Trading encompasses trade in financial instruments on the Main Market and on GPW regulated markets NewConnect and Catalyst, and on Treasury BondSpot Poland.

Stock Market

The value of trade in shares on the electronic order book (EOB) on the GPW Main Market was PLN 204.3 billion in 2018, representing a decrease of 13.6% year on year (PLN 236.4 billion in 2017). The average daily value of trade on the was PLN 827.0 million, a decrease of 12.6% year on year (PLN 945.8 million in 2017). The number of transactions was 18.1 million in 2018, a decrease of 9.9% year on year (20.0 million in 2017). There were 247 trading sessions in 2018, three less than in 2017. FTSE Russell promoted Poland from Emerging Markets to Developed Markets in Q3 2018, which triggered record-high turnover in shares on 21 September at PLN 5.4 billion.

Value of trade in shares on the Main Market [PLN billion]

The value of trade on the electronic order book on NewConnect increased by 19.1% year on year to PLN 1,575 million in 2018 and the value of block trades decreased by 41.8% year on year to PLN 85.2 million in 2017. The number of transactions on the electronic order book was 755.4 thousand in 2017, a decrease of 11.2% year on year.

GPW organised the GPW Innovation Day, an investor event where listed companies meet with individual and institutional investors, on 17 April 2018.

The event gathered 31 institutional investors who held one-on-one meetings with 18 companies listed mainly on NewConnect.

The event brought together 200 individual investors. GPW is planning to hold the event again in 2019.

NewConnect is actively promoted among companies which could potentially be interested in listing on NewConnect. A dedicated Department of GPW regularly meets with individual companies and takes part in industry conferences to promote GPW’s alternative market.

Value of trade in shares on NewConnect [PLN million]

The capitalisation of domestic companies listed on the Main Market was PLN 579 billion at the end of 2018. The capitalisation of foreign companies listed on the Main Market was PLN 550 billion at the end of 2018.

Capitalisation of domestic and foreign companies on the Main Market [PLN billion]

Velocity reached its high of 42.6% in Q1 2017. The velocity ratio decreased in the later quarters of 2017. Velocity was 35.3% in 2017 compared to 35.2% in 2016. Velocity dropped to 31.1% in Q1 2018 and 30.7% in Q2, reaching 34.3% in Q3. Velocity dropped to 32.9% in Q4. The average velocity was 32.3% in 2018.

Turnover in shares on the Main Market [PLN billion] and velocity [%]

GPW takes far-reaching initiatives to improve liquidity on the Main Market, mainly including acquisition of new clients, improvement of infrastructure and availability, and generation of additional volumes among others through active promotional programmes offering reduced transaction fees.

The colocation service was opened to GPW’s clients in Q1 2016. The service is dedicated to algorithmic traders seeking the closest possible access to GPW markets for themselves and for their clients. GPW attracted one new client in 2018. The colocation service is a key part of the capital market infrastructure which supports the prop and algo trading segment and improves liquidity of the order book.

GPW attracted four new Exchange Members in 2018: JP Morgan A.G., Morgan Stanley Europe S.E., Goldman Sachs Bank Europe S.E, Michael Strom Dom Maklerski S.A.

The Super Market Maker programme was in effect in 2018. The programme supported liquidity of the cash market and the volume of trade in shares of the biggest companies participating in the WIG20 portfolio. The programme imposed much higher requirements for market makers’ orders on GPW (size, spread, share in turnover) but it also provided eligible participants with reimbursement of part of transaction fees and revenue sharing with the counterparty. Similar schemes which encourage market makers to offer better quotes are available for all classes of derivatives.

The HVP and HVF programmes were modified in 2018 and price promotions under the programmes were extended until 28 February 2019. HVP and HVF are special promotional programmes addressed to active investors on the stock and derivative market.

• High Volume Provider (HVP) programme is addressed to entities which invest on own account only. Launched by GPW in November 2013, it offers promotional fees to those investors who generate at least PLN 5 million of trade in equities per session on the stock market or 150 thousand futures and options on the derivatives market. HVP mini, an additional threshold of minimum trade volumes under the High Volume Provider programme, was introduced in June 2017. The new thresholds are PLN 2.5 million on the cash market and 75 futures contracts or options on the derivative market.
• High Volume Funds (HVF) Programme: the programme is addressed to investment funds which actively trade in shares or derivatives on GPW. It was launched in July 2015. Similar to HVP, it is a fee promotion for those funds which generate daily trade in shares exceeding PLN 5 million or 150 futures and options on the derivatives market. The condition of generating average turnover at PLN 5 million on the cash market was waived until the end of March 2017. The velocity ratio of a fund, calculated as the turnover generated within three months to the fund’s net asset value, should be at least 200 percent per three months.

All these initiatives were designed to improve liquidity. However, volatility remains a key parameter impacting investors. After a sharp drop in 2017, volatility increased in 2018.

Annual volatility of WIG and WIG20

Other Cash Market Instruments

The GPW cash market also lists structured products, investment certificates, warrants and ETFs.

Number of structured products, investment certificates, ETFs and warrants

In total, GPW listed 1,151 structured products that were investment certificates, 36 investment certificates and 3 ETFs at the end of 2018, and the total value of trade in those instruments was PLN 1.1 billion in 2018, a decrease of 10.6% year on year. Structured products had the biggest share in total trade (79.9%), followed by ETFs (13.6%).

Derivative Market

The Warsaw Stock Exchange operates the biggest derivative market in Central and Eastern Europe. WIG20 futures have for years been the most liquid instrument that generates the highest volume of trading on GPW, representing 54.5% of the volume of trade in all derivatives in 2018 (59.1% in 2017, 58.7% in 2016, 54.1% in 2015, 63.7% in 2014, 65.4% in 2013).

The volume of trade in single-stock futures accounted for 15.9% of the total volume of derivative trade in 2018 (21.7% in 2017). The share of currency futures in the volume was 25.0% in 2018 (14.1% in 2017).

In 2018, GPW introduced to trading single-stock futures on shares of high-tech companies: Livechat, Playway and Ten Square Games. The multiplier (number of shares per contract) was 100 for all futures. Single-stock futures allow investors to use leverage, generate potential better returns on the upside and downside of stocks, and hedge against the price risk of the underlying.

Structure of volume of trade in derivatives in 2018 by category of instrument

The total volume of trade in derivatives was 8.2 million instruments in 2018, an increase of 7.1% compared to 7.6 million instruments in 2017. The increase was mainly driven by a growing volume of trade in currency futures by 89.9% year on year to 2.0 million instruments and a decrease of the volume of trade in index futures by 1.2% year on year to 4.5 million contracts. The number of open interest was 143.6 thousand as at 31 December 2018, an increase of 2.5% year on year (140.1 thousand as at 31 December 2017).

Volume of trade in futures, EOB and block trades [million instruments]

The total volume of trade in options was 292.9 thousand instruments in 2018, a decrease year on year (304.5 thousand in 2017).

Volume of trade in options, EOB and block trades [thousand instruments]

The activity of investors on the derivative market is largely driven by the volume of trade on the underlying instrument market but it is even more sensitive to volatility than investor activity on the cash market. The volatility of WIG20 on the cash market was higher in 2018 than in previous years and reached 18.6% in 2018 compared to 14.8% in 2017. DLR (derivatives liquidity ratio equal to the nominal value of trade in index derivatives to the value of trade in the underlying) of WIG20 futures was 121 in 2018 compared to 112 in 2017 and 110 in 2016.

Similar to the cash market, GPW supports the liquidity of trade in derivatives by offering incentives to providers of liquidity for index futures, single-stock futures, bond futures and options.

Liquidity on GPW’s financial derivative market was additionally supported by the HVP and HVF programmes which continued in 2018. The share of programme participants in the volume of trade in derivatives on GPW in 2018 was 9.2% for index futures and 9.3% for single-stock futures.

Debt Market

The GPW Group offers trade in debt instruments on Catalyst, which is comprised of regulated and alternative trading systems operated on the trading platforms of GPW and BondSpot. The following instruments are traded on Catalyst:

• corporate bonds,
• municipal bonds,
• co-operative bank bonds,
• convertible bonds,
• covered bonds,
• Treasury bonds.

Structure of trade on Catalyst (EOB and block trades) in 2018 by instrument

The value of trade in non-Treasury instruments on the electronic order book on the markets operated within Catalyst was PLN 1,629 million in 2018 as compared to PLN 1,514 million in 2017 (an increase of 7.6% year on year) and the value of block trades was PLN 337 million in 2018 as compared to PLN 386 million in 2017. The total value of trade in non-Treasury and Treasury instruments on Catalyst was PLN 2,571 million in 2018 as compared to PLN 2,783 million in 2017, representing a decrease of 7.6% year on year.

Value of trade on Catalyst, EOB and block trades [PLN million]

Outstanding non-Treasury bonds to GDP [%]

Source: BIS (non-Treasury bonds as at the end of Q2 2018), IMF (estimated 2018 GDP)

In 2017, GPW offered a range of initiatives in Poland to introduce companies and local governments to financing options available on all GPW markets. Regional conferences presented ways to raise capital by issuing bonds. Initiatives addressed to local governments included training in bond issues for city treasurers and GPW’s participation in conferences dedicated to the debt market in Poland. GPW participated in the Local Government Capital and Finance Forum in Katowice. GPW and Dziennik Gazeta Prawna jointly organised the ranking Perły Samorządu to promote financing of local governments with financial instruments offered on markets operated by GPW.

Treasury BondSpot Poland

Treasury BondSpot Poland (TBSP) operated by BondSpot S.A. is an electronic Treasury bond market and an integral part of the Treasury Securities Dealer system operated by the Ministry of Finance with the support of the National Bank of Poland and the banking industry. The main objective of the Treasury Securities Dealer system is to minimise the cost of public debt by improving liquidity, transparency and effectiveness of the Treasury securities market. TBSP includes a market of cash transactions and a market of conditional transactions (repo).

Activity of TBSP market participants was bolstered by measures initiated in previous years and continued in 2018, which ensure optimum solutions for a liquid, safe and transparent market, a broad offer of products addressing the needs of market participants, and competitive costs of market participation.

Activity on TBSP in 2018 was driven mainly by market conditions impacting the local interest rate market, which affected the yields and prices on the local Treasury bond market. Those conditions included relatively low inflation readings and the plans of the Polish Monetary Policy Council (RPP) to keep the rates unchanged by the end of 2020, as well as a limited supply of bonds at auctions held by the Ministry of Finance, mainly due to a strong public budget and the achievement of the Ministry of Finance’s 2018 target sales of Treasury securities in 2017.

Activity of participants of the Treasury securities market, in particular repo transactions, was directly impacted by high liquidity in the local banking system and the impact of the Act on Tax on Certain Financial Institutions, which took effect in 2016. The tax affects the activity of banks on the secondary market of conditional transactions (sell/buy back and repo) by curbing the tenors while also directly impairing trading in repos at the end of each month with the intention of limiting the impact of opening transactions which add to taxable assets; this indirectly affects trading on the cash market.

As at 31 December 2018, TBSP had 28 market participants (banks, credit institutions, investment firms).

Participation in TBSP changed in 2018 as follows:

• five market participants discontinued their activity,
• Raiffeisen Bank Polska S.A. stopped operating as a market maker (in October) following a merger as a part of Raiffeisen Bank Polska S.A. was taken over by Bank BGŻ BNP Paribas S.A. as of 1 November 2018,
• UBS Ltd stopped operating as a market maker (in January),
• UniCredit Bank AG stopped operating as a market taker (in April),
• Otwarty Fundusz Emerytalny PZU „Złota Jesień” stopped operating as an institutional investor (in May)
• Natixis S.A. stopped operating as a market taker (in August),
• Merrill Lynch International changed its status from market taker to market maker (in September);
• Raiffeisen Bank International AG started operating as a market maker (in September).

Value of trade on Treasury BondSpot Poland [PLN billion]

Treasury BondSpot Poland held 247 trading sessions from 1 January to 31 December 2018. The total number of transactions was 9,502. The total value of trade was PLN 407,328.54 million, a decrease of 23.8% year on year. The average value of trade per session was PLN 1,649.10 million. The share of cash transactions and conditional transactions (BuySellBack/SellBuyBack and Repo Classic) in total trade on Treasury BondSpot Poland was 36.05% (PLN 146,839.05 million) and 63.95% (PLN 260,489.49 million), respectively, in 2018.

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Listing includes admission and introduction to exchange trading and listing of securities on the markets organised and operated by the GPW Group.

GPW listed 852 companies at the end of 2018 (465 companies on the Main Market and 387 on NewConnect), including 57 foreign issuers (890 listings including 57 foreign issuers at the end of 2017).

Number of domestic and foreign companies – Main Market

Number of domestic and foreign companies - NewConnect

The total capitalisation of domestic and foreign companies on GPW’s two equity markets was PLN 1,136 billion at the end of 2018 compared to PLN 1,389 billion at the end of 2017, a decrease of 18.3% year on year. The change of capitalisation was different in different sectors. The biggest year-on-year increase of capitalisation by sector was reported by commercial banks (PLN 191.1 billion), extraction and production operators (PLN 102.6 billion), insurers (PLN 37.9 billion) and energy companies (PLN 32.6 billion).

Change of capitalisation of domestic companies in 2018 – 20 sectors with the biggest change of capitalisation year on year by value [PLN billion]

Capitalisation of domestic and foreign companies – Main Market and NewConnect [PLN billion]

There were 22 IPOs on GPW’s two stock markets in 2018 (including 2 companies which transferred from NewConnect to the Main Market) compared to 34 IPOs in 2017. The total value of IPOs on the two stock markets was PLN 0.346 billion in 2018 (PLN 7.7 billion in 2017) and the value of SPOs was PLN 5.356 billion in 2018 (PLN 90.8 billion in 2017). The strong increase in the value of SPOs in 2017 was driven by the SPO of UniCredit S.p.A worth PLN 55.9 billion in Q1 2017.

Value of IPOs and SPOs – Main Market and NewConnect [PLN billion]^1 2

The nominal value of non-Treasury debt listed on Catalyst was PLN 86.6 billion at the end of 2018, a decrease of 9.6% year on year (PLN 95.9 billion at the end of 2017). Catalyst listed 527 series of non-Treasury debt instruments at the end of 2018. Issuers whose instruments were listed at the end of 2018 included 20 local governments, 107 enterprises and 16 co-operative banks. Including the State Treasury, the number of issuers on Catalyst was 148 at the end of 2018 compared to 161 at the end of 2017. The total nominal value of non-Treasury debt instruments listed on Catalyst was PLN 86.6 billion at the end of 2017, as compared to PLN 95.8 billion at the end of 2017.

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GPW collects, processes and sells market data from all of the financial markets operated by the GPW Group. The status of GPW as the original source of information on trading and its strong brand and diversified business activity within the GPW Group enable the Company to successfully reach various groups of market participants with advanced information adjusted to individual needs.

Revenue from information services of the parent entity consists of revenue earned on the sale of stock exchange information: real-time stock exchange data and statistical and historical data in the form of a statistical e-mail daily bulletin, electronic publications, calculation of indices, index licenses and other calculations. In addition to data from GPW, TGE, Treasury BondSpot and GPW Benchmark, the Company distributed reports of issuers listed on NewConnect and Catalyst to data vendors in 2018.

The sale of stock exchange information is based on separate agreements signed with exchange data vendors, exchange members and other organisations, mainly financial institutions. The Group’s revenue from information services also includes the revenue from BondSpot and GPW Benchmark information services.

The key groups of clients who use the GPW Group’s information services:

Data Vendors

Specialised data vendors deliver data made available by the Company to investors and other market participants. Amongst the vendors there are information agencies, investment firms, internet portals, IT companies and other entities.

At the end of 2018, GPW had data vendors in Austria, Belgium, the Czech Republic, Denmark, Estonia, France, Germany, Ireland, the Netherlands, Norway, Switzerland, the United Kingdom, the USA,.

As at 31 December 2018, the GPW Group’s information services clients were 78 data vendors, including 36 domestic and 42 foreign ones, with subscribers using professional and basic data feeds.

GPW Group data vendors

GPW Group data vendors by country [%]

GPW modified its 2018 price list as required by MiFID 2, including disaggregation of data feeds by class of assets. As a result, data vendors no longer need to pay for the full data feed; instead, they only pay for data from selected markets, reducing the total cost.

The GPW Group added new products to its offer in 2018: in addition to licences for real-time data distribution, the Company sold licences for delayed data distribution. Delayed data are also available on the public websites of certain real-time data vendors and on the GPW website.

Individual and Professional Subscribers

The GPW Group reported an increase of the number of real-time data subscribers, including both users of basic and professional data feeds.

The number of subscribers of GPW Benchmark, TGE and Bondspot data continued to increase, as presented in the figure above in aggregate with GPW data.

Non-display Users of GPW Group Data

Following intensive acquisition initiatives, GPW attracted 7 new clients for non-display data in 2018 (used in algorithmic trading, risk management, portfolio valuation, systematic internalisers, and other non-display applications).

A new price list was published in 2018, including fees for non-display use of WIBOR data.

The sale of non-display licences was, next to the sale of WIBOR data, the key driver of growth of this business line in 2018.

Non-display users of GPW Group data

Non-display users of GPW Group data by country [%]

Processed Data and Indicators

In addition to real-time and delayed data, GPW offers a broad range of advanced value-added information products used by financial institutions in analytics. Diverse data and indicators are available in packages addressed to specific segments of the financial market in user-friendly formats.

The main users of processed data and indicators in 2018 included investment funds, banks, news agencies, pension funds, brokers and insurers.

Users of processed data and indicators [%]

Users of processed data and indicators by country

GPW launched a new value-added service in 2018: Key Information Document (KID), which gives investors easy access to the documentation of structured products, certificates and derivatives. We acquired 13 clients of this service.

Issuers of Financial Products – Users of GPW Indices as the Underlying

Index names are registered trademarks. Financial instruments whose name includes an index name require the issuer to sign a licence agreement with GPW.

Two new licence agreements for the use of GPW indices were signed in 2018. The agreement with AgioFunds TFI for the use of WIG20TR was a great milestone. It is Poland’s first ETF (Beta ETF WIG20TR), listed on the Warsaw Stock Exchange since 7 January 2019.

The other licence agreement was signed with Expat for the use of WIG20 in an ETF (Expat Poland WIG20 UCITS ETF).

Issuers of instruments based on GPW indices [#]

Number of data vendors and subscribers, as at 31 December

The Company’s information services also include:

• licences on GPW data for use in the calculation and publication of clients’ proprietary indices and financial instruments,
• calculation of indices for clients,
• licences for television stations using real-time data feeds for limited presentation in public financial programming,
• licences for clearing houses to use GPW Group data.

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