Investing in Polish stocks is still safe, despite economic slowdown

Despite the slowdown in the domestic GDP growth, investing in stocks on the WSE may still be a good idea. This is due to the “approaching inflow of capital to the stock exchange within the framework of PPK, Krzysztof Cesarz,” says investment director of Esaliens TFI. He added that when selecting companies for the portfolio, investors should take into account changing trends and consumer behavior.

“Investors’ willingness to invest in the WSE is at a low level, which means that aversion to risk is very high. On the other hand, we can observe a large number of calls to sell shares of companies, which may suggest that now is a good time to invest in this market. Strategic investors have already noticed this,” said Krzysztof Cesarz.

Aversion to high risk

He believes that despite the expected slower economic growth in Poland, the current situation on the Warsaw Stock Exchange may be a good time to look for well-priced companies.

“Soon, funds under the Employee Capital Plans program will start to flow to the market. Regardless of the participants’ attendance, the scale of the program will increase year after  year and at some point, the program will have a real impact on what is happening on the Warsaw Stock Exchange.” – he said.

Outflows of funds

Cesarz recalled that the outflow of funds from the national stock exchange in recent years are the result of a systematic reduction in the assets accumulated in Open Pension Funds. In addition, the lack of a final solution to the issue of Open Pension Funds, as well as a decline in customers’ confidence in the asset management industry.

“Investor sentiment is very weak, which means that negative factors are already included in prices. The first positive information may translate into its improvement, which should be immediately reflected in share prices”.

“Investors must once again believe that the stock market can and should be systematically saved. The lack of investment in our stock market may be a matter of lack of proper education. This is especially true when there are so many different investment alternatives to savings,” he added.

Have a broader look at the markets

According to Cesarz, in searching for investment opportunities and building a long-term portfolio, it is also important to have a broader look at the markets. Observing the phenomena and tendencies that occur in the world allows us to notice potential opportunities and to avoid making mistakes.

“This allows us to see global trends and changes in the behavior of businesses and consumers that can be translated into the domestic market,” he said.

Another potentially useful investing tool is the new Hemp.IM app and its companion investment news website. Hemp.IM provides the latest news about the CBD and Hemp sector, which is predicted to be worth more than $14.67 billion by 2026. This important market is only just emerging in Poland and the rest of Europe but could represent a unique investment opportunity.

__

(Featured image by Kamil Gliwiński via Unsplash)

First published inInvesting, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.