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Investing in Polish stocks and bonds

deeIrish 7 | 33  
21 Aug 2007 /  #1
Well as I'm planning to move to Poland soon to stay for about 6 months, I'm thinking about finances.

I expect to have a little income from home to tide me over, but I'll also bring a few thousand euro with me.

After I've paid my rent and deposits, I'll have some left over and I'd like for it to be put to work as well as possible. What kind of interest can you get from the bank these days?

Also, what is the Polish bond market like? Is the return above or below 5%. I'm getting 5% risk-free in Ireland right now so maybe it makes more sense just to hold on for now, if I can't do better than that risk-free in Poland
gloios 12 | 76  
21 Aug 2007 /  #2
I would be extremely interesting in anyones information about this as well.
hello 22 | 891  
21 Aug 2007 /  #3
Investing in stocks is risky business. If you only plan to be in Poland for 6 months, it may not be the best idea to invest your money (especially now when there's a chance the market will go down not only in Poland but overall in the world). I would try bonds instead (risk-free, but I'm not sure if you could buy 6-month bonds) or simple putting your money in the bank to get 3-5%.
westvillage 1 | 6  
21 Aug 2007 /  #4
I had a long chat about this with an American bank executive who is based in Warsaw. I expressed an eagerness to invest in the Polish stock market and he somewhat dampened my enthusiasm, not because of the economy but rather because the way business is done. Most Western stock markets have very strict codes of conduct and protocols that simply aren't in place in Poland yet. Some of the conduct that takes place would be prohibited and/or illegal in the US market system for example. So, you really need to know what you're getting into. Rather than invest directly into the Polish market, I invested in Poland through a mutual fund traded in the US (CEE - Central European Equity Fund) and a company (CEDC - Central European Distribution Company). CEE has been brilliant (up 142% since I bought in) and CEDC has been great (up 56%). I believe that's the smarter way to go rather than diving into a market that's finding its way.
OP deeIrish 7 | 33  
21 Aug 2007 /  #5
huh, but has much of that been due to the currency moves, I wonder?
westvillage 1 | 6  
21 Aug 2007 /  #6
Maybe a little, but not significantly. I bought CEE four years ago, before the dollar went in the crapper. CEDC is a newer acquisition, Jan '06. They distribute vodka. Can't go wrong there.

I'd say look into the market in your home country (Ireland, I assume) and see if you can find Polish companies or companies affiliated with Poland trading in your market. Or find out what companies are doing business in Poland (not necessarily Polish ones) because certain sectors will be benefiting from the influx of EU money (companies affiliated with infrastructure building for example - cement, asphalt, power). I compare today's Poland with the Ireland of a decade ago. They have a lot of similarities, which is one of the reasons I started looking into Polish stocks in the first place after seeing first-hand how Ireland prospered when their EU membership kicked in.
OP deeIrish 7 | 33  
27 Aug 2007 /  #7
I don't want to spoil your enthusiasm, but Ireland's unemployment quadrupled during its first 22 years in the EU.

We joined in 1973, the economy started to seriously improve in about 1995.
jkchambers 3 | 33  
27 Aug 2007 /  #8
Hi Dee, the Irish economy improved greatly around 1995. During the many years prior to that the economy would have been much worse had we not been in the EU and we may not have been in the position to make the huge gains since 1995. From the day we joined we got much more from the EU in grants than we paid in and without that net inflow we would have been rightly up the creek. Poland will now benefit from billions in various EU grants and structural funds. This will help keep employment in agriculture and keep everyone in the construction industry very busy for many years.

Related: Polish bonds a good deal?

PAP reported senior economist at the Postal Bank Piotr £ysienia as saying Polish bonds, in view of what is happening across Europe, are an alternative for many investors seeking safe and profitable investment opportunities. At present the interest on 10-year bonds is 4.8%. Analysts believe the interest rate may increase in the near future but only very slightly.

If you live in the States it is unlikely you will be able to purchase and cash in these bonds directly on your own. If you really want to invest in Poland from abroad you should look at finding mutual funds or exchange trade funds which have the access to such financial instruments.

A Polish Bond Fund. Seems pricey though.

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