PAP Biznes debate: 2025 promises to be good for Polish assets; market looks attractive
There are chances that 2025 will be a good year for Polish assets and the market may stand out positively. It will be favoured by a good geopolitical situation, as well as the macroeconomic situation thanks to KPO funds and growing consumption, participants of the 36th PAP Biznes debate on Poland's mutual funds market assessed.
The 36th edition of debate on mutual funds' market strategies organised by PAP Biznes was attended by representatives of TFI PZU, Eques Investment TFI and Goldman Sachs TFI.
"It seems to me that we have a chance for next year to be another good year for actually all the major asset classes, be it equities or bonds. There is a chance that 2025 will be a pretty decent year for investors. The Polish market has a chance to stand out, if only because of valuations; and the macro situation in Poland is quite decent," the head of the equity market office at TFI PZU Tomasz Matras said.
"As far as the Polish market is concerned, we would rather expect higher rates of return in the segment of small and medium-sized companies - there is indeed a lot to choose from and there are some really interesting growth companies," he added.
The head of Eques Investment TFI Tomasz Korab agreed 2025 promises to be good for Poland in terms of investment.
"There is a chance that 2025 will again be a good year for investment - just like 2024 - and the chances of that are very high," Korab said.
According to Matras, the Polish market looks attractive.
"Next year is likely to be a good year for the Polish market. What is bad is already in the prices. There really isn't much to be negatively surprised about anymore," TFI PZU's representative assessed.
"Looking at the economic, fundamental situation, whether of companies or of the economy as a whole, it seems to us that Poland really looks attractive. It is cheap and really not much capital is needed to lift our stock market a bit," he added.
Experts pointed out that the Polish stock market has been doing quite well this year but has negatively diverged from developed markets or some emerging markets.
"In my opinion, this is largely dictated by geopolitics, which was perfectly evident when we found out the winner of the US presidential election. We need to be aware that for many foreign investors, Poland, or the CEE region in general, is not a key market for investment," Matras pointed out.
"When some risk appears, it is easier for such investors simply not to be here and to wait. In my opinion, it was a bit of a panic effect, I think it was exaggerated," he added.
According to experts, the current large discount of the Polish stock market is an effect of geopolitics, and the end of the war in Ukraine would have a positive impact on market sentiment in Poland in 2025.
"At the moment, the distribution of risks and opportunities for Poland is extremely favourable. Imagine if any truce were to be concluded [in Ukraine - PAP ed.], (...)then in my opinion this would be very good news for the Polish market," Korab said.
"Looking at Trump's announcements that he would like to end this conflict quite quickly, it seems that the sphere related to the geopolitical environment should improve significantly. In such already extremely optimistic scenarios, which we can, let's say, draw for ourselves, then an increase in the WIG to 105-110k should not be a big problem," added the head of the analysis team and fund manager at Goldman Sachs TFI Bartlomiej Chylek.
According to Matras, the geopolitical situation next year should be more positive, which could support the Polish equity market.
"Foreign investors point out that any truce in Ukraine means a green light for foreign capital: it will return not only to Poland, but also to the entire CEE region," Matras said.
The head of Eques Investment TFI Tomasz Korab pointed to the large discount of the Polish market.
"Foreign markets not only were high, they rose. We haven't risen as fast, so the effect is that the discount to Poland is a few tens of percent, depending on what you look at - whether you look at historical averages or compare yourself to other emerging markets," he said.
"Emerging markets are at a 40 percent discount to developed markets, and Poland is at a 40 percent discount to those emerging markets," Korab added.
According to him, the Polish economy may surprise positively in 2025, the macro situation should improve due to EU funds under the national recovery plan KPO or due to growing consumption.
"In 2024, this big surprise was a very weak consumer. Until now it has always been the case that salaries grew, incomes grew, so consumption grew as well, and this year it did not work," Korab pointed out.
"With this rate of income growth, consumption cannot be that much of a ball and chain. In 2025, KPO will come in - about 0.6 percent of GDP has already gone to companies and to the economy this year, and for next year it will be about 1.8 percent of GDP," he added.
According to Matras, it is the KPO funds that represent a big opportunity for the Polish economy and the Polish stock market.
"The Polish economy is doing quite well. However, it seems to me that for foreign investors it is more important what is happening in the real economy, they are largely guided by the condition of a given economy," he said.
"In this context, it seems to me that KPO and the related investments are more likely to have a positive impact on Poland's economic situation, on the growth dynamics," Matras assessed.
According to the head of the analysis team and fund manager at Goldman Sachs TFI Bartlomiej Chylek, EPS for WSE-listed companies should improve by 8-10 percent.
"It seems, however, that from the point of view of a Polish investor, the most attractive asset class for next year will be the equity market," he assessed.
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