By Patryk Wasilewski
WARSAW--Poland's BRE Bank (BRE.WA) wants to tap into the
country's expected corporate bond issuance boom by starting the
first index that will monitor the papers' performances, BRE Bank
Chief Executive Cezary Stypulkowski said Thursday.
For years the Polish corporate bond market was dormant as
companies preferred to seek funding through bank loans or share
issues at the Warsaw stock exchange. However, as sources of cash
became less available and more expensive the Polish corporate bond
market has been growing rapidly.
The value of tradeable corporate bonds rose to 25 billion zlotys
($8.1 billion) in September from only PLN5 billion at the beginning
of 2011, BRE Bank said in a presentation. The bank said it expected
the trend to continue in coming years, partially due to changes to
the country's public pension system.
Those changes in a controversial government overhaul will see
nationalization of government bonds held by the country's
obligatory--but privately managed--pension funds and will forbid
future purchases of state papers. The move is expected to
significantly increase the funds' appetite for other fixed-income
instruments, mainly corporate bonds.
BRE isn't the only financial institution betting on rapid growth
of the Polish market. Earlier this year Moody's Investors Services
opened its office in Warsaw for the very same reason.
Write to Patryk Wasilewski at patryk.wasilewski@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires