Poland will raise 1.2 billion zloty ($420 million) from the Warsaw Stock Exchange’s initial public offering, in which Treasury Minister Aleksander Grad said demand was “outstanding.”
Retail investors will pay the maximum price of 43 zloty a share, Grad said today. The price for institutional investors was set at the top of a range of 36 zloty to 46 zloty, TVN CNBC said, citing a report by Reuters.
The government offered 64 percent, or 26.8 million shares, of the country’s sole stock exchange as part of a plan to raise 25 billion zloty to help finance the budget gap. Institutions will get 70 percent of the IPO and the final price for them will be announced by tomorrow, according to the IPO prospectus.
The price of 46 zloty per share is “close to the company’s fair value and probably doesn’t offer much upside potential,” Piotr Palenik, a Warsaw-based analyst at ING Groep NV, said by phone. The bourse’s valuation “is somewhere between cheaper western exchanges and hot stock markets of Asia or Latin America,” he said.
The Warsaw exchange is valued at around 19 times its 2010 net income, based on the IPO price for institutional investors, according to Palenik. The median ratio of 19 world exchanges is 16.9 times estimated earnings, he said. The London Stock Exchange Group Plc trades at 11 times this year’s profit, while Brazil’s BM&FBovespa SA, the operator of Latin America’s largest exchange, is valued at 21 times earnings, according to data compiled by Bloomberg.
Emerging Europe’s First
As many as 323,000 individual investors signed up by yesterday’s deadline to buy shares in the Warsaw exchange, the first emerging European bourse operator to go public, Grad said. Bookbuilding for institutional investors ended at 1 p.m. Warsaw time today.
“Poland is seen as a very credible partner and we can announce even the biggest transaction and investors will come running,” Grad said during a speech at Warsaw University.
The Polish exchange has a market capitalization of $187 billion, making it the third-largest in emerging Europe after markets in Russia and Turkey. It has expanded faster than any other exchange in the region, more than doubling the number of traded companies and almost tripling daily turnover in the past decade, according to its website.
Most IPOs
Poland, which this year sold stakes in its largest power, copper, insurance and phone companies, has had the highest number of IPOs annually in central Europe since at least 2004, according to data compiled by Bloomberg. Fifty-nine IPOs have raised $4.37 billion in 2010, the largest coming from state- owned insurer PZU SA and energy utility Tauron Polska Energia SA, the data show.
More than 250,000 individual investors subscribed for shares in PZU’s IPO while the sale of Tauron attracted orders from 231,000 Poles, according to the Treasury Ministry’s data.
PZU shares have jumped 22 percent from their April sale price and Tauron has climbed 29 percent since the government sold a stake in June. The benchmark WIG20 Index fell 0.1 percent at the 4:30 p.m. close in Warsaw, trimming this year’s gain to 10 percent.
Poland next year plans to sell to the public shares in Bank Gospodarki Zywnosciowej SA, coking coal producer Jastrzebska Spolka Weglowa SA and a real-estate holding company, Grad said.
Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and UBS AG are the global coordinators of the exchange’s offering. Ipopema Securities SA, KBC Groep NV, Societe Generale SA, PKO Bank Polski SA, Bank Ochrony Srodowiska SA, Alior Bank SA, Banco Espirito Santo SA, IDM SA and Wood & Co. helped manage the bourse’s sale.
