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The Warsaw Stock Exchange has cancelled option warrants and structured certificates issuing fees in the period from 1 January to 30 June 2008.
“It is our goal to build a strong segment of structured products. The fee reduction should encourage issuers to introduce their products to the WSE,” said Adam Maciejewski, WSE Management Board Member, about the WSE decision.
The fee reduction is one of many measures taken by the WSE to build a strong segment of structured products on the Warsaw market. It will be followed by a wide-ranging promotion and education campaign.
Adam Maciejewski added: “We are very keen on expanding the investment opportunities for exchange investors. Structured products serve this purpose very well as they offer gains on changes of prices of shares of Polish and foreign companies as well as changes of prices of natural resources, agricultural produce, etc., including both price rises and declines. In addition, investors may hedge the risk by using products with a guarantee of invested capital, or satisfy a bigger risk appetite by using products with a financial leverage.”
Structured products are financial instruments whose price depends on a specific market parameter (e.g., price of shares or baskets of shares, stock exchange indices, commodity prices, fx rates). Investment in a single type of security enables easy participation in changes of foreign indices, baskets of shares, and prices of commodities such as gold and oil or agricultural produce.
Structured products are increasingly popular with investors in Poland. The value of trading was over PLN 25 million in 2007, up by a factor of 25 year on year (only 2 series of structured bonds were listed in 2006). The highest value of trading in 2007 was recorded in November, at PLN 9 million, more than triple the October figure.
The investors are mainly interested in structured certificates issued by Raiffeisen Centrobank (RCB), in particular Brent Crude and Gold commodity certificates, index certificates for the RDX Russian companies index, and basket certificates for a basket of Ukraine and Kazakhstan companies.
Several issues of structured products are currently in preparation, and many more are expected in 2008. Two issuers of structured products: Erste Bank and Raiffeisen Centrobank (RCB) joined the WSE in 2007. The WSE currently lists products of three issuers: Deutsche Bank London (structured bonds), Erste Bank and RCB (structured certificates), in a total of 12 series, including products based on foreign indices, baskets of shares, and resources (oil, gold).
