FTSE Russel: Poland is a Developed Market

Last Monday, Poland hit the headlines of the most renowned business periodicals, from Financial Times to Forbes. The reason is the decision of FTSE Russel, a leading index provider at the London Stock Exchange, to change the country’s market status, which came into effect. Poland was reclassified from Emerging Markets to Developed Markets. It has officially joined the big boys club. Poland’s biggest listed enterprises and the Warsaw Stock Exchange have a good reason to celebrate.

This is the first time in almost ten years that a market has been upgraded to the DM category by FTSE Russell. Poland is also the first country from Central and Eastern Europe that enter the list. Now, the status of a developed market is shared by 25 states, including Great Britain, USA, Germany, France, Japan and Canada. The upgrade is likely to result in capital inflows and greater interest in Poland on the part of international investors.

FTSE Russel experts explain that “reclassification as a Developed market is the fruit of continuous improvements in Poland’s capital markets infrastructure, supported by the country’s steady economic progress”. The country is the biggest economy in the CEE region and within the ten biggest in the EU. GDP growth last year exceeded 4 percent, driven by strong consumption. Poland’s securities, now in the Developed All Cap index, will weigh 0.165%, and become a classic “small fish in a big pond”, a fact which is highlighted by many commentators.

FTSE reviews its Country Classification every twelve months. A market may be classified as Developed, Advanced Emerging, Secondary Emerging or Frontier. Poland is currently the 23^rd capital market in the world. Marek Dietl, the President of the Warsaw Stock Exchange, expressed hope that the country may be in the top 20 in just a few years’ time.