSE) Ciech, KGHM, PKN Orlen, PKO BP, PZU, ….. Interesting examples where the Treasury managed to: increase management effectiveness through privatisation reduce the Treasury’s ownership below 50% ensure high free float retain control over the strategically important companies ensure high transparency As a result of the privatisation process: The WSE helped the Treasury privatise companies The Treasury helped the WSE increase its capitalisation and attract domestic and foreign investors

8. Treasury’s ownership of selected companies privatised through the WSE CompanyShareholderOwnership (% of capital) PKN OrlenAVIVA OFE5.08% Oil&gasING OFE5.17% Treasury27.52% Free-float62.23% KGHMTreasury31.79% MiningFree-float68.21% PKO BPBGK Bank (state-owned)10.25% BanksTreasury40.99% Free-float48.76% PZUEUREKO B.V.12.99% InsuranceTreasury45.19% Free-float41.82% CiechPZU OFE6.12% ChemicalsPioneer Pekao Investment Management SA19.64% Treasury36.68% Free-float37.56%

9. Privatisation of the largest banks in Poland Name of the bank before privatisation Year of privatisation Method of privatisation BRE Bank1992 IPO WBK1993 IPO Bank Śląski1994 IPO Bank Przemysłowo Handlowy1995 IPO Bank Gdański1995 IPO Bank Ochrony Środowiska1996 IPO, state-controlled Powszechny Bank Kredytowy1997 IPO Bank Zachodni1999 Sale to strategic buyer, IPO Powszechny Bank Gospodarczy1999 Merger with Bank Pekao Bank Depozytowo Kredytowy1999 Merger with Bank Pekao Pomorski Bank Kredytowy1999 Merger with Bank Pekao Bank Pekao1999 IPO Bank PKO BP2004 IPO, state-controlled Bank Gospodarki Żywnościowej2004 strategic buyer, planned IPO Bank Gospodarstwa Krajowego state owned Source: nbp.pl

10. Thank you !