polish Stock Exchange and plan for the coming weeks

hello,

I decided that today I will share with you some important information about directly Polish Stock Exchange. Within the framework nationalization of the Open Pension Funds (OFE), known in Poland as a second pillar of collecting money for yourself retirement which I wrote on my blog a few times. As a reminder: <link 1> and <link 2>.

Recently, we have been given more  interesting information that the Open Pension Funds (OFE) will have to convey to the Social Insurance Institution (ZUS) 51.5 percent of assets from their portfolios of 3rd September 2013.

Below, I present the structure of the assets of Open Pension Funds as at 3rd September 2013.

table 1. structure of assets of Open Pension Funds

All values ​​in the tables are expressed with the polish zloty and in percentage. Current rates: USD/PLN 3.04 and EUR/PLN 4.18 Unfortunately, for funds Amplico OFE and AXA OFE data were not available. Fortunately, these funds are not big enough and relevant so skipping them will not significantly affect the results presented below.

To summarize table number 1:

The total amount of assets of all funds is 162,133,123,067.00 PLN

                     51.5 percent of this value is 83,498,558,379.51 PLN

83,498,558,379.51 PLN so much money, Open Pension Funds will have to transfer to the account of the Social Insurance Institution on 3 February 2014

From the beginning of December of current year on the Polish stock exchange began its a correction. In the table number 2 below I present the structure of fund assets as of November 29 just before the start of that correction.

table 2.  structure of assets of Open Pension Funds

Easy to see that all the funds in the period from September 3 to November 29 increased the share of equities in their portfolios. Including the shares were purchased for close to 10 billion polish zloty. Over the first 12 days of December Polish WIG20 Index fell 7.85 percent already. During this time, Open Pension Funds sold shares.

Why ?

83,498,558,379.51 PLN so much money, Open Pension Funds will have to transfer to the account of the Social Insurance Institution on 3 February 2014

table 3.  structure of assets of Open Pension Funds

Table No. 3 showed total assets at December 11. You can easily calculate that the funds have sold shares of Polish Companies for over 3.6 billion polish zloty. As of December 11, total assets in bonds amounted to 69 billion zloty, this means that the funds need even sale stock for about 14.5 billion zloty.

Between December 11 and February 3 is 54 days out of which only 35 business days. Average sales per day is 413 million zloty. In addition, it is worth noting that we have a period approaching Christmas and New Year's Eve with the result that the market liquidity will be limited. Average turnover value on the market in Poland in the last five days was: 953 million zloty. Half of which is the sale by the Open Pension Funds.

My recommendation:

if you are planning to invest in stocks this year is certainly avoid the Polish stock exchange !!!

I hope that as a clear and accessible manner  I explained Current situation and I hope that everything is quite understandable. If while reading my post you have any questions. Please feel free to write, surely answer all questions.

best regards,

oscarjp

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.