WBJ #33-34 2012

Richard Branson’s Virgin Mobile is coming to Poland. How will it impact the market?

23

WWW.WBJ.PL

5

Tech Eye tells you where to purchase your own drivable, Gatlinggun wielding robot

VOLUME 18, NUMBER 33-34 • AUG 20 – SEP 2, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

LOKALE IMMOBILIA

Since 1994 . Poland’s only business weekly in English

Broken promises COURTESY OF JONES LANG LASALLE

REAL ESTATE

• WFC sold • Gal. Mokotów extension • Residential innovations

How was the Amber Gold fiasco allowed to get this far?

3

Plus, a special report on “parabanks” 12-13

2.1%

Morgan Stanley has slashed its forecast for Poland's economic growth next year.

The government may have to revise its figures as well.

10

In this issue

SHUTTERSTOCK

News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Law . . . . . . . . . . . . . . . . . . . . . . . . .10 Opinion & Analysis . . . . . . . . . . . .11 Special Report . . . . . . . . . . . . .12-13 Lokale Immobilia . . . . . . . . . . .15-18 The List . . . . . . . . . . . . . . . . . . . . . .19 Markets . . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Air defense target

De-constructed

President Komorowski says it is a top priority for Poland to build its own missile defense system 4, 11

Banks in Poland have been hit hard by the tough times in the construction sector 4

NEWS

www.wbj.pl

Gov’t to cut support for renewables According to a new draft law on renewable energy released by Poland’s Economy Ministry in August, the country is looking to cut support for renewable energy sources between 2013 and 2020 by around z∏.9.7 billion to z∏.54.5 billion, Reuters reported. The bill also involves scaling back support for generating renewable energy using biomass and onshore wind in favor of solar power and offshore wind. ●

is how many Poles are currently living permanently in the UK, a 13 percent increase on last year, according to the UK’s Office for National Statistics.

z∏.2.96 billion was the value of direct foreign investment in Poland in June 2012, according to the National Bank of Poland.

Some z∏.4.15 billion was invested in Q2, 24 percent less than in the same period last year.

4% is Poland’s current level of inflation, Poland’s statistics office revealed, well above the rate-setting Monetary Policy Council’s target.

190,000

Micha∏ Tusk, the son of Polish Prime Minister Donald Tusk, has courted controversy of late after it emerged that he had worked for the owner of the now bankrupt parabank Amber Gold, which is currently being investigated by Polish prosecutors.

At the beginning of August, the prime minister’s son admitted in a newspaper interview that he had cooperated with the Amber Gold-owned airline OLT Express, providing analysis and PR services for the firm.

It has since been made public that he acted in this capacity while still working in his previous job as a journalist for the Tri-city edition of daily Gazeta Wyborcza.

In March this year, the newspaper printed an interview with OLT Express director Jaros∏aw Frankowski and

according to weekly Wprost, Micha∏ Tusk was involved in the formulation of the questions in the interview which he then answered himself as the director’s PR advisor.

After leaving Gazeta Wyborcza in April, he also started working for Gdaƒsk Lech Wa∏´sa Airport as an economic analyst and marketing specialist. His simultaneous employment at the airline and the airport has subsequently led to accusations of a conflict of interest.

Amber Gold’s owner Marcin P. (according to Polish law, since he has been charged by the prosecutor, his full name cannot be given) has stated that the prime minister’s son revealed some of Gdaƒsk Airport’s commercial secrets to OLT Express, an accusation that Micha∏ Tusk denies.

The PM’s son revealed that he had talked with his father in June about his cooperation with OLT Express and that the prime minister had described his son’s cooperation with the airline as “unwise.”

This has prompted Law and Justice MP Marcin Mastalerek to publicly ask Prime Minister Tusk what he knew about Amber Gold and OLT Express’s problems and why he failed to warn the general public.

At a press conference, the prime minister said he had not obtained any information from state services that would have served to warn his son. As WBJ went to press, it was uncertain whether the controversy surrounding Micha∏ Tusk could lead to any major political trouble for the country’s prime minAdam Zdrodowski ister.

is the amount of new jobs that could be created by Poland’s shale gas industry over the next 10 years, according to the Kosciuszko Institute think-tank.

Quote of the Week “Thank you for your confidence.”

Lender Amber Gold, described by Polish officials as “a typical pyramid scheme,” thanked its customers in a letter posted on its website on August 13, where it also announced it was undergoing liquidation.

Figures in focus All states great and small General government expenditure by country as a percentage of GDP, 2011, selected EU27 countries *Highest in EU27 60

57.9

**Lowest in EU27

55.9 50.1

50

49.9

49.1

49.0 45.6

43.6

43.6

40

35.2

30 20 10

Singer’s Warsaw This annual celebration of Jewish culture takes place in the capital from August 25 to September 2. Among the numerous cultural events lined up are theater performances, concerts, film screenings, exhibitions, kosher food stands and workshops on dance, art and crafts. Log onto WBJ.pl to find out more.

September 4-6

ECONOMIC FORUM

Event:

The Economic Forum in Krynica, Poland is one of the most important economic conferences in Central and Eastern Europe. Its mission is to create a favorable climate for the development of political and economic cooperation between the EU and neighboring countries. Each year the forum is attended by some 2,500 guests – including leaders in the fields of politics, economics and society.

It is the largest event of its kind in Central and Eastern Europe.

Krynica Zdrój forum-ekonomiczne.pl

Location: Web:

30

34TH WARSAW MARATHON

Event:

The annual Warsaw Marathon will raise funds for the Bátor Tábor Polska Foundation, an organization that offers therapeutic camp-

Location: Web:

ing opportunities to children with chronic diseases in Central and Eastern Europe. Participants are expected to be sponsored by friends, family and colleagues for every kilometer they run. Organized by Kompania Wra˝eƒ, the marathon route will travel through Warsaw’s key landmarks, including the Old Town.

Warsaw kompaniawrazen.pl

20

POLISH OUTSOURCING FORUM

Event:

Organized by Roadshow Poland and Aspire, the Polish Outsourcing Forum is will present the latest trends in the outsourcing market in Poland and abroad and will feature representatives from business, government and media.

Hyatt Hotel, Warsaw roadshowpolska.pl/e

Location: Web:

ain lga ria **

Sp

Source: Eurostat

Company index . . . . . . . . . . . . . . .6

PBG . . . . . . . . . . . . . . . . . . . . . . . . .5

Agora . . . . . . . . . . . . . . . . . . . . . . .6

Peter Nielsen & Partners . . . . . .10

Adecco Poland

Amber Gold . . . . . . . . . .2, 3, 12, 13 Antal International . . . . . . . . . . . . .6

PGNiG . . . . . . . . . . . . . . . . . . . . . . .3

Asseco . . . . . . . . . . . . . . . . . . . . . . .6

PKM Duda . . . . . . . . . . . . . . . . . . .3

Bank BG˚ . . . . . . . . . . . . . . . . . . . .5

PKO BP . . . . . . . . . . . . . . . . . . . . . .5

Boston Consulting Group . . . . . . .8

DATELINE

Bu

Po lan d

an y rm

UK

Ge

27 EU

Ita ly

0 ece

On WBJ.pl

Gre

A recent TV ad from Republican presidential hopeful Mitt Romney features former Polish President Lech Wa∏´sa and Pope John Paul II. In the commercial Mr Romney accuses US President Barack Obama of conducting a war on religion and pledges to protect religious freedoms. The ad also shows Mr Romney shaking hands with Lech Wa∏´sa. The text on the screen reads, “Endorsed

by Lech Wa∏´sa.”

614,000

*

Romney cites Wal´sa and JP II in ad

Micha∏ Tusk

Fra nce

Medium-sized cities in Poland such as Bydgoszcz, Cz´stochowa, Katowice, Kielce, ¸ódê, Lublin, Poznaƒ and Sosnowiec, lost a total of 204,500 inhabitants between 2002 and 2011, according to figures from Poland’s statistics office.

Numbers in the News

ark

Polish cities losing inhabitants

IN THE SPOTLIGHT

nm

Patriarch Kirill, the head of Russia’s Orthodox Church, arrived in Poland on August 16 as part of a four-day visit that was regarded as a breakthrough in efforts to bring Poland and Russia, and their respective dominant churches, closer together. During his visit he met the head of the Roman Catholic Church in Poland, and the two religious leaders signed a document urging mutual forgiveness and reconciliation between the two nations.

AUGUST 20 – SEPTEMBER 2, 2012

De

Russian Patriarch makes historic visit

ENATA DÑBROWSKA / AGENCJA GAZETA

2

Play . . . . . . . . . . . . . . . . . . . . . . . . .5

BRE Bank . . . . . . . . . . . . . . . . . . .13 BZ WBK . . . . . . . . . . . . . . . . . . . . .7

PLL LOT . . . . . . . . . . . . . . . . . . . . .3

CDM Pekao . . . . . . . . . . . . . . . . . .13

Plus . . . . . . . . . . . . . . . . . . . . . . . . .5

CPL Jobs . . . . . . . . . . . . . . . . . . . .6

Polish Energy Partners . . . . . . . . .4

Deloitte . . . . . . . . . . . . . . . . . .12, 13 Enea . . . . . . . . . . . . . . . . . . . . . . . .6

Polkomtel . . . . . . . . . . . . . . . . . . .12

Grafton Recruitment Polska . . . . .6

Polturf Company . . . . . . . . . . . . . .8

Hays Poland . . . . . . . . . . . . . . . . . .6

Prudential . . . . . . . . . . . . . . . . . . .12

IDMSA . . . . . . . . . . . . . . . . . . . . . . .6

PZU . . . . . . . . . . . . . . . . . . . . . . . . .6

ING Bank Âlàski . . . . . . . . . . . . . . .5 ING Securities . . . . . . . . . . . . . . . .5

Reed Employment Limited . . . . . .6

KGHM . . . . . . . . . . . . . . . . . . . . . . .5

Seko . . . . . . . . . . . . . . . . . . . . . . . .3

Kruszwica . . . . . . . . . . . . . . . . . . . .3

Standard & Poor’s . . . . . . . . . . . . .7

Kulczyk Investments . . . . . . . . . . .4

Start People . . . . . . . . . . . . . . . . . .6

Makarony Polskie . . . . . . . . . . . . .3 Manpower Polska . . . . . . . . . . . . .6

T-Mobile . . . . . . . . . . . . . . . . . . . . .5

Millennium Dom Maklerski . . . . .12

UniCredit . . . . . . . . . . . . . . . . . . . .5

Morgan Stanley . . . . . . . . . . . . . . .7

Virgin Mobile Polska . . . . . . . . . . .5

MOST WANTED! HR CONSULTING GROUP . . . . . . .6

WADWICZ . . . . . . . . . . . . . . . . . . . .6

OLT Express . . . . . . . . . . . . . . . .2, 3

Warsaw Stock Exchange . . . . .3, 12

Orange . . . . . . . . . . . . . . . . . . . . . .5

X-Trade Brokers . . . . . . . . . . . . . .13

NEWS

AUGUST 20 – SEPTEMBER 2, 2012

www.wbj.pl

Parabanks

Amber Gold saga prompts investigation, government action How was the company, which now appears to have been a scheme that cheated thousands of trusting clients, allowed to operate when regulators had long urged prosecutors to act? investment for their nest eggs.

That confidence now appears to have been sorely misplaced, with Andrzej Jakubiak, head of the KNF, telling Polish daily Rzeczpospolita that Amber Gold was “like a typical pyramid scheme. …

People stopped bringing in money and hence the end.”

COURTESY OF KPRM

As early as 2009 the KNF had issued warnings about Amber Gold, putting it on a list of firms that were undertaking banking activities without a banking license, and urged prosecutors to take action. No charges were brought and the business was allowed to expand and invest in new ventures, including low-cost airline OLT Express.

OLT Express made a splash when it began operations in 2011, offering cheap domestic flights that instantly became popular among travelers weary of the country’s patchwork highway network and unreliable rail system. The competition ate into Polish state-owned airline PLL LOT’s market share.

But in late July OLT Express began halting flights and finally declared insolvency, as money from Amber Gold stopped flowing into the carrier’s coffers.

The spotlight quickly turned to Amber Gold’s president, 28-year-old Marcin P. (whose surname cannot be revealed according to Polish law, since charges have been filed against him) who, it was revealed, had previously been

Amber Gold owes around $24 million to 50,000 clients

PGNiG tests 1 bcm gas field Polish oil and gas giant PGNiG has launched test production at its Komorze-3K borehole in the Wielkopolska region.

The deposit’s resources are estimated at 1 billion cubic meters of natural gas. The firm hopes to start commercial extraction next year.

Trade slowing The value of goods and services exported by Polish companies in the first half of 2012 amounted to z∏.291.7 billion, up 9.3% y/y. At the same time, the total value of imports reached z∏.316.7 billion, up 6% over the corresponding period of the previous year. Experts were unenthusiastic, since the figures show trade growing at slower rates that previously.

EU industrial production down

Plenty of warning

At a press conference Prime Minister Tusk said that the government must “move fast enough to protect people” from parabanks that cheat their clients convicted of improperly allocating funds. Amber Gold clients began a run on their accounts, but found themselves unable to withdraw the money they had deposited.

At a press conference in early August, Marcin P. accused the government of conspiring against him in order to eliminate OLT Express and its threat to LOT’s share of the domesticflights market. He pledged to find new financing for Amber Gold and promised that all clients would be paid back.

The money never materialized however, and the company announced that it was undergoing “liquidation” on August 13. In a letter posted at branches around the country and on the firm’s website that day, the company said that it would pay back all of its clients but that the process would be “drawn out in time” due to the nature of the liquidation process. As WBJ went to press, there was little optimism that those clients would ever see a penny of their investments, however.

COURTESY OF FLICKR/MJANIEC

“A typical pyramid scheme” is how officials are describing Amber Gold, a Polish “parabank” that attracted clients with 10 percent returns on investments in gold-indexed instruments and has now gone bust, leaving some 50,000 clients in the lurch to the tune of $24 million.

The saga, which has gripped the Polish media for weeks, prompted action by no less than the prime minister himself and spurred an investigation that had members of Poland’s Internal Security Agency (ABW) entering the owner’s home and several branches of the business to comb through documents, looking for evidence of money laundering.

Parabanks (see Special Report, pp. 12-13) are businesses that offer some services that a traditional bank might, but which do not have banking licenses and are not under the authority of Poland’s banking regulator, the Financial Supervision Authority (KNF).

While such businesses account for only a small fraction of Poland’s financial services industry, (they are estimated to hold around 0.4 percent of the sector’s total assets) they are popular with those who have difficulty getting loans elsewhere, or who are seeking higher returns on investment than what is offered by regular banks.

Amber Gold’s offer was particularly attractive to older clients, who saw the goldindexed accounts as a secure

3

‘A question for the prosecutor’ How the company was allowed to operate despite being on a KNF blacklist – and why prosecutors failed to act – is still unclear.

“Why Amber Gold was

allowed to operate for so long is a good question, but one for the prosecutor,” ¸ukasz Dajnowicz, spokesperson at the KNF, told WBJ. “It took only a few weeks between the moment when we received information from the market about Amber Gold and when we expressed our concern.”

The Wall Street Journal quoted Wojciech Szelagowski, a spokesperson for the prosecutor’s office in Gdaƒsk, which is investigating Amber Gold, as saying that investigations involving business matters “take a long time because of their nature.”

Opposition parties in the Polish parliament have also called for an investigation.

Soon after Amber Gold announced it had ended operations, Prime Minister Donald Tusk called on Finance Minister Jacek Rostowski to hold a meeting of Poland’s Financial Stability Committee, a roundtable that comprises representatives of the National Bank of Poland, the KNF, the Justice Ministry and Poland’s ombudsman for citizen’s rights, to discuss the situation and make proposals as to how authorities could act earlier in such circumstances. The committee had not been brought together since the height of the global financial crisis.

“All signs on heaven and earth suggest that people who

put their trust in that company have been cheated,” said Prime Minister Tusk at a press conference on August 14. He added that it was the state’s obligation to “move fast enough to protect people from those schemes.”

What did the PM know?

But the uproar has brought the prime minister’s actions into question as well. His son, 30-year-old Micha∏ Tusk, had been working for OLT Express and admitted in an interview that his father had warned him about the company’s potentially shady dealings. Polish media have cited other sources that said it was unimaginable that the Amber Gold issue had not been brought to the prime minister’s attention earlier.

If it had been important enough to bring to the attention of the PM, many have asked, then why weren’t louder alarm bells raised?

That question remains to be answered. For now, Amber Gold’s clients wait to hear word as to whether they have permanently lost all of their investments. Several hundred of them are already preparing a class action lawsuit.

On August 17 Marcin P. was brought before a court in Gdaƒsk to hear charges of carrying out illegal banking activities and forging documents.

Andrew Kureth, Alice Trudelle

Polish industrial output rose by 1% on an annualized basis in June, but fell 2% month-onmonth, according to Eurostat data. On a monthly basis only the UK (-2.5%) saw a larger fall. In the EU overall, industrial production fell by 0.9% compared to May, with most individual countries seeing their outputs fall m/m. In the euro zone, the decline was a little less steep than in the EU overall, at -0.6%. On an annualized basis, the EU’s total industrial output fell 2.2%.

Food sector struggling Since the beginning of the year the WIGSpo˝ywczy index, which lists food companies on the Warsaw Stock Exchange, has had a weaker performance than the market. The shares of several large food producers have been seriously discounted, such as those of meat producer PKM Duda shares (39%), fish producer Seko (60%), vegetable fats manufacturer Kruszwica (48%) and pasta producer Makarony Polskie (25%).

The food sector has already seen 15 bankruptcies since the beginning of the year, with the meat sector being hit the hardest. ●

NEWS

www.wbj.pl

Kulczyk bids for PEP Poland’s richest man Jan Kulczyk has launched a z∏.671 million bid for Polish Energy Partners (PEP), a WSE-listed company that builds and operates wind farms and delivers biofuels to energy producers. Polenergia Holding, part of the Kulczyk Investments group, is offering z∏.31.50 per share for PEP, and hopes to acquire at least 80% of the stock, reported Parkiet.

Polish vodka bounces back After three years of declining sales the vodka market in Poland is once again seeing upward growth, reported Dziennik Gazeta Prawna. In the first half of this year sales of spirits grew by 2.5% more than in the same period last year, with sales of vodka making up 90% of the total figure.

The warmer-than-usual winter was seen as the main factor behind increased sales, since it allowed Poles to do more shopping in general. In Q2, sales also received a boost from Euro 2012. ●

AUGUST 20 – SEPTEMBER 2, 2012

Defense

More Poles emigrate

Building own missile shield a top priority for Poland Without a modern air defense system, the effort put into modernizing the country’s armed forces is “pointless,” says President Komorowski Poland, one of a handful of European countries that have increased defense spending over the last decade, including throughout the European financial crisis, is planning to build a several-billion-z∏oty missile- and air-defense system.

The country “needs an antimissile shield,” said President Bronis∏aw Komorowski in a speech on August 15. Without a modern air-defense system, Poland is “defenseless” in the face of what happens on modern battlefields, where the first hours of combat see plane and rocket attacks, said the president. If Poland cannot defend itself against those, then huge resources spent on modernizing the Polish armed forces would turn out to be “pointless” in the case of an attack, he said.

Initial estimates put the

COURTESY OF FLICKR/PRESIDENT.PL

4

President Komorowski said Poland is currently “defenseless” if it were attacked by air cost of the Polish missile shield at between z∏.8 billion and z∏.15 billion over the next 10 years. The project is set to be part of a broader and ongoing modernization of Poland’s army and defense system.

A new direction It is not a coincidence that Mr Komorowski made these declarations at the Tomb of the Unknown Soldier in Warsaw on Army Day. Both are powerful reminders that the independence Poland has enjoyed over the last 23 years follows seldom-interrupted centuries

of occupation and domination by its powerful neighbors.

After joining NATO in 1999, Poland has been heavily involved in international missions, including in Iraq and in Afghanistan. President Komorowski said Poland had spent around z∏.5 billion “over the past few years” on the NATOISAF mission in Afghanistan alone. This compares to a total planned military budget of z∏.29.5 billion for 2012.

Poland’s defense budget has almost doubled from z∏.15 billion in 2001, when parliamentarians voted to allocate 1.95

percent of GDP to defense each year.

It now seems Poland is shifting its focus to territorial defense over expeditionary missions, with Mr Komorowski saying that money saved after Poland withdraws its 2,457 troops from Afghanistan in 2014 will be directed to the shield.

“The building of our own national defense capability is our chief duty,” said Mr Komorowski.

The planned Polish missile shield will be part of the NATO Missile Defense System, and will count as part of Poland’s contribution to the organization. “The idea is to not build a system that would ensure the safety of some NATO countries exclusively, but to build a system that would defend the whole territory of NATO member countries, including Poland,” said the president.

Mr Komorowski did not mention links between the missile shield he proposed and the US-initiated missile defense system.

Poland may be growing more than its counterparts in the euro zone, but that apparently hasn’t lessened many Poles’ fears that as the slowdown bites Europe harder, they will find it more difficult to get ahead in Poland. Those fears have prompted a new miniwave of emigration, according to Rzeczpospolita, which wrote earlier in August that young, educated Poles are leaving for the UK, Germany, the Netherlands and Norway, where salaries are far higher than in Poland.

Experts estimate that some 2.5 million Poles may now be living permanently abroad, and that number is set to rise.

According to data recently published by the UK’s Office for National Statistics, last year out of one million Poles living in the British Isles 614,000 were permanent residents. That is up from 545,000 a year earlier, marking a rise of nearly 13 percent.

“I had expected to see an increase in the number of residents, but I never thought it would be so high,” said prof.

Krystyna Iglicka-Okólska, an expert on migration at the ¸azarski University in Warsaw.

Alice Trudelle

AS

SUBSCRIBE FOR 1 YEAR AND SAVE UP TO 50% OFF THE COVER PRICE Choose one option by checking the box

❏ WBJ IS NOW AVAILABLE IN DIGITAL FORMAT. READ WBJ AS A PDF OR E-ZINE.

OPTION 1

WBJ Electronic

Wa Warsaw Business Journal PDF version and a link to view WBJ in e-zine format delivered to your e-mail address each week for 12 months. for Everywhere: zł.424

❏

OPTION 2

WBJ Print

ENQUIRIES AM I C HA LI K @ VA L K EA .C O M, O R C AL L + 4 8 ( 2 2 ) 6 78-9912

In Europe: €297

OPTION 3

Outside Europe: €374

WBJ Premium

Warsaw Business Journal print edition delivered each week to your address for 12 months, plus WBJ PDF version and a link to view WBJ in e-zine format delivered to your e-mail address each week.

Also receive Investing in Poland 2012 (zł.78 value) and Book of Lists 2012 (zł.100 value).

In Poland: zł.691

Warsaw Business Journal print edition delivered each week to your address for 12 months, plus receive Investing in Poland 2012 (zł.78 value) and Book of Lists 2012 (zł.100 value).

In Poland: zł.550

❏

In Europe: €330

Outside Europe: €407

Please fax this form to: +48 22 639 85 69 or mail it to our office: Subscriptions Warsaw Business Journal Valkea Media S.A. ul. Elblàska 15/17, 01-747 Warsaw, Poland

CLIENT DETAILS

PAYMENT OPTIONS (please check one)

Name ......................................................................................................................

Company ......................................................................................................................

Address ......................................................................................................................

Postal code ......................................................................................................................

City ......................................................................................................................

Country ......................................................................................................................

Telephone/Fax ...................................................................................................................... e-mail ......................................................................................................................

NIP (Poland)/EU VAT number (EU countries) ......................................................................................................................

❏ Pre-payment by bank transfer upon receipt of a pro-forma invoice. The pro-forma invoice will be sent to you immediately upon receipt of your order.

Your subscription will start within one week of payment. ❏ Credit card: ❏ American Express

❏ Visa

❏ Mastercard

Cardholder name ......................................................................................................................

Number ......................................................................................................................

CVV2/CVC2/CID

Expiration date

....................................................... ............................................................

Signature ......................................................................................................................

AUGUST 20 – SEPTEMBER 2, 2012

BUSINESS

Bank results

www.wbj.pl

5

Mobile operators

Construction sector woes Virgin Mobile prepares to eat into banks’ profits enter Polish market PBG, announced a consolidated net profit of z∏.167.6 million, marking a 28 percent drop from Q2 2011.

Another of PBG’s creditors, PKO BP, saw its Q2 net profit drop to z∏.948.6 million, compared to z∏.967 million a year ago. The bank had to write off a total of z∏.573.8 million in bad loans for the period.

Piotr Palenik, analyst at ING Securities, confirmed that ING Bank Âlàski’s lower profits resulted to a large extent from the PBG fiasco. However, he said that PKO BP’s lower profit was not directly a result of PBG’s bankruptcy, “but the bad situation of the construction sector as a whole had some influence.”

Analysts expect that more banks’ results will see the effects of the difficulties in the construction sector.

The firm is expected to launch its Polish service by the end of August

It is aiming to provide better pre-pay services than its rivals but analysts say a quick win is unlikely

Remi Adekoya

COURTESY OF WIKIMEDIA COMMONS

The woes in Poland’s construction sector are weighing on banks, as developers are unable to repay loans they took to build stadiums and infrastructure for the Euro 2012 soccer championships.

Poland’s third-largest construction firm, PBG, filed for bankruptcy in June after overextending itself due to its involvement in construction projects for the tournament.

At the time, it was indebted to 12 different banks to the tune of some z∏.1.7 billion.

Nor did other construction firms escape unscathed. In the first half of 2012, the sector saw a 66 percent rise in bankruptcies.

The failures – especially

that of PBG – are hitting banks’ second-quarter results hard.

Bank BG˚, one of PBG’s creditors, announced a Q2 2012 loss of z∏.1.02 million, a huge drop compared to its z∏.26.5 million net profit for the same period last year. In total, the bank was forced to write off z∏.115.4 million in bad loans for the quarter. It also had to create reserves of z∏.157.7 million, compared to just z∏.53.7 million last year.

“The reason for this is mostly higher write-offs regarding loans for enterprises, including from the construction sector especially with one big client, which announced bankruptcy, and also from mortgages for retail clients,” the bank announced in a communique.

ING Bank Âlàski, which also made substantial loans to

COURTESY OF VIRGIN MEDIA.COM

The bankruptcy of builder PBG, among others, is taking its toll on banks’ results

Several banks are feeling the effects of PBG overextending itself working on three Euro 2012 stadiums, including Warsaw’s National Stadium

Virgin Mobile, the mobile operator belonging to British billionaire Richard Branson, is expected to launch operations in Poland by the end of August.

The company, which will operate under subsidiary Virgin Mobile Polska, wrote in a statement that it hopes to differentiate itself by offering better prepay services than its rivals in Poland. “We will bring firstclass service to a market where pre-pay customers have been treated like second class citizens,” Kristian Myrup, CEO of

Virgin Mobile Central and Eastern Europe, said in a statement.

Analysts say, however, that Virgin Mobile Polska is not in for an easy ride, since it will have to compete in a crowded market with established players including T-Mobile, Plus and Play.

“As a new entrant it will be fighting for market share, offering deeper discounts and undercutting already-thin margins,” said Przemys∏aw SawalaUryasz, analyst at CAIB UniCredit.

“At this point, gaining market share when we know customers are not spending and there is stiff competition is going to be difficult.”

What is more, as a virtual

operator, it will rent infrastructure belonging to rivals Play and Orange, meaning its overheads will be higher than many of its competitors’.

“History has shown that none of the companies operating in this model has so far been able to conquer the market,” said Mr Sawala-Uryasz.

“Profit margins will be very slim.”

The regulator has given Virgin Mobile a helping hand in one area, though, allowing it to charge customers who call from other networks more than its own customers are charged when they call rival networks.

This preferential treatment will, however, come to an end in 2013.

Gareth Price

Heavy industry

The copper giant reported lower Q2 profits and may revise its full-year forecast downwards KGHM, Europe’s secondlargest copper producer, posted second-quarter consolidated net profits of z∏.1.34 billion, down from z∏.2.28 billion a year earlier.

On top of lower metals prices and rising costs of basic operations, the state-controlled miner’s bottom line was hit by a new mining tax, which is expected to bring in z∏.1.8 billion to the Polish budget this year. KGHM is expected to pay a full-year levy of z∏.1.3 billion.

“The substantial decrease in profit versus 2011 is mainly due to: recognition in the result for 2011 of the sales of

telecom assets, a change in the valuation of exchange differences, effects of the introduction of the minerals extraction tax and the deterioration of macroeconomic conditions,” KGHM president Herbert Wirth said in a statement.

The firm is now considering a review of its full-year forecast. In April, the firm’s supervisory board had announced it expected net profit for 2012 to amount to z∏.3.8 billion, compared to z∏.11.08 billion a year earlier.

“The company reached 54 percent of its sales target and 78 percent of its earnings target for 2012. This is an effect of a higher-than-expected currency rate,” Mr Wirth said.

“At the same time we see negative signals from the global economy. … We are considering the possibility of verifying our full-year forecast,” he

added.

Though the acquisition of cheap foreign concessions is a part of the firm’s long-term business plan, KGHM is also currently making plans to expand its prospection work in Poland.

In Kwielice, a town in western Poland, the copper miner is set to begin construction on the largest mine in Europe. The company is investing some z∏.700 million in the shaft, which will reach a depth of 1,319 meters.

The company has also asked the Ministry of Environmental Protection to obtain additional concessions around areas where copper is already exploited.

Administrative procedures are under way for the approval of four new concessions.

David Ingham

COURTESY OF KGHM

KGHM hit hard by new mining tax

The copper producer is expected to pay a full-year tax levy of z∏.1.3 billion

6

BUSINESS

www.wbj.pl

AUGUST 20 – SEPTEMBER 2, 2012

Executive recruitment

Specialization is the key Recruitment agencies in Poland are becoming increasingly specialized in order to serve companies that are operating in niche markets

professionals and managers in Poland is maturing in the direction of more developed markets in Western Europe while also showing high levels of activity.

Some 53 percent of Poland-based employers surveyed by recruitment agency Antal International said they

The recruitment market for

HR companies in Poland – selection and recruitment Ranking of companies by total number of personnel recruited in 2010 Rank

Company name

1

planned to recruit specialists and managers in the third quarter of this year, putting only four other EU countries ahead of Poland in this category.

IT and shared-service center/BPO employers expected to be the most active during the period, in line with a trend that is seeing increased demand in more advanced and increasingly specialized sectors.

Total number of personnel recruited

Increased specialization

Adecco Poland

2,893

2

Hays Poland

1,230

3

Manpower Polska

892

4

Grafton Recruitment Polska

594

5

CPL Jobs

570

6

Antal International

321

7

WADWICZ

320

8

Reed Employment Limited

305

9

MOST WANTED! HR CONSULTING GROUP

290

10

Start People

255

The IT market is showing strong growth in Poland, according to Antal research, while the finance, banking, insurance and automotive sectors are also developing apace, creating strong demand for specialists and managers.

“In five years’ time, IT, automotive, shared services and BPO will be where the major new investments are made, creating more demand

Source: Book of Lists 2012

Advertising market

Agora warns of further gloom for ad market Gazeta Wyborcza’s publisher saw its Q2 net profit fall sharply, and now plans to slash 250 jobs

At the very highest level Poland’s recruitment sector is very much a candidate’s market, with many openings remaining vacant for long periods of time.

“Salary expectations can be high among the most in-demand managers and specialists – in Warsaw, an IT manager may even ask for a higher wage than he would, for example, in Hamburg,” said Artur Skiba, managing director Poland at Antal International and vice president at the Association of Employment Agencies (SAZ).

“But while it is not easy to find the right candidate at this level … a good recruiter finds a way to attract them,” he said, adding for specialists in those fields,” said Artur Skiba, managing director Poland at Antal International and vice president at the Association of Employment Agencies (SAZ).

The proliferation and development of new industries and sub-sectors has spurred recruitment firms themselves to employ more specialized headhunters, many of whom once worked in the industries they recruit for.

“A specialized recruiter understands the market better and can communicate better with both the candidate and the prospective employer,” said Mr Skiba.

“Those recruitment companies that are still here after

that it is not just about the salary; employment perspectives and the reputation of a company are also key.

Part of the explanation for the dearth of suitable candidates for high-level positions may come from the lure of employment abroad, where Polish managers and specialists are in high demand.

“At a managerial level Poland is now one of the most recognized and specialized markets. Previously, clients in Germany wanted to employ Poles because they were cheaper, now it’s because Poles have good skills and a strong work ethic – this is a big change,” said Mr Skiba. ●

the crisis hit in 2009 are the more specialized ones,” he added.

Maturing market The market is maturing in other ways too, with employees now showing increased loyalty to companies that are in turn offering them better long-term prospects.

“In 2000-2004 there were lots of jumpers – employees would change jobs every two years, getting 100 percent wage increases with every move,” said Mr Skiba. “That’s over now. Staying in a job for just two years is not good, we are now seeing mature candidates spending four years working for a single employer,” he added.

Candidates also have high-

er requirements of their prospective employers, from whom they expect more and better opportunities to develop their careers.

The nature of employment contracts is also changing, albeit at a slower pace.

Whereas temporary employment contracts for managers and specialists are commonplace in the UK, the temp market for specialists in Poland is only just starting to grow.

“As work is becoming increasingly project-based, more and more candidates are willing to work as temps and more firms are searching for them,” said Mr Skiba.

“This can be beneficial for both parties.”

Gareth Price

IT market

Asseco Business Solutions reports drop in H1 sales, profits SHUTTERSTOCK

Soon after broadcaster TVN presented its gloomy forecasts for Poland’s TV ad market, claiming it will shrink by some 6 to 9 percent this year, another leading media group – Agora – also published somber predictions for 2012.

According to Agora, the publisher of Gazeta Wyborcza, the value of the entire advertising market in Poland will decline by 2 to 5 percent.

Organizations are expected to increase online advertising spending by approximately 8 to 11 percent, but at the same time spend up to 20 percent less on ads in newspapers, the firm said in a report. Agora also forecasts that the TV ad market will shrink by 3 to 6 percent, and the radio ad market will contract by 1 to 4 percent.

Earlier in August the company released its financial results for Q2, revealing that its net profit had plummeted 96.7 percent year-onyear to z∏.700,000, while revenues were down 11.3 percent to z∏.283.1 million.

Average paid circulation of Gazeta Wyborcza was also

Candidate’s market

The newspaper ad market will shrink by 20 percent this year, according to Agora down (by 15.5 percent) in Q2, but it still retained its position as the most widelycirculated “quality daily” in Poland, according to Agora.

“The company suffered due to a very poor performance of the ad market across all segments in which it operates,” said Sobies∏aw Pajàk, analyst at brokerage house IDMSA. “This was partially due to transient factors such as Euro 2012, which actually sucked money out of the ad market,” he added.

Agora now plans a round of layoffs as part of a costcutting exercise being carried out in response to the deterioration of its operating environment. The firm

plans to slash some 250 positions by the end of January 2013. Analysts say these cuts, which account for around 7 percent of the company’s workforce, could bring savings of z∏.20 million per year. “This is a step in the right direction but it is doubtful it will be enough [on its own],” said Mr Pajàk.

He added that economic uncertainty in Western Europe is leading international firms with branches in Poland to cut advertising budgets across all of their markets. “The feeble Polish ad market performance will be exacerbated in coming months,” he said.

Gareth Price

Meanwhile, Asseco Group’s president has written a letter of complaint to the PM, claiming Asseco Poland has been discriminated against Polish IT company Asseco Business Solutions released sharply lower annualized financial results for the first half of 2012. The company’s sales fell 13 percent year-onyear, from z∏.80.85 million to z∏.70.37 million, while net profit dropped 26 percent, from z∏.15.52 million to z∏.11.46 million.

“The worse results are the effect of last year’s high benchmark,” Mariusz Lizon, a member of the board at Asseco Business Solutions, told reporters. “As a result of changes in VAT at the beginning of 2011, small firms massively modernized their programing.”

He added that the eco-

nomic slowdown has meant fewer companies are looking to buy new IT systems.

Wojciech Barczentewicz, chairman of the board at the company, said the firm had actually done relatively well considering the downturn in the IT market.

“Despite the downturn in the market, Asseco Business Solutions has achieved good financial results for H1 of this year,” Mr Barczentewicz said in the statement.

He added that the company has high liquidity, which gives it financial stability and has allowed it to pay high dividends. The company even has expansion plans.

“We are starting the international expansion of Mobile Touch, the latest version of [Asseco’s] mobile system. We are starting the process of creating a foreign network, responsible for sales and implementation of this product,” Mr Barczentewicz said.

Asseco discriminated against?

Earlier in August, Asseco Group president Adam Góral wrote a letter to Prime Minister Donald Tusk in which he complained that Asseco Poland (one of several companies in the group) was being discriminated against. Asseco Poland recently lost several major tenders involving companies controlled by the state. It wasn’t chosen to implement its systems in state-owned utility Enea, Bank Gospodarstwa Krajowego and, most recently, in insurer PZU. This amounted to discrimination against Asseco, Mr Góral argued in his letter to the prime minister.

“What we see makes us very concerned. We are afraid that some of these actions might be aimed directly against us,” Mr Góral wrote.

Izabela Depczyk

FINANCE & ECONOMICS

Poland to cut 2013 GDP target?

As the euro crisis bites, the government may have to adjust its budget assumptions The government is considering revising its forecast for economic growth in 2013 down from its current assumption of 2.9 percent to 2 percent or even 1.5 percent, an economic advisor for Prime Minister Tusk said in August.

Dariusz Filar, a former member of the interest-rate setting Monetary Policy Council and an economic advisor to the prime minister, said that while Poland faces “no risk of recession,” the government may need to adjust its forecast for growth next year, as the euro zone’s debt crisis intensi-

fies and “recession spreads across the euro countries.”

Eight euro-zone countries are currently in recession.

The chief economist at Poland’s Finance Ministry, Ludwik Kotecki, also said that the government may lower its 2012 growth forecast at the end of August. In June, the government approved a draft budget for 2013 in which it was assumed that economic growth would speed up from 2.5 percent this year to 2.9 percent next year.

Meanwhile, Morgan Stanley wasn’t waiting to slash its forecast for Poland’s economic growth next year. It now believes the Polish economy will grow at a rate of 2.1 percent – a huge drop from the

previous forecast of 3.6 percent.

It also lowered its forecast for this year from 2.7 percent to 2.6 percent.

“During the next two years, the Polish economy will grow less than its potential because of a tougher internal situation and increased caution on the part of households, companies and banks,” Polish daily Gazeta Wyborcza quoted Morgan Stanley representatives as saying.

The bank explained its decision by a fall in Poland’s industrial production for Q2 in 2012, lower retail sales, car production data, the worsening situation in the manufacturing sector and a low growth in household credit.

Andrew Kureth

7

Inflation falls to 4 percent Poland’s inflation rate came in at an annualized 4.0 percent in July, below expectations, but still far above the interest-ratesetting Monetary Policy Council’s target of 2.5 percent. In June, inflation was 4.3 percent year-on-year. For July, the market had expected an inflation rate of 4.1 percent. A steep fall in food prices was the driver behind the lowerthan-expected figures.

“Still, it seems that this is not enough to encourage a majority of MPC members to cut interest rates this year, especially as CPI will remain close to 4 percent (much above target) until late autumn,” said BZ WBK economists in an emailed comment following the release of the figures. “Nevertheless, a gradual easing of [the] Council’s stance will

probably be visible.”

“Interest rate cuts cannot be ruled out next year, especially if [the] economic growth slowdown proves to be deeper than previously expected,” the bank’s analysts added.

Data from the credit market, despite signals from an NBP study showing increasing demand for loans, showed a further deceleration of loans, especially in the household secAK tor, the analysts said.

Coming back down?

Poland's inflation rate, January 2011 to July 2012 (%) 5.5

5.0

4.5

4.0

3.5

3.0

Source: Central Statistical Office

Economic growth

www.wbj.pl

Jan .

Feb '11 .

Ma '11 r. ' Ap 11 r.

Ma '11 y Jun '11 .'

Jul 11 .

Au '11 g.

Se '11 p.

Oc '11 t.

No '11 v. ' De 11 c.

Jan '11 .

Feb '12 . '1 Ma 2 r.

Ap '12 r.

Ma '12 y Jun '12 .'

Jul 12 . '1 2

AUGUST 20 – SEPTEMBER 2, 2012

S&P affirms Poland’s credit ratings SMEs have pessimistic outlook In August ratings agency Standard & Poor’s announced it had affirmed Poland’s A-/A-2 sovereign credit ratings for long- and short-term foreign currency and its A/A-1 longand short-term local currency ratings. The agency also held its stable outlook on Poland’s ratings.

Poland’s “commitment to

continued fiscal consolidation and its monetary flexibility, with its floating exchange rate enabling Poland’s resilient economy to adjust to external shocks,” were behind the decision, the agency said.

However, S&P also pointed to more negative areas that need to be watched closely, including “Poland’s relatively

high levels of government debt, comparatively low per capita GDP, and large external financing needs.”

It added that the government now has less fiscal flexibility, since the country’s debtto-GDP ratio has passed the legal threshold of 50 percent since 2010.

AK

Entrepreneurs in small and medium-sized enterprises (SMEs) expect the second wave of the financial crisis to be worse than the first, according to a survey carried out by the employers association PKPP Lewiatan. In total, 1,500 SME entrepreneurs were surveyed.

Fifty-nine percent of those questioned believe that the

current economic slowdown will be worse than the 20082009 one. Only 11 percent of the respondents said the crisis won’t be as deep as the previous one while a paltry 4 percent believe the Polish economy won’t feel any slowdown.

“These opinions mean we can expect certain attitudes in the activities of entrepreneurs

in 2012 and in the next year, namely a significant weakening of investment appetite and a decidedly limited inclination to create new jobs in those firms which see a bigger crisis coming than the previous one,” said Ma∏gorzata Starczewska-Krzysztoszek, chief economist at PKPP Lewiatan.

AK

8

INTERVIEW

www.wbj.pl

Glass ceiling intact Women who aim to advance to top management positions in the private sector still face significant barriers, according to experts at the Boston Consulting Group. It is in rich countries where women come across the most barriers, the report shows. According to Boston Consulting Group data, while globally women occupy an average of 21% of all managerial positions, in BRIC countries the figure rises to 26%, and to 32% in Southeast Asia, compared to only 13% in Germany, 17% in the US and 5% in Japan. “The biggest problem is balancing work and family life,” said Aleksandra Sroka, project manager at Boston Consulting Group. The problem also concerns Poland, where although the proportion of female managers (30%) is quite high, there are not many at the very top. “They are assigned to certain departments like accounting or HR, with men dominating the top managerial positions,” said Ms Sroka. ●

AUGUST 20 – SEPTEMBER 2, 2012

Social equality

Poland’s long road towards equal treatment Agnieszka Koz∏owska-Rajewicz, the government plenipotentiary for equal treatment, discusses the difficulties of changing minds about issues of equality Ewa Boniecka: Some sociologists claim that Polish society as a whole holds conservative views on ethical problems and the role of family. Moreover, reports show that it is also prone to prejudice towards various minorities. How does this influence the government’s policy for equal treatment?

Agnieszka Koz∏owska-Rajewicz: It is much more complex than could be perceived. Poles in principle support equal treatment, while in some matters they are conservative, in others liberal. So in my view there are no strict rules for defining conservative and liberal attitudes towards all matters. And when we look at our political parties, we see that their rightist and leftist elements are mixed in their attitudes towards various problems.

So, for instance, while one group of Poles supports the traditional model of family, where the woman takes care of the home and children and the man provides the means for it, there are Poles who accept and live in different models of family – most of them in the sustainable, partner model where both partners are active at home and at work.

The family structure is changing and now that men are entitled to take 14 days leave after the birth of a child, there is more acceptance for women who return to work just after maternity leave and for men who engage in caring for the child. This is very good for children, who have more possibilities for staying in contact with both parents.

There are also families with only one parent, after a divorce or the death of one

Media patronage

Arabian Horse Days Poland 2012

34th

The Polish National Arabian Horse Auction drew buyers from around the world The Arabian Horse Days is an annual event dedicated to Polish purebred Arabian horses.

The event, organized by the Polturf Company on behalf of Polish state-owned studs in Janów Podlaski, Micha∏ów and Bia∏ka, is held in honor of the Polish Arabian Horse Breeding program.

Arabian Horse Days comprises two parts – the Polish National Arabian Horse Show, organized annually since 1979, and the Pride of Poland Arabian Horse Auction (since 1970).

The latter took place over consecutive days earlier in August at the Janów Podlaski Stud, drawing buyers from across the globe.

The star of the auction was an eight-yearold mare, Eyrene, who was purchased by a buyer from the United Arab Emirates for €440,000.

The second most expensive horse at this

year’s event was a nine-year-old mare by the name of Etnologia, bought by Shirley Watts, the wife of Rolling Stones drummer Charles Watts, for €370,000.

Overall the event saw the sale of 19 mares, bringing in a total of €1.325 million.

To date, the biggest sale so far has been of a horse named Kwestura, for which a buyer from the United Arab Emirates shelled out €1.25 million in 2008.

During the Arabian Horse Days, the attention of horse breeders and owners from all over the world is focused on Janów Podlaski Stud, which is proud of its long tradition. It has been operational since 1817 and despite the ravages of war, it has become one of the most highly regarded on the international scene.

The event combines elements of Polish history and tradition with cultural heritage and brings together people from the political, business as well as cultural scenes. ●

partner, but all of them are the most important place for all the family members and all should be supported. So in conducting policy I regard it as being the most important thing to give all family models equal treatment and respect. Moreover I think that many Poles, especially young Poles, respect the family in a little bit of an abstract way, without looking too much for formal arrangements.

is also a law forbidding the beating of children and a law against stalking, which also covers stalking on the internet.

My office is currently preparing documents for the ratification of a bio-ethical convention which will soon be sent for approval by the Council of Ministers. The liberal project concerning in vitro fertilization prepared by MP Ma∏gorzata Kidawa-B∏oƒska reached its second reading in parliamentary commissions in the previ-

“I think that many Poles, especially young Poles, respect the family in a little bit of an abstract way, without looking too much for formal arrangements” There are divisions in the ruling Civic Platform (PO) party not only towards ethical matters, like in vitro fertilization, same-sex unions and conventions on bioethics. As a PO MP you support the liberal proposal of MP Ma∏gorzata Kidawa-B∏oƒska concerning in vitro procedures and you do not hide your liberal approach to other ethical matters. Does this put you in a difficult situation within the government?

I do not consider my situation as being difficult. I am convinced that my views concerning many ethical matters match the mainstream social thinking. But there are groups of people who have different views, so it is natural that there is a need to debate those matters and to base final decisions on solid arguments and not on conflict. I do not look at these debates as win-lose confrontations, because in my view winning as a result of creating strong conflict would mean that the conflict would continue after the bill has been introduced. So perhaps in contradiction to my image as a fighter, I believe in an evolutionary strategy in approaching ethical matters. It is time-consuming and I am often frustrated that some matters take so long to be dealt with, but finally I have concluded that sometimes it has to be that way.

In politics patience is a great virtue. Step by step, we are introducing important changes. In the previous term quite a lot of legislative changes were introduced to combat domestic violence.

Now, for example, the offender has to leave the shared residence – not the victim. There

ous term and is now the basis for an official Civic Platform project which will be sent to the speaker of the Sejm in September.

Will the in vitro method be financed from the state budget?

None of the projects concerning in vitro that have been presented in parliament deal with financing. This is because in Poland there has to be a separate bill for dealing with financing for medical procedures from public funds. … We first have to pass a bill concerning in vitro which introduces the medical monitoring and inspection necessary for ensuring the safety of patients, as well as necessary standards for in vitro clinics and medical personnel engaged in the procedure. Presently we have no regulations concerning in vitro, no monitoring and no refunds for this innovative method of overcoming infertility. There is also a project in the Sejm by Law and Justice (PiS) forbidding in vitro, even including a penalty.

There is still a long way to go and discussions will be tough.

What is the government’s attitude towards legislative initiatives concerning registered partnerships?

Projects have been presented in the Sejm by the Democratic Left Alliance (SLD), Palikot’s Movement (RP) and PO’s parliamentary caucus. All of them concern the registration of partnerships both for heterosexual and homosexual couples, but do not give samesex couples the right to adopt children.

Various findings show that while 70 percent of Poles would support a bill for registering heterosexual partner-

ships, only 25 percent would accept unions between homosexuals. This is a picture of the present social mood. I think that people’s attitudes can change, but it is a long process.

So maybe now we need a longer discussion about the bill on registered partnerships, stressing the legal benefits for those concerned.

Your office’s project for “equal treatment as the standard of good governance” is being deliberated in the Chancellery of the Prime Minister. These are fine words, but how will they look in practice?

Neither in practice nor at the legislative level have we reached standards of equal treatment which fully satisfy us.

In the framework of the project, studies have been conducted about Poles’ attitudes towards various minority groups. And the findings show that Poland is changing, is becoming more open, but they also point to a hierarchy of perception among Poles towards various minorities. For instance they show towards which groups Poles keep the biggest distance. In first place are the various sexual minorities and those who are mentally ill. In another study … the answers show that the worst discrimination is against the mentally ill, next comes sexual minorities and disabled people.

These are findings which allow us to draw a concrete conclusion in shaping state policy in the domain of equal treatment, and we are now preparing a document which would act as a basis for ministers’ actions.

Have there been studies conducted about Poles’ attitudes towards other nationalities?

Yes, they show that the biggest prejudices are held towards the Roma people, with 40-50 percent of Poles declaring this, which is less than a few years ago when it was 70 percent. In second place were Arabs, while other ethnicities were in distant places.

You are now involved in a battle for Poland to ratify the Council of Europe convention for preventing and combating violence against women and domestic violence. How do you see that situation?

I would not describe the situation as a battle, it is a confrontation of opinions concerning the interpretation of that convention. At the start of dis-

AUGUST 20 – SEPTEMBER 2, 2012

INTERVIEW

COURTESY OF THE OFFICE OF THE GOVERNMENT PLENIPOTENTIARY FOR EQUAL TREATMENT

“We lack a gender perspective in government policy for combating domestic violence”

Ms Koz∏owska-Rajewicz says Poland can do much more to encourage equal treatment of minorities cussions, I thought that the whole content of the document was clear and not controversial in its aim of protecting women against violence. However, some politicians did not share my view and a heated discussion has developed concerning gender perspectives and gender-related aspects of violence … for some of my colleagues [the convention] was a source of doubt and a threat to the “traditional Polish family.” So we had a discussion about the meaning and interpretation of two or three provisions in the convention, but I am sure we will find a lot more problems during further, more detailed discussions.

Among the opponents of the convention is Minister of Justice Jaros∏aw Gowin, who argues that it would have a negative impact on the role of women in the family. Meanwhile Prime Minister Donald Tusk said recently that the government will not speed up the process of signing and ratifying the convention. Do you expect a deadlock over this matter?

No, but at the same time I cannot imagine a situation in

which this important convention, which sets standards for the protection of victims of domestic violence, will be rushed through parliament by force, because it is not required. So I agree with the prime minister when he says we need more time for discussion, in order to deal with the uneasiness that has developed over the convention.

I think that after the ongoing preliminary discussion in government, we will have at our disposal a number of detailed reports from various ministers. This will provide us with a matter-of-fact approach towards all parts of the convention, including its legal and financial aspects. Subsequent discussion would then be based on more concrete issues, and this would be the basis of the government’s decision about signing the convention.

Why do you think that signing the convention is so important?

It is a political gesture which would show Poland’s intention to fight violence against women. It would also demonstrate solidarity with other countries in fulfilling stan-

dards in this area. Signatory countries would later have to report to the Council of Europe about how the convention is being implemented, and in so doing would share their experiences and motivate one another to continue to act in the spirit of the convention.

Another aspect is that signing the convention would help us carry out activities to protect victims of violence. I want to underline though that many such activities are already ongoing, and even if we don’t sign the convention, we would still carry on with them.

But from my perspective and from the perspective of my office, I am convinced that it would be good to sign the convention because it would strengthen our policies for combating domestic violence and ensure protection for its victims, who are usually women. We lack a gender perspective in government policy for combating domestic violence. We need such a perspective to successfully prevent violence against women, and the convention would be very helpful in this cause. ●

www.wbj.pl

9

10

LAW

www.wbj.pl

AUGUST 20 – SEPTEMBER 2, 2012

Legal Forum

National Court Register available at the click of a mouse Pawe∏ Sterna Attorney at law Everyone who does business in Poland understands the importance of the country’s various registers, including the National Court Register, in which legal entities such as companies, foundations and associations are registered.

The task of the National Court Register is to provide universal access to information regarding the legal status of a registered entity, the most important elements of its financial situation and its representation rules. The National Court Register allows for members of the public to obtain information about each business, which is obliged to be entered into the National Court Register in the form of an excerpt, extract, or certificate.

Technology enters into registers Until July this year, it was necessary to visit an office operating at selected district courts throughout the country in order to obtain an excerpt from the register. Now it is much easier, thanks to new regulations and the development of

the National Court Register’s electronic network. It is now possible to generate and print all documents which, in terms of both content and legal effect, correspond to the “traditional” documents – all free of charge on the internet.

It should be emphasized that the possibility to download and print information corresponding to the current excerpts can make doing business significantly easier. Such a self-printed document can be used in dealing with other entrepreneurs, courts and offices whenever the current excerpt from the National Court Register is needed.

There are plenty of situations when having a current excerpt is a must. For example, it is required in every proceeding before the court and other authorities, as well as in every public procurement procedure (tender). Access to the National Court Register via the internet is also useful when you need to get basic information about a potential business partner.

Step-by-step instruction To find information about the entity you are interested in, you should visit the website of the Ministry of Justice (ems.ms.gov.pl) and click on “Wyszukaj Podmiot” (“Find Entity”). You can search for entities by entering various criteria, such as the National Court Register number or tax identification number (NIP), statistical record-keeping number (REGON) or data such as name, voivodship (województwo), county (powiat), etc. All of the data can be obtained by clicking on “Pobierz wydruk” (“Download printout”). This produces all the information corresponding to the current excerpt from the selected register.

Legal force Downloaded printouts have legal force identical to paper documents issued by National Court Register offices, provided they have been produced with verification enabled.

Such verification is possible because each printout has a unique identification number, and

after entering it in the appropriate box on the website the particular printout is verified.

The printout contains: (i) the Ministry of Justice web address, (ii) a graphic form compatible with Ministry of Justice regulations and (iii) an identification number. These features make the printout an official document, although there is no official National Court Register seal on them.

In summary, thanks to new regulations, downloaded printouts are equal in rank with the documents issued on paper by the appropriate offices.

E-mail disclosure It is also worth mentioning that it is now possible to disclose the website address and e-mail address in the register. Disclosure of these addresses – enabling fast contact with a particular entity – will be made only at the request of the given entity. Disclosing such data in the register seems desirable, as it is common practice in business to maintain contacts with the authorities or business

partners via e-mail. Such a possibility will undoubtedly improve business communication.

Changes will spread to other registers It is worth noting that the Polish government is already working on a similar amendments to the Act on the Land and Mortgage Register (Ksi´gi Wieczyste).

The legislation should enable easier and faster access to the public land register via the internet. Today it is possible only to view the land and mortgage register on the web, but thanks to new regulations it will be easy to obtain documents like excerpts and extracts. It will be possible to print downloaded documents that will have legal force equal to official documents issued by offices of the Land and Mortgage Register.

However, users will have to pay a fee in order to generate and download the information from the Land and Mortgage Register. It is expected that these electronic excerpts will be available from January 1, 2014. ●

Legal Forum is a paid-for module which gives law firms in Poland an opportunity to discuss and inform readers about important developments in the market.

The content is created in consultation with Warsaw Business Journal's editorial staff.

Legal News Contact: Miros∏aw Stefanik ms@pnplaw.pl

Fewer burdens for newly registered businesses

Company administration in the event of ‘defective’ management

On August 14, the government accepted a draft act concerning changes to the Labor Code, as well as several other acts. The draft will soon be presented to parliament for discussion. The purpose of the changes is to shorten the time newly registered firms need to wait before they can commence business activities, as well as to limit several requirements that have hitherto burdened employers.

Among other things the draft act stipulates that the amount of time it takes to issue a new business with a confirmation that its NIP (Tax Identification Number) has been issued, be reduced from 14 days to three days. Moreover, employers are to be released from the obligation of informing the National Labor Inspectorate and National Sanitary Inspectorate about the place, type and scope of their business activities.

According to the World Bank this means that the number of procedures businesses need to complete in order to register a business entity will be decreased by a third (2 out of 6 procedures will be eliminated). The new regulations are to become binding 14 days from the date of their publication in the Journal of Laws.

In accordance with a recent ordinance of the Supreme Court (III CZP 40/12), when a company is run by a management board whose membership is smaller than is required under the articles of association or the company’s statutes, a court (art. 42 § 1 of the civil code) may appoint an administrator for that entity to carry out its activities and represent it externally.

When a management board is too small, it is termed “defective,” meaning it may not adopt effective resolutions on the company’s behalf.

An administrator for such a company is appointed by a registry court, located in the district in which the company is, or was last, registered.

DAILY EXECUTIVE DIGEST

Mortgages established by bankrupt entities In accordance with a resolution of the Supreme Court of August 8, 2012 (III CZP 42/12), a bankrupt entity who has granted a warranty and secured performance of that obligation by establishing a mortgage within a year prior to the date it filed for bankruptcy, is a personal debtor to the secured creditor within the meaning of art. 130 item 1 of the act of February 28, 2003 – Bankruptcy and Reorganization Law. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

Poland A.M. gives you the biggest Polish stories of the day.

Have the most valuable news delivered to your inbox each weekday morning.

S i g n u p f o r a 2 - w e e k f r e e - t r i a l ! w w w. p o l a n d a m . p l G e r m a n v e r s i o n : w w w. p o l e n a m m o r g e n . p l

OPINION & ANALYSIS

AUGUST 20 – SEPTEMBER 2, 2012

www.wbj.pl

11

Polish missile defense plan puts Poland first Micha∏ Baranowski & Jacob Foreman

In

an August 6, 2012 interview in the Polish weekly Wprost, President Bronis∏aw Komorowski stated that Poland is prepared to create its own anti-aircraft and missile defense system as part of a NATO shield. While some saw the statement as a rejection of US President Barack Obama’s proposed missile defense system, others viewed it as a sign of Poland’s weakening military alliance with the United States. Both arguments are misleading.

The missile and air defense system proposed by the Polish president is qualitatively different than the American Missile Defense System (MD),

“Prioritizing missile defense reveals the Polish government’s growing focus on the primacy of territorial defense” scheduled for deployment by 2018.

The proposed Polish system would target short- and medium-range missiles from the near abroad, while the American MD shield would be capable of shooting down long range ballistic missiles originating from rouge states such as Iran. The Polish MD system is to be part of the NATO MD shield and would be an expansion of Poland’s contribution to the Alliance, rather than creating a competing system, as some suggest.

American “boots on the ground” The history of the American MD shield in Poland is long, complicated, and full of emotions. After years of difficult negotiations between Poland and the US, and amid adamant objections from Russia, Poland accepted the Bush administration’s MD program on August 20, 2008.

Earlier that year, the Polish government vigorously debated whether to accept the proposal of an outgoing Bush administration, which promised to complete the MD base in Poland by 2011, or whether to wait for the next US president to be elected the following November.

Even before the US presidential elections, the Polish side made robust efforts to understand the Democratic position on the MD system, should Mr Obama become president. The final factor that convinced the Polish government to go ahead with the Bush MD program was the August 2008 Russia-Georgia war, which proved that state-on-state violence in Europe was still possible. The timing of this decision demonstrated the rationale for American MD for Poland.

The value of the American shield for Poland is not only its capacity to shoot down ballistic missiles, but also the presence of American “boots on the ground” that would serve as a powerful deterrent for any potential aggressor. The Polish government’s decision in the fall of 2008 was a gamble. By accepting the American project, Poland immediately paid the

political price of strong Russian opposition without yet having an American base installed, and the US presidential elections further contributed to this uncertainty.

After Barack Obama’s victory in the 2008 election, his administration initiated a review of several Bush administration decisions, including the MD program. Consequently, on September 17, 2009, President Obama called Polish Prime Minister Tusk to inform him that plans to implement the MD system would be modified. The administration proposed a new, reformulated project that would entail smaller, mobile SM3 interceptors to be stationed in Poland by 2018.

This sudden shift in the US policy was badly received in Poland. First, the change in the program came as an announcement without prior consultations. Second, the Obama MD system plans for the Polish based installation to be completed by 2018, much later than the Bush plan, which adds uncertainty to the entire project. And third, the call from President Obama came on the anniversary of Russia’s attack on Poland at the start of World War II, adding unfortunate and negative symbolism to the announcement.

The abrupt shift in American policy has raised doubts of the US commitment to Poland.

Complimentary, not competing President Komorowski’s comments that the “mistake was that by accepting the American offer of a shield we

failed to take into account the political risk associated with a change of president. We paid a high political price,” referred directly to the gamble Poland took in 2008 near the change in the US administration.

Unfortunately, his statement has been largely misinterpreted. Depicting Poland as “betrayed and abandoned,” as The Telegraph did, and characterizing the deployment of American MD in Poland as a mistake paints an inaccurate picture. The following day the head of the Polish National Security Bureau, Stanis∏aw Koziej, reasserted that President Komorowski sees the American MD project as a “necessary and important part of a NATO wide missile defense system.”

He also stated that prioritizing anti-aircraft and missile defense is part of a new strategic direction agreed by the Minister of Defense and the top military commander.

Last year, they reflected an understanding among the Polish military staff that to be effective in contemporary conflicts, the army needs a wellfunctioning short- and mid-range MD shield. After all, Russia has already threatened to deploy its Iskanders missiles in the Kaliningrad oblast (which borders Poland) later this year.

Mr Komorowski’s call for the creation of Polish missile defense is not about Polish-American relations, but about the future of Poland’s security.

Poland needs stronger anti-aircraft and short- and medium-range missile defenses independent of any pro-

posed American MD system. The two systems are complimentary, not competing.

The announcement reflects an increasing confidence and affluence of a country that is increasingly able to rely on its own strength for its security. Furthermore, prioritizing missile defense reveals the Polish government’s growing focus on the primacy of territorial defense over expeditionary capabilities.

The Polish MD system is to be financed from the savings of winding down the war in Afghanistan, and from the growth of military budget over the coming years related to Poland’s economic growth (Polish law mandates that 1.95 percent of GDP is spent on defense). According to initial estimates, it would be a pricy program, costing z∏.8 billion to z∏.15 billion over the next 10 years.

Such costs would lower Poland’s appetite and ability to take part in expensive expeditionary missions.

But with its increased focus on its own territory, don’t expect Poland to eagerly step up, as it did in Iraq and Afghanistan, if another hot spot boils over somewhere else in the world. ● Micha∏ Baranowski is a senior program officer with the German Marshall Fund’s Foreign Policy & Civil Society program and Jacob Foreman is an intern at the German Marshall Fund‘s Warsaw Office.

Copyright: German Marshall Fund of the United States. gmfus.org

Editorials are the opinions of WBJ’s editorial board. Other opinions are those of the authors alone. Comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

PUBLISHER VALKEA MEDIA SA CO-MANAGING EDITOR

GARETH PRICE (GPRICE@WBJ.PL)

REAL ESTATE EDITOR

ADAM ZDRODOWSKI (AZDRODOWSKI@WBJ.PL) SPORTS & LIFESTYLE EDITOR

CO-MANAGING EDITOR

ALICE TRUDELLE (ATRUDELLE@WBJ.PL)

REMI ADEKOYA (RADEKOYA@WBJ.PL)

ADAM NARCZEWSKI ANDREW NAWROCKI

DAVID INGHAM (DINGHAM@WBJ.PL)

INTERN

JOURNALIST

PRODUCTION MANAGER

IZABELA DEPCZYK POLITICS EDITOR

COLUMNISTS

CONTRIBUTORS

E. BLAKE BERRY EWA BONIECKA

ANTHONY ADAMS

PIOTR WYSKOK GRAPHIC DESIGNER

¸UKASZ MAZUREK

EDITOR-IN-CHIEF ANDREW KURETH (AKURETH@WBJ.PL)

MANAGING DIRECTOR MONIKA STAWICKA

MARKETING &SALES

EWA BROGOSZ-KORYCKA (EBROGOSZ-KORYCKA@WBJ.PL)

AGNIESZKA BREJWO

KAROL KOSIOREK (KKOSIOREK@WBJ.PL)

MARKETING &SALES DIRECTOR

(ABREJWO@WBJ.PL)

PR & MARKETING SPECIALIST

MAGDALENA KARPI¡SKA (MKARPINSKA@WBJ.PL)

NATALIA ROGACZEWSKA (NROGACZEWSKA@WBJ.PL) SUBSCRIPTIONS MANAGER

AGNIESZKA KUCZY¡SKA (AKUCZYNSKA@WBJ.PL)

AGNIESZKA MICHALIK (AMICHALIK@VALKEA.COM)

PRINT & DISTRIBUTION COORDINATOR

KRZYSZTOF WILI¡SKI (DYSTRYBUCJA@VALKEA.COM)

BOOK OF LISTS SPECIALIST

JOANNA RASZKA (JRASZKA@VALKEA.COM)

SPECIAL REPORT

www.wbj.pl

Prudential to re-enter Poland UK-based multinational insurance and financial services company Prudential is set to launch a business in Poland as it looks to expand outside its core markets of the UK, US and east Asia, reported The Financial Times. The insurer was already operating in the country before WWII, but its assets were seized by Nazi occupying authorities following the invasion of Poland in 1939. Now it wants to come back to start lifeinsurance operations, and is awaiting the goahead from Polish regulators.

Brokerages face system change Representatives of Polish brokerage houses are concerned that the implementation of the new Universal Trading Platform (UTP) transaction system at the Warsaw Stock Exchange will significantly increase their operating costs. The new system, which should launch on November 2, is already giving brokers a lot of extra work, since they have to change their IT systems. According to analysts, changing to the UTP system will eventually lead to an increase in sales on the WSE.

EU banking union plan due in September The European Union will reveal details of its plans for a banking union around September 11, Bloomberg reported, citing an unnamed European Union official.

The plan will reportedly include a proposal to give the European Central Bank centralized oversight of the euro area. The plans also will lay out the role of the European Banking Authority as the banking union develops and how the EBA will work with the 10 EU nations that don’t use the euro, the news service said.

According to the official, the ECB prefers an option under which it would be the sole representative of the 17 euro-zone countries at EBA meetings. ●

AUGUST 20 – SEPTEMBER 2, 2012

Shadow banking

Parabanks: a financial blind spot Alice Trudelle The Amber Gold debacle has put the spotlight on an unregulated part of the financial market that the Polish government has failed to monitor The spectacular demise of lender Amber Gold, which announced on August 13 that it was undergoing liquidation, has put Poland’s “parabanks” at the center of media and public attention.

These firms, which conduct credit and investment activities outside the regular banking system, have grown the world over in recent years.

Parabanks have thrived on the effects of the global financial crisis, which have pushed banks to tighten their consumer lending policies, thus making it difficult for many to get new loans. Lower revenues and job losses have also made it difficult for an increasing number of people to continue paying installments on their existing bank loans.

Although they operate outside of the Polish Financial Supervision Authority’s (KNF) regulatory control, for the most part, Polish parabanks

SHUTTERSTOCK

12

Regulators and analysts say that more education, not more legislation, is needed to protect Polas against the potential risks of choosing parabanks over regular banks for managing their money conduct their operations legally. This means that funds deposited in such institutions are not subject to the guarantee of the Bank Guarantee Fund; the risk is borne entirely by clients.

From the KNF’s point of

view, problems arise when parabanks start offering cash deposits, a criminal activity in Poland for any other entity than banks and credit unions.

However, the legitimacy of the shadow banking sector’s business model, which mostly

involves fast-cash loans and sometimes high-return, noncash investments such as precious-metals derivatives, is not in question.

The overall weight of the Polish shadow banking system is still relatively small. But it

What’s legal, what’s not In the wake of the Amber Gold scandal, some voices have argued that the parabanks sector should be better regulated.

But both analysts and regulators seem to think that’s not the way to go.

“There are two types of parabanks: First, there are firms that offer loans financed from their own resources, which is legal. Then there are firms like Amber Gold, that take cash deposits.

That’s not legal, and when we hear about such cases we inform the public prosecutor’s office,” explained ¸ukasz Dajnowicz, spokesperson at the KNF. “There are talks about regulating the second kind. It doesn’t make any sense.

It’s like regulating drug dealers. The state should not allow it. It’s a question of prosecution,” he added.

Mr Dajnowicz says the KNF informed the prosecutor’s office and issued a public warning against Amber Gold as early as the end of 2009. “Why Amber Gold was allowed to operate for so long is a good question, but one for the prosecutor. It took only a few weeks between the moment when we received information from the market about Amber Gold and when we expressed our concern. There is

no need for further regulation, and I think the prosecutor’s office has all the necessary tools to do its job,” he said.

The KNF’s public warning list now names 16 institutions, including Amber Gold.

“[Regulating parabanks that illegally take cash deposits] doesn’t make any sense. It’s like regulating drug dealers.”

“At the end of the day there will always be new business models ready to exploit gaps in the law. That happens in developed countries, as the Madoff example makes clear,” said Micha∏ Dubno, head of the financial institutions sector at firm Deloitte. “But it’s the customer who should decide if they invest money in high or low risk ventures, not the regulator.”

One aspect of shadow banking that has attracted a lot of attention is the interest rates and the return on investment they are offering, both much higher than that of banks.

A firm offering higher return on investment than a bank is not necessarily the sign that something wrong is afoot, according to Marcin Materna, head of Millennium Dom Maklerski’s analysis department.

“Some firms can afford it. Bonds from debt collecting firm Kruk, for example, reach returns of around 9 percent. The yields on Polkomtel bonds was 12.5 percent, in euro.

Mr Solorz-˚ak could live with that. [Polish billionaire Zygmunt Solorz-˚ak acquired ownership of mobile operator Polkomtel in November 2010 for z∏.15.1 billion] What people sometimes fail to realize is that higher interest means higher risk.”

The investment segment of parabanks is believed to be much smaller and less popular than the loans segment. And in the loans segment, the risk for customers is much lower. “Because the amount of money borrowed is generally small, the monthly difference with a bank loan is maybe z∏.20. In the end customers pay a little more in terms of z∏otys, while the firm takes a huge risk. For firms like Provident, a well-established fast-loan company, non-repayed loans in their portfolio reach much higher proportions than in regular banks,” explained Mr Materna. ●

will be difficult to monitor its growth if the government continues to fail to collect the relevant information. And while regulators and analysts seem adverse to more regulation, one thing is clear: too many Poles do not understand that the growing number of financial products on offer also come with various levels of risk.

While it seems reasonable to let the individuals themselves rather than regulators decide where they should invest their money, years of communist rule mean that a large portion of older Poles have a knowledge of the financial market that’s much lower than their Western European peers, experts say.

So Poland should be especially keen on monitoring parabanks and educating its citizens. It has so far failed on both accounts.

Growing under the radar It is nothing new for businesses to loan small sums at high interest to those who need money fast but are short on options. In Poland, parabanks appeared with the economic transformation after 1989, when the consumer banking segment was still poorly developed, and have since kept growing as demand for loans increased.

Particularly in the fast-loan segment, which is more developed than the investment side, parabanks target older people, who are looking for small loans, and for whom going to the bank is either difficult or intimidating. “With parabanks, they can just call and a representative will visit them at home,” explains Marcin Materna, head of Millennium Dom Maklerski’s analysis department.

Another client base for parabanks are people with a bad credit history. “Many of these firms advertise directly that they don’t check clients’ credit history. Instead they treat all their customers as high-risk clients and charge very high interest,” explained Micha∏ Dubno, strategy director in the financial institutions sector at firm Deloitte.

Indeed, since 2006 the National Bank of Poland has set a maximum interest rate at which banks can grant con-

AUGUST 20 – SEPTEMBER 2, 2012

Shadow banking The NBP describes the shadow banking system as the entities operating outside the regular banking system engaged in one of the following activities: • Accepting funding with deposit-like characteristics • Performing maturity and/or liquidity transformation • Undergoing credit risk transfer • Using direct or indirect financial leverage The specific nature of the Polish financial system shows that some areas defined as shadow banking by the European Commission are not developed in Poland, such as securities lending and securitization. However, some entities can be singled out that, from the economic perspective, offer the same or similar services to those offered by banks. They are firms extending loans with their own funds, and entities accepting funds and extending loans. ● sumer loans. This rate hovers around 25 percent (it’s re-evaluated by the central bank each month). While it was implemented to protect borrowers from excessive interest charges, in practice it often means that granting loan to “risky” clients simply doesn’t make business sense for banks, explained Mr Dubno.

The NBP notes that since 2010, the shadow banking sector has seen a renewed push.

That year the KNF issued its Recommendation T, which tightened the rules for creditworthiness appraisal of individuals and thereby limited access to consumer and mortgage loans provided by banks.

As the availability of bank loans dropped, clients moved

to lending firms operating outside of the KNF-regulated market.

The global slowdown and the European financial crisis have also meant that more customers face problems with repaying existing bank loans and take out loans from parabanks to cover those payments, explained Mr Dubno.

The international Financial Stability Board (FSB) estimates that the global shadow banking system was worth around €46 trillion in 2010, up from €21 trillion in 2002. This represents 25 to 30 percent of the total financial system, and half the size of bank assets.

In Europe, that proportion tends to be lower. For example, the FSB estimates para-

SPECIAL REPORT banks’ assets make up 13 percent of the UK’s financial system, and 5 percent in Germany, compared to an estimated 35 to 40 percent in the United States. But while the proportion has been falling elsewhere, including in the US, Europe has seen its shadow banking sector grow. This prompted the European Commission to release a green paper on shadow banking in March 2012, which it is now using to look into potential new legislation.

No official estimates are available for Poland, because no institution is tasked with monitoring these firms. Neither the KNF, the National Bank of Poland nor the Ministry of Finance was able to assess the size of the sector, when asked by WBJ. No regis-

it is a good time to raise this issue, and I am very happy it is getting attention in the media.”

Education needed The 50,000 clients to whom Amber Gold still owed about $24 million as WBJ went to press might beg to differ, but on the whole, relatively few Poles have made risky investments in parabanks so far. On the other hand, there does not seem to be much of a push to prevent the larger number of individuals who are contracting low-value, short-term, high interest-bearing loans from parabanks from doing so.

But there is an obvious need to educate the Polish public so that more people make enlightened choices when it comes to managing

“The education of customers is the key to solving these problems. So far the government has not done very well” ter of such firms exists.

Analysts from Deloitte have estimated that the value of Polish financial institutions that are not subject to KNF supervision is around z∏.2 billion.

“That’s still very small; it represents about 0.4 percent of the financial sector’s total assets,” said Mr Dubno. “But

their money. The NBP admits that the quality of consumer loans saw strong deterioration between 2009 and 2011, and estimates that the percentage of defaulted fast loans in total loans is now “very high.” This might not pose a threat to the stability of the Polish banking system, but it may have serious social consequences, the NBP

www.wbj.pl

said in a report on the matter.

“The education of customers in terms of financial products is crucial. It’s the key to solving these problems. So far the government has not done very well in this respect,” said Mr Dubno. “Surveys show that Poles express the same level of confidence in banks, parabanks and credit unions.

It means they don’t know what the difference is.”

And while privately-owned banks do not bear the same responsibilities as the government regarding Poles’ financial education, they can also play an important role in that respect. Moreover, doing so should make business sense for them. “I am extremely surprised that banks haven’t invested in a constant campaign of information. If they spend a lot of money to ensure they are safe, they should advertise it,” said Mr Dubno.

It seems the Amber Gold scandal has at least prompted the government to take some action. The Ministry of Finance said in an emailed statement that an analysis of the parabanks sector was in the works. The KNF, NBP, Finance Ministry and police are all set to participate in a public awareness campaign targeting parabank’s potential clients. However, neither the NBP not the KNF could provide details as WBJ went to press. ●

13

Z∏oty appreciation ‘illogical’ While in an economic slowdown there is usually risk-aversion towards emerging markets, at the beginning of August, the Polish currency rose to its strongest level in a year.

“There is no logical justification for the z∏oty’s appreciation just as there is no justification for the fact that other emerging markets like Mexico, South Africa and Turkey have also seen huge foreign capital inflows and an appreciation of their currency,” said Przemys∏aw Kwiecieƒ, chief economist at X-Trade Brokers.

Rough H1 for brokerages BRE Bank, which runs the largest number of brokerage accounts in Poland, made a gross profit of z∏.10.1 million in H1 2012, compared to z∏.16.6 million a year ago.

Profits of CDM Pekao reached z∏.12.8 million, some 50% less than in H1 2011. Due to the current financial turmoil, this trend is unlikely to change soon, analysts say. ●

Warsaw’s Galeria Mokotów will see a 5,000-sqm expansion

What are the latest trends in residential design and innovation in Poland?

16

18

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

Developer Bouygues Immobilier Polska has launched construction on its La Cascade multifamily residential project in Warsaw.

Construction company PBM Po∏udnie is the general contractor of the investment. Located on ul. Bogus∏awskiego in the capital’s Bielany district and scheduled to be completed in 2013, the 13-storey La Cascade project will comprise 109 apartments whose prices start at z∏.6,150 per sqm.

Robyg gets City Apartments permit WSE-listed developer Robyg has obtained a building permit for the fourth phase of its City Apartments multifamily residential project in Warsaw. Construction on this phase of the investment, which will deliver 215 apartments, is scheduled to finish in March 2014. The City Apartments development is located on ul. Rydygiera in the capital’s ˚oliborz district. It has been under construction since 2007 and will comprise a total of 1,300 housing units when completed. ●

In this issue WFC sale . . . . . . . . . . . . . . . . . . .15 Poczta Polska land . . . . . . . . . .15 Galeria Mokotów extension . .16 Dekada Kraków . . . . . . . . . . . . .16 Atrium Felicity . . . . . . . . . . . . . .16 Kungslegen properties . . . . . . .16 Residential design & innovation . . . . . . . . . . . . . . . . . .18

Office

Warsaw Financial Center building sold for €210 million

Allianz Real Estate and Tristan Capital Partners acquire one of Poland’s signature office high-rises

A joint venture of Allianz Real Estate and an investment fund managed by Tristan Capital Partners has aquired Warsaw Financial Center, one of the signature high-rise buildings in Warsaw’s Central Business District, for €210 million.

The sellers were CA Immo and Pramerica Real Estate Investors, each of whom had acquired a 50 percent stake in 2005. Allianz and Curzon Capital Partners III – the Tristan Capital fund – will acquire 87.5 percent and 12.5 percent respectively.

In early August the companies announced that a preliminary agreement had been signed. The transaction is expected to be completed before the end of the year after conditions typical for deals of this type in Poland are fulfilled.

The Warsaw Financial Center was one of the first class-A high-rises in Warsaw when it was completed in 1998. Standing over 144 meters tall with 36 floors, the tower comprises some 50,000 sqm of leasable space, of which 93 percent is office space and 7 percent is retail and storage space. There are also more than 330 parking spots set over six aboveground floors.

The building is about 98 per-

COURTESY OF JONES LANG LASALLE

Bouygues builds La Cascade in Warsaw

AUG 20 – SEP 2, 2012, LI 17/33-34

Warsaw Financial Center is one of Warsaw’s oldest and best-known office high-rises cent leased out to tenants that include law firms, consultancy firms and banks. Cameron McKenna, DLA Piper, General Electric and Google all lease space in the building.

In a statement announcing the deal, Tristan Capital characterized Warsaw Financial Center as “one of the top grade-A office buildings in eastern Europe,” with “excellent visibility and accessibility.”

“Together with Rondo One and Metropolitan, it is one of the top three properties in Poland’s capital,” the company said.

“Just a few weeks after the Platinum Business Park, we’ve now carried out another investment in Warsaw,” said Stefan Brendgen, CEO of Allianz Real Estate Germany, in a statement. “The Warsaw Financial Center is an extraor-

dinarily attractive investment for the Allianz companies.”

He added, “We will continue to invest in Poland under our diversification strategy.”

“WFC is one of the highest-quality office assets in Poland … a market with strong fundamentals that demonstrates consistent investor demand and increasing liquidity,” said Tristan Capital CEO Ric Lewis.

According to Tomasz Trzós∏o, head of capital markets CEE at Jones Lang LaSalle, there was considerable investor interest in the deal. “The consortium of Allianz Real Estate and Tristan Capital Partners presented the most attractive offer in terms of price as well as the possibility of closing the deal swiftly,” he said.

Andrew Kureth

Poczta Polska puts central Warsaw plot up for sale Poland’s public postal service, Poczta Polska, is selling perpetual usufruct rights to a total of 10,533 sqm of undeveloped land located on ul. Chmielna in Warsaw’s Wola district. The tender for the sale of the property, whose bid price is over

z∏.112.5 million, has been scheduled for September 19.

Poczta Polska is touting the land on sale as prime property on which class-A office space can be developed. The plots in question are characterized by good accessibility and neighbor

a number of modern office buildings, reads a statement on the company’s website.

The planned sale is part of Poczta Polska’s process of restructuring its property portfolio. Originally, the seller was planning to build its own new

headquarter offices on the land and even secured a planning decision for a 130-sqm skyscraper with some 40,000 sqm of office space on the site.

In the end, however, Poczta Polska has decided to site its new offices outside the down-

town. The new building will be developed on ul. Domaniewska in Warsaw’s Mokotów.

Until the property is finished, Poczta Polska will be renting space in the Intraco building in the capital’s central district.

Adam Zdrodowski

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

16

www.wbj.pl

LOKALE IMMOBILIA – REAL ESTATE

AUGUST 20 – SEPTEMBER 2, 2012

Retail

Atrium Felicity construction Galeria Mokotów’s 5,000-sqm gets underway in Lublin

extension project launched

Atrium Poland Real Estate Management subsidiary CH Felin has launched construction on the Atrium Felicity shopping center project in Lublin, the capital of Poland’s eastern Lubelskie voivodship.

Construction company Strabag has been appointed the general contractor of the development.

“The project is already commercialized in 55 per-

cent,” Katarzyna Cyz, CEO of Atrium Poland Real Estate Management, said in a statement. “We have signed lease agreements with an over 20,000-sqm hypermarket and all key tenants and are finalizing negotiations with a DIY market operator.”

The Atrium Felicity mall will be a regional shopping center and the largest scheme of its kind in Lublin. The

investment will deliver 74,000 sqm of leasable space and will comprise 135 stores and points of service.

Atrium European Real Estate Management owns approximately 374,000 sqm of retail space in Poland. Its 20 shopping centers in the country include Warsaw’s Atrium Reduta, Promenada and Atrium Targówek malls.

Adam Zdrodowski

COURTESY OF HILL & KNOWLTON

Atrium Felicity

The extension process is valued at nearly z∏.55 million

The new space will allow for more restaurants and rest areas Unibail Rodamco, the owner of the Galeria Mokotów shopping center in Warsaw, has launched an almost z∏.55 million extension project that will add nearly 5,000 sqm of space to the 62,300-sqm mall

by May of next year.

Following the extension

scheme, which was designed by the Sud Architectes and SMZ Architekci studios, a new Lshaped structure with 3,500 sqm of space will be added to the existing building, which is located on ul. Wo∏oska in the capital’s Mokotów district.

In addition, the restaurant area located on the second level of Galeria Mokotów will grow by 1,500 sqm. The whole investment is meant to deliver more space for

restaurant facilities and areas to relax in within the mall.

Developed by Globe Trade Centre and opened for business in 2000, Galeria Mokotów has already seen three expansions, one in 2002 and two in 2006. The shopping center, which comprises 260 stores and over 2,400 parking spaces, was fully acquired by Unibail Rodamco in the summer of 2011.

Adam Zdrodowski

COURTESY OF MEDIADEM CONSULTING

Dekada Kraków to open in September Finishing work is underway at the construction site of the Dekada Kraków retail project in Kraków, with the 3,400-sqm convenience shopping gallery on the city’s ul. Stoja∏owskiego scheduled to open for business on September 12.

The scheme, which will be the sixth facility of this brand, is being built by Dekada Realty and commercialized by BOIG Property Consulting. Its main tenants will include an Alma delicatessen and a Rossmann health and beauty store.

Operating Dekada-brand facilities are located in Sieradz, Skierniewice, MyÊlenice, ˚yrardów and Olsztyn. Facilities in Malbork, Rypin and Nowy Targ will be opened in the near future.

AZ

Property-related stocks Security

Closing price on Aug 16

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

54.00

0.00

53.00

88.35

-26.03

25,530,098

1,378.63

CELTIC

11.92

55.82

7.02

22.70

-29.47

34,231,466

408.04

DOMDEV

24.37

-2.52

23.50

42.80

-22.19

24,670,397

601.22

ECHO

3.61

-1.10

3.05

4.40

1.40

420,000,000

1,516.20

ELBUDOWA

95.00

1.50

87.00

126.70

-21.81

4,747,608

451.02

ENERGOPLD

0.22

-21.43

0.21

3.45

-92.67

70,972,001

15.61

ERBUD

12.62

-4.97

12.51

23.30

-28.90

12,644,169

159.57

GANT

4.80

0.00

4.80

10.59

-45.76

20,120,000

96.58

GTC

6.07

0.00

5.20

12.49

-53.91

219,372,990

1,331.59

HBPOLSKA

0.06

-14.29

0.06

1.43

-95.12

210,558,445

12.63

JWCONSTR

3.97

-0.75

3.86

9.80

-63.58

54,073,280

214.67

LCCORP

1.15

0.00

0.85

1.48

8.49

447,558,311

514.69

MARVIPOL

10.69

2.79

6.20

11.00

48.06

36,923,400

394.71

MIRBUD

1.00

0.00

0.98

2.83

-63.10

75,000,000

75.00

MOSTALWAR

13.00

-7.67

11.30

25.88

-49.02

20,000,000

260.00

MOSTALZAB

0.84

-7.69

0.84

1.80

-51.16

149,130,538

125.27

ORCOGROUP

8.84

10.09

8.00

28.25

-65.48

35,415,406

313.07

PBG

6.71

-0.59

5.30

96.35

-93.38

14,295,000

95.92

PLAZACNTR

2.07

0.98

1.80

2.99

-32.79

297,174,515

615.15

POLAQUA

3.80

0.26

3.60

15.30

-74.67

27,500,100

104.50

POLIMEXMS

0.65

-2.99

0.61

2.05

-70.05

521,154,076

338.75

POLNORD

12.88

0.94

10.49

19.85

-15.37

23,798,439

306.52

RANKPROGR

7.91

1.15

7.50

16.97

-24.59

37,145,050

293.82

ROBYG

1.13

-2.59

1.04

1.75

-15.04

257,935,500

291.47

RONSON

0.74

4.23

0.69

1.15

-36.21

272,360,000

201.55

TRAKCJA

0.69

-1.43

0.65

1.91

-65.15

232,105,480

160.15

ULMA

42.99

7.39

38.88

74.80

-27.75

5,255,632

225.94

UNIBEP

4.03

7.47

3.60

6.61

-14.26

34,021,684

137.11

WARIMPEX

3.00

3.45

2.90

6.20

-54.48

54,000,000

162.00

ZUE

6.20

2.99

5.07

10.00

-26.10

22,000,000

136.40

Maybe social

media

is just a fad.

But these companies don’t think so. *

Combining the most in-depth social media knowledge with the sophisticated insights of consumer behavior

www.valkea-attention.com *Attention USA clients

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

SEGRO completes two facilities

Design and innovation COURTESY OF PARTNER OF PROMOTION

SEGRO has completed a 12,000-sqm class-A built-to-suit warehouse facility for FlexLink that is part of the second phase of its Tulipan Park Poznaƒ logistics park in Western Poland. SEGRO also announced the completion of a 7,600sqm cross-dock facility at the SEGRO Business Park ¸ódê investment in central Poland which was developed as part of a pre-let agreement. The park is expected to offer nearly 55,000 sqm of space when completed.

Panattoni Park Mys∏owice expansion Industrial space developer Panattoni Europe is expanding its Panattoni Park Mys∏owice project in Silesia, one of the largest distribution centers in Poland, with a seventh facility that will deliver 28,100 sqm of industrial space. The building is dedicated to three tenants – a logistics company that will take up 9,500 sqm at the scheme, Manuli Hydraulics, which will occupy 9,300 sqm and automotive components manufacturer Valeo, which has leased 9,200 sqm. ●

AUGUST 20 – SEPTEMBER 2, 2012

Residential refinement High-tech and greenbuilding solutions are gaining ground in Poland’s residential sector With Poland’s housing market suffering from oversupply and buyers now having plenty of homes to choose from, architecture is becoming an increasingly important factor in deciding how successful a given project is.

No wonder then that the designs of new residential buildings in the Polish market, and in particular in its upmarket and luxury segments, have been increasingly characterized by modern solutions and technologies devised to provide the home owner with the best possible living conditions.

Modern upper-market apartments have to be designed in such a way that it is easy for future owners to arrange the living space, as well as to change the space arrangement once the property has been moved into, said Jaros∏aw J´drzyƒski, a property market analyst at RynekPierwotny.com.

The architectural concept of the whole estate also plays a major role. High-quality schemes today feature buildings arranged in a way that ensures an optimal, or at least sufficient, view from every window and proper daylight penetration into every room, Mr J´drzyƒski added.

The best projects often include green and water areas, Mr J´drzyƒski said. One of the most interesting recent trends is

COURTESY OF REAL MANAGEMENT

18

Rezydencje Pa∏acowa homes can be managed by means of Apple-produced devices the development of on-roof terraces with green and recreation areas that are accessible to all inhabitants of the given estate and help integrate the local community.

Intelligent homes According to Mr J´drzyƒski, the possibility of installing the latest high-tech solutions that provide for the maximum amount of comfort, security and entertainment in the property is the feature which currently defines new upmarket apartments.

The under-construction Rezydencje Pa∏acowa complex of single-family houses in Warsaw is touted by its investors, Real Management and Capital Park Group, as the first project of its kind in Poland in which homes can be managed by means of Apple-produced devices.

Located in the capital’s Wilanów district, the whole estate will offer 48 luxury villas,

the first 24 of which are scheduled to be completed in the first quarter of 2013. The investors claim buyer interest in the homes is large despite their relatively high prices of between z∏.2.5 million and z∏.3 million.

High-tech solutions in Rezydencje Pa∏acowa will enable owners to remotely control elements including lights and window curtains, as well as home appliances and consumer electronics. It will also provide for remote monitoring of their property.

“More and more clients are interested in intelligent solutions for homes,” said Arkadiusz P∏ociƒski, vice president of Real Management’s management board. He added that many buyers decide on the full option, while some decide on installations which cover selected home elements only.

“A home that can take care of itself used to be only a dream; today it is a real possibility. Buyers who realize how

convenient intelligent solutions are, are increasingly asking about them and, as we know, demand gives rise to supply,” Mr P∏ociƒski said.

Bartosz Jankowski, primary market manager at Home Broker, a real estate brokerage and advisory, said, however, that developers still rarely promote high-tech solutions and that instead they are usually installed by the buyers themselves when they are finishing their homes.

Green building Also, energy-efficient solutions, including the use of materials with higher insulation performance, have become standard in homes from the luxury and upmarket segments and are now becoming commonplace in mid-market units as well, RynekPierwotny.com’s J´drzyƒski said.

According to Home Broker data, the employment of costlier solutions such as the installation of a heat pump is still rel-

atively rare as the resulting price increase would likely not be acceptable for the potential buyer. Such solutions are more often used in houses than in apartment buildings.

Skanska Residential Development Poland, a company which started its operations last year and has recently launched construction on its first project in Warsaw’s Praga Po∏udnie district, plans to be a leader in the delivery of green homes in the Polish market.

Sustainable construction has become standard in Scandinavian and Western European countries and the growing significance of such solutions has been visible in Poland as well, noted Micha∏ Âwiderski, sales and marketing manager at the developer.

“An increasing number of apartment buyers are paying attention to not only the home price per sqm, but also to the monthly costs related to electricity, water and heating bills,” Mr Âwiderski said.

Buildings in Skanska Residential Development Poland’s Park Ostrobramska investment in Warsaw, which will deliver a total of 1,600 apartments, will feature facades and windows with increased thermal insulation performance, he added.

Energy-efficient LED lighting with movement detectors will be installed in the common spaces of the development and the future owners of the Skanska Residential Development Poland apartments will be advised on how to finish and furnish their homes in an effiAdam Zdrodowski cient way.

THE LIST

AUGUST 20 – SEPTEMBER 2, 2012

www.wbj.pl

19

Construction & Real Estate

Exhibition and Convention Venues Ranked by total gross indoor exhibition space

Company name Address Tel./Fax E-mail Web page

1

Mi´dzynarodowe Targi Poznaƒskie Sp. z o.o. ul. G∏ogowska 14, 60-734 Poznaƒ 61 869-2000/61 866-5827 info@mtp.com.pl www.mtp.pl

107,654

30,622 9,006

1,200 -

68

65 3 -

1,446 22 31

6 1 5

1,980

1921

Andrzej Byrt

2

Targi Kielce SA ul. Zak∏adowa 1, 25-672 Kielce 41 365-1222/41 345-6261 biuro@targikielce.pl www.targikielce.pl

35,000

65,000 916

2,000 -

55

54 1 -

289 2 114

1 2 26

475

1992

Andrzej Mochoƒ

3

Mi´dzynarodowe Targi Gdaƒskie SA ul. Beniowskiego 5, 80-382 Gdaƒsk 58 552-3600/58 552-2243 sekretariat@mtgsa.com.pl www.mtgsa.com.pl

14,595

3,575 260

500 -

23

12 11 -

2 1 5

-

8

1997/2007

Andrzej Kasprzak

4

Warszawskie Centrum EXPO XXI Sp. z o.o. ul. Pràdzyƒskiego 12/14, 01-222 Warszawa 22 256-7130/22 256-7111 sales@expoxxi.pl www.expo21.pl

13,500

2,200 950

1,500 275

43

38 5

312 15 44

1 25

2

2001

˚aneta Berus

5

Mi´dzynarodowe Targi Polska Sp. z o.o. ul. Makowska 95, 04-307 Warszawa 22 529-3950/22 529-3930 info@mtpolska.com.pl www.halamtpolska.pl

10,000

4,000 250

1,554 417

22

21 1

31 5 10

2

195

2008

Bartosz Sosnowski

6

Demuth Alfa Sp. z o.o. - Ostróda Sp.k.-a. ul. Grunwaldzka 55, 14-100 Ostróda 89 647-7800/89 647-7810 bk@demuth-group.com www.ostroda-mtm.pl

9,250

-

850 -

2

2 -

-

-

-

WND

Krzysztof Raczkowski

7

Targi w Krakowie Sp. z o.o. ul. Centralne 41A, 31-586 Kraków 12 644-5932/12 644-6141 biuro@targi.krakow.pl www.targi.krakow.pl

6,000

7,000 WND

350 WND

17

10 6 1

27 4 2

3 1 3

55

WND

Gra˝yna Grabowska

8

Mi´dzynarodowe Targi Katowickie Sp. z o.o. u. Bytkowska 1B, 40-955 Katowice 32 789-9100/32 254-0227 info@mtk.katowice.pl www.mtk.katowice.pl

5,100

4,000 550

WND WND

17

11 6 -

3 19

1 -

51

WND

WND

9

Mi´dzynarodowe Targi Szczeciƒskie Sp. z o.o. ul. Struga 6-8, 70-777 Szczecin 91 464-4401/91 464-4402 office@mts.pl www.mts.pl

4,150

60,000 320

700 -

19

11 8 -

1 1 1

1 4

29

1991

Ma∏gorzata Lis

10

Targi Toruƒskie Sp. z o.o. ul. Szosa Che∏miƒska 27, 87-100 Toruƒ 56 658-2090/56 658-2099 biuro@targitorunskie.pl www.targitorunskie.pl

3,065

17,000 320

WND WND

10

8 2 -

81 3 10

1 2

104

WND

Kazimierz Zawal

11

Mi´dzynarodowe Targi Lubelskie SA ul. Dworcowa 11, 20-406 Lublin 81 534-4614/81 534-9295 mtl@targi.lublin.pl www.targi.lublin.pl

2,800

7,000 200

WND WND

14

12 2 -

5 2

1 -

15

2004

Beata Gorajek

Notes: WND = Would Not Disclose.

All information provided by the Polish Chamber of Exhibition Industry.

Roofed space (sqm)

Total number of Outdoor exhibition Own fairs / parking spaces / Total number of fairs space (sqm) / Polish organizers / Number of hosted in 2010 Conference hall underground Foreign organizers parking space (sqm) spaces

Number of events hosted in 2010

Rank

Number of fairs hosted in 2010

www.bookoflists.pl

Conferences / Congresses / Corporate meetings

Concerts / Sport events / Galas

Total number of events hosted in 2010

Year completed

Top local executive

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Monika Brysiak, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (+48) 22 639-8569, or via email to wbjbol@wbj.pl. Copyright 2011, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

20

MARKETS

www.wbj.pl

AUGUST 20 – SEPTEMBER 2, 2012

Stocks report

world stock indices DJIA

NASDAQ

13,250.11 (Aug 16 close)

S&P500

3,062.39 (Aug 16 close)

0.65% (for the week)

FTSE100

1,415.51 (Aug 16 close)

1.45% (for the week)

DAX

5,834.5 (Aug 16 close)

0.91% (for the week)

-0.29% (for the week)

Hope buoys stocks

NIKKEI225 6,996.29 (Aug 16 close)

9,092.76 (Aug 16 close)

0.45% (for the week)

1.27% (for the week)

CHANGE: 6.88%

CHANGE: -15.62%

CHANGE: 10.84%

CHANGE: 2.36%

CHANGE: 15.16%

CHANGE: 6.22%

(year to Aug 16)

(year to Aug 16)

(year to Aug 16)

(year to Aug 16)

(year to Aug 16)

(year to Aug 16)

52-week high: 13,279.32

52-week high: 3,122.57

52-week high: 1,419.04

52-week high: 5,965.60

52-week high: 7,157.82

52-week high: 10,255.20

52-week low: 10,655.30

52-week low: 2,335.83

52-week low: 1,099.23

52-week low: 4,944.40

52-week low: 5,072.33

52-week low: 8,160.00

Andrew Nawrocki WBJ market analyst After a solid week of gains during August 6-10, with the blue-chip WIG20 gaining well over 3 percent, the week ending August 17 proved much less optimistic.

With hope continuing to drive markets upwards, investors got a scare with poor macroeconomic data being released throughout the week. Monday August 13 started off quietly, with the only real news coming from KGHM, after the company released poor Q2 results. Shares in the firm dropped more than 1 percent, while the WIG20 closed flat.

Hope alone seemed to buoy stocks on Tuesday, August 14, after a slew of poor economic data was released in Europe. Polish stocks managed to stay afloat, eventually closing the

Major indices WIG

42,408.41 (August 16 close)

WIG20

2,343.94 (August 16 close)

16.08

14.08

13.08

10.08

09.08

08.08

07.08

06.08

03.08

02.08

01.08

31.07

30.07

16.08

14.08

13.08

10.08

09.08

08.08

07.08

06.08

03.08

2,000

02.08

38,000

01.08

2,080 31.07

39,000

30.07

2,160

27.07

40,000

26.07

2,240

25.07

41,000

24.07

2,320

23.07

42,000

20.07

2,400

19.07

43,000

27.07

52-week low: 2,035.80

26.07

Change year to August 16: 6.83%

25.07

52-week low: 36,549.47

24.07

52-week high: 2,450.95

Change year to August 16: 10.67%

23.07

Change for the week: 1.06%

20.07

52-week high: 42,408.41

19.07

Change for the week: 1.03%

Top 5 CELTIC REGNON MONNARI MCLOGIC ANTI

Closing 11.92 0.06 1.01 26.25 2.46

% change (week) 52-week high 55.82 23.00 20.00 0.38 14.77 2.01 14.63 42.45 14.42 2.46

52-week low 7.00 0.04 0.70 19.90 0.56

Top 5 TPSA KGHM CEZ PEKAO PKOBP

Closing 17.22 135.00 121.00 159.90 35.59

% change (week) 4.36 3.85 3.42 2.96 2.86

52-week high 18.56 174.90 141.50 164.80 37.83

52-week low 15.18 102.40 111.90 115.10 27.95

Bottom 5 ABMSOLID RESBUD PEMUG ENERGOPLD IFCAPITAL

Closing 0.25 20.86 0.91 0.22 1.65

% change (week) -32.43 -28.07 -23.53 -21.43 -19.51

52-week low 0.25 2.88 0.86 0.21 0.45

Bottom 5 ASSECOPOL POLIMEXMS TAURONPE PGNIG PKNORLEN

Closing 44.66 0.65 4.74 4.19 38.96

% change (week) -3.54 -2.99 -2.67 -2.33 -2.11

52-week high 55.45 2.28 5.77 4.39 41.68

52-week low 34.50 0.58 4.10 3.61 30.33

52-week high 5.25 70.00 1.69 3.45 14.97

Currency report

Z∏oty ignores warning signs

Other indices sWIG80

9,361.20 (August 16 close)

WIG-Banki

6,237.06 (August 16 close)

16.08

14.08

13.08

10.08

09.08

08.08

07.08

06.08

03.08

02.08

01.08

31.07

30.07

16.08

14.08

13.08

10.08

09.08

08.08

07.08

06.08

03.08

02.08

01.08

5,400

31.07

32.0

30.07

5,580 27.07

32.8

26.07

5,760

25.07

33.6

24.07

5,940

23.07

6,120

34.4

20.07

35.2

19.07

6,300

27.07

52-week low: 4,482.49

26.07

Change year to July 16: 7.07%

25.07

52-week low: 33.90

24.07

52-week high: 6,642.69

Change year to July 16: -16.65%

23.07

Change for the week: 1.93%

20.07

52-week high: 45.48

19.07

Change for the week: -0.83%

36.0

Adam Narczewski X-Trade Brokers DM SA

16.08

14.08

13.08

10.08

09.08

08.08

07.08

06.08

03.08

02.08

01.08

52-week low: 8,218.71

27.07

26.07

16.08

14.08

13.08

10.08

09.08

08.08

34.58 (August 16 close)

52-week high: 10,536.29

SOURCE: WSE

NewConnect

07.08

06.08

03.08

9,200 02.08

2,100

01.08

9,280

31.07

2,140

30.07

9,360

27.07

2,180

26.07

9,440

25.07

2,220

24.07

9,520

23.07

2,260

20.07

9,600

19.07

2,300

25.07

Change year to July 16: 8.80%

24.07

52-week low: 2,076.52

23.07

Change year to July 16: 4.58%

20.07

Change for the week: 0.48%

19.07

52-week high: 2,561.94

31.07

2,290.62 (August 16 close)

Change for the week: 1.34%

30.07

mWIG40

day with small gains. Hit hard, though, were shares of Citi Handlowy, shedding nearly 5 percent.

With markets closed in Poland on Wednesday, August 15, due to a national holiday, stocks opened on Thursday with large rises.

Hope pushed stocks higher, after supportive comments from Germany on the European Central Bank’s efforts to contain the region’s debt crisis heartened nervous investors. The overall WIG managed to reach its highest point since August 5, 2011, closing the day with a 0.98 percent rise. Similarly, the WIG20 rose 1.13 percent, closing at its highest level since March of this year.

On Friday, the WIG closed down 1.1 percent while the WIG20 finished down 1.23 percent. ●

Volatility declined over the two weeks ending August 17 as investors continued their wait for major central banks to provide additional stimulus to financial markets.

Markets also continued to ignore poor macroeconomic data from various economies, with stock indices rallying.

Signs indicating the possibility of European Central Bank intervention on the debt market boosted the euro, which rebounded to its monthly high of $1.2440 against the dollar. A corrective movement brought it down to $1.2340 by Friday, August 17, but in the next couple of weeks I expect a rally to levels above $1.25, which should have an effect on the z∏oty market.

The Polish currency, which has been stable over the last few months, contin-

ued to appreciate despite negative external factors. We have to note, though, that macro data indicates a slowdown could be in the cards.

CPI inflation has continued to decline and recent PMI reports show that the manufacturing sector is contracting.

Despite the potential dangers, the z∏oty kept appreciating in the first half of August, reaching zl.4.03 against the euro – its yearly low. A further decline of the EUR/PLN was not to be and a rebound took it to z∏.4.07 by the close of the week ending August 17.

The outlook remains positive for the z∏oty with the z∏.4.00 level in sight. The USD/PLN, after reaching its four-month low of z∏.3.25, rebounded to finish the week at z∏.3.30. ●

currency rates 4.1402 17.08

SOURCE: NBP

4.2098

4.2007 16.08

4.2477 13.08

14.08

4.2287

4.1925 09.08

0.1042

0.1031 17.08

4.0

10.08

PLN-100JPY

4.5

16.08

0.1043

0.1041 14.08

13.08

10.08

0.1042 09.08

3.3998

3.3868 17.08

0.10

0.1041

PLN-RUB

0.11

16.08

3.4048 14.08

3.3989 13.08

10.08

3.3816 09.08

5.2216

5.1687 17.08

3.3

3.3949

PLN-CHF

3.5

16.08

5.1869 14.08

5.2017 13.08

10.08

5.1509 09.08

3.3253

3.2886 17.08

5.0

5.1786

PLN-GBP

5.5

16.08

3.3059 14.08

3.3202 13.08

10.08

3.2915 09.08

4.0820

4.0680 17.08

3.0

3.3195

PLN-USD

3.5

16.08

4.0888 14.08

4.0823 13.08

10.08

4.0615 09.08

4.0

4.0771

PLN-EUR

4.1

SPORTS

AUGUST 20 – SEPTEMBER 2, 2012

www.wbj.pl

Olympics round-up

Poland won just two golds in London, making it the country’s worst Summer Olympics since 1956 In total Poland won 10 medals at the London 2012 Olympic Games, just as they did in Beijing and Athens in 2008 and 2004. But with just two golds, it was the country’s worst Olympic performance since 1956.

Success stories

FACEBOOK/TOMASZ MAJEWSKI

Polish shot putter Tomasz Majewski cemented his place

future. “He is young, he is explosive and will always throw very far. The next Olympic Games will be his, but this one is mine,” he said.

Poland’s other gold medal came from weightlifter Adrian Zieliƒski, who took the title in the 85 kg category. The 23-year-old, who won the World Championship in 2010, lifted a combined weight of 385 kg to come in first place ahead of Russia’s Apti Aukhadov and Iran’s Kianoush Rostami.

His success was all the more remarkable considering it was Poland’s first weightlifting gold since the 1972 Munich Games.

“It is the fulfillment of my dreams to have this medal. …

I was sure I was going to get a medal. But in the last lift I felt a second strength so I just decided to go for it,” he said after the competition.

as the country’s premier athlete after winning gold for the second Olympics in a row.

The 30-year-old became the first man since 1956 to retain the Olympic shot put title with his third round throw of 21.87 meters, enough to overtake Germany’s David Storl, who threw 21.86 meters. With the title already won, Mr Majewski then achieved a season’s best of 21.89 meters to ensure there were no questions about his right to stand at the top of the podium.

Following his victory Mr Majewski said he expects Mr Storl to be a champion of the

Tomasz Majewski celebrates winning the gold medal at the London Olympics

in July, were knocked out by Russia in the quarter-finals.

Poland lost to both Australia and Bulgaria in the group stage but won through to the knockout rounds after finishing in second place in Group A. But despite high hopes, their tournament ended with a 3-0 defeat to the eventual gold-medal winners Russia.

Following the defeat Polish player Grzegorz Kosok told reporters, “We lost the game, we lost everything.”

One of Poland’s other major medal hopes was 2012 Wimbledon finalist Agnieszka Radwaƒska. However the 23-year-old, who just a few weeks prior had become the first Pole to reach a Grand Slam final since 1939, crashed out in the first round to Germany’s Julia Goerges.

In the women’s doubles Poland was represented by Ms Radwaƒska and her sister Urszula. However, they also failed to progress far and were knocked out in the second round by the American pair of Liezel Huber and Lisa Raymond in straight sets.

Volleyball and tennis stars fail to shine Arguably the country’s biggest disappointment came with the men’s volleyball team, who despite going in as one of the favorites following victory in the World League

David Ingham

American football

Europe to take on US at National Stadium American football players from the US and Europe will meet in a much-anticipated clash at the National Stadium in Warsaw on September 1.

The stadium recently hosted the Polish Topliga Superfina∏ between the Warsaw Eagles and Seahawks Gdynia, with a record crowd for a European match of 23,000 in attendance to see the Seahawks take the title.

After this success, orgainizers of the Europe-US game – dubbed the Euro-American Challenge – are expecting as many as 40,000 fans for this international matchup.

Paul KuÊmierz, the owner of the Warsaw Eagles and the organizer of the Euro-American Challenge, said he hopes to break yet another record with the game.

“We wanted to put on a high-quality international game to get people more interested and help to build the sport,” said Mr KuÊmierz.

“Investing in developing

American football in Poland is a long process, but it has a bright future,” he added.

Team USA has already been selected by George St Lawrence, the founder of the Collegiate Development Football League (CDFL) and includes 11 former Football Championship Subdivision players.

“We are very excited to bring players over to Poland to participate against Europe. We

give college seniors an opportunity to shine as all-stars and to be scouted by the National Football League and the Canadian Football League,” said Mr St Lawrence.

Team Europe will consist of the top European players, with Poland’s Topliga players among those in contention for a place in the squad.

David Ingham

For ticket information, log on to euro-american.pl

COURTESY OF MARCIN WARPECHOWSKI

Organizers predict as many as 40,000 fans could be at the game

Over 23,000 people attended the July 15 Topliga championship game between the Warsaw Eagles and Seahawks Gdynia. The Seahawks won 52-37

COURTESY OF FIVB.ORG

Olympian disappointment

A Polish volleyball player reflects on the team’s 3-0 defeat to Russia Poland’s final medal table – London 2012 Sport Canoe sprint Rowing Sailing Shooting Track and Field Weightlifting Wrestling Total

Gold 0 0 0 0 1 1 0 2

Silver 0 0 0 1 1 0 0 2

Bronze 1 1 2 0 0 1 1 6

21

22

LIFESTYLE

www.wbj.pl

AUGUST 20 – SEPTEMBER 2, 2012

Warsaw Marathon

Political football

All for a good cause

ried the hopes of their fans and the Solidarity trade union, but also those of the Communist Party leaders.

David Ingham

For more information, log on to mundial82.pl

Event

Cultural summer fun Green vehicles August 24-26 CSW – Centre for Contemporary Art ul. Jazdów 2 Warsaw Despite summer slowly coming to an end, there is still the opportunity for some fun in the sun as Warsaw’s Centre for Contemporary Art hosts a wide variety of events this August.

On top of free entry to the center’s indoor art exhibitions

between 6 pm and 11 pm, there are also outdoor movie screenings, workshops, concerts, yoga classes, and organic food stalls.

Friday, August 24 will see a slow-food picnic dinner arranged around specific themes, followed by a screening of Dutch documentary “The Forgotten Space,” which reflects on the effects of capitalism on the social and ecological importance of industry.

On Saturday there will be food workshops where people

are encouraged to cook together, as well as a live set by lo-fi practitioner DJ Smirt.

Sunday will provide the opportunity to buy produce from fruit and vegetable farmer Louis Majlerta, whose produce is known for it’s quality and great taste. This will be followed by yoga and Thai massage classes.

David Ingham

For more information, log on to csw.art.pl

COURTESY OF BATORTABOR.COM

A new Polish documentary has used archive news footage and recent interviews with players and commentators to tell the story of Poland’s 1982 World Cup campaign, which took place amid a backdrop of crisis as the country’s people struggled against the communist

powers in order to win their freedom.

The film, which is directed

by Micha∏ Bielawski, shows how sport united a nation as Poland’s last great national side reached the semi-finals of the World Cup in Spain and enabled Poles to forget for a few short weeks the stress of life under the oppressive regime.

It also highlights the pressure felt by the players of the time, including Zbigniew Boniek and W∏odzimierz Smolarek, who not only car-

Some of the runners in the Warsaw Marathon will be raising money for a charity that helps sick kids go to camp The 34th Warsaw marathon takes place in the capital at the end of September and many runners will be raising money for charity. One charity organization participating is Kompania Wra˝eƒ (The Troop of Philanthropists) with their runners raising funds for the Bátor Tábor Foundation, an organization that offers therapeutic camps and recreation programs in Central Europe

for children with serious illnesses.

Individual runners have agreed to raise z∏.2,500 each in sponsorship by completing the 40 km course which stretches from Poniatowski Bridge through the Old Town and along a 10 kilometer fan-friendly route before eventually leading back to the National Stadium. Participants have 6.5 hours to complete what organizers have called “one of the most beautiful tracks in Europe.”

The money raised will be given to the Bátor Tábor Polska Foundation, which plans to use the money to offer more Polish children with cancer the chance to attend the therapeu-

tic camps in Hungary.

The camps feature a number of recreational activities, from archery to handicrafts, that are intended to boost children’s self-esteem and give them a breath of fresh air from hospitals.

Applications to run as part of the team are now open on kompaniawrazen.pl. The campaign recruits runners regardless of their experience and offers the choice between running a full marathon and a half marathon Anthony Adams

For more information about Bátor Tábor, log on to batortabor.com

Media patronage

Charity volleyball event a fundraising success

COURTESY JONES LANG LASALLE

Mundial. The Ultimate Gamble August 30 Solidarity Festival of Arts Neptune Cinema Gdaƒsk

COURTESY OF SOLIDARITYOFARTS.PL

Film premiere

Real-estate firms competed in the third charity beach volleyball tournament organized by Jones Lang LaSalle at the beginning of August, with the event raising a record z∏.100,000 for charity.

Gathering 500 real estate professionals at Warsaw’s La Playa music bar, the event proved a lively affair featuring some intense competition in the scorching afternoon sun and a lively beach party in the evening.

Friends of Litewski Children’s Hospital, an organization which collects money for the pur-

chasing of magnifying equipment used during surgery on infants and premature babies, received z∏.4,000 of the money raised.

The remaining money went to Jasiek Mela’s “Beyond Horizons” Foundation which funds new prosthetic devices for disabled people.

Out of the 19 real estate firms competing, Colliers International emerged as the winning team, followed by Polish Properties and Cushman and Wakefield in second and third place respectively. ●

LAST WORD

AUGUST 20 – SEPTEMBER 2, 2012

www.wbj.pl

23

Tech Eye

Living in relative poverty isn’t so bad, really. Unless you enjoy edible food or socially acceptable clothes.

Or shiny toys. Or human dignity.

At least that’s Techeye’s experience of it. Not caring what we eat or wear takes the sting out of penury, and our habit of wearing what we eat generally renders dignity a moot point. But the shiny toys... well, not being able to afford those can be tough.

Indeed, a few years ago we tried to join a crew of Somali pirates in order to earn booty enough for a new gaming computer. Unfortunately our pirate accents were mutually incomprehensible – “arrr

COURTESY OF LEICA

M9-P “Edition Hermès”

matey” in Somali sounds frighteningly akin to “wax my bikini line, fat boy” – so it never worked out. True story, that.

Anyway, this week’s column is dedicated to a couple of things that poor folk like us can’t afford, but Somali pirates probably can.

Behold: Leica’s special M9-P “Edition Hermès” camera (Leicacamera.com), which can be had for the paltry sum of $25,000. How better to spend a salty wad of hardpirated dosh than on a poofy German camera? (OK, there are probably more appropriate purchases, but let’s pretend there aren’t.)

Embarrassing confession time: when Techeye first saw this camera, we read “Herpes” instead of Hermès. We then wasted a very confused minute wondering why anybody would spend $25,000 on that.

The price tag makes more sense when you realize Leica

isn’t peddling social diseases, but not a lot more. What justifies it?

Eighteen megapixels, a body covered with overpriced leather and silver-chrome plating, and a camera strap covered with more overpriced leather, apparently. Oh, and a set of three lenses.

Not a compelling list of selling points in our opinion, but if you’re ready to spend $25,000 on a dinkylooking camera then you’re probably lacking common sense or flush with ill-gotten swag. Taken together that’s a broad demographic and there are only a couple hundred M9-P “Edition Hermès” cameras, so Leica will probably move all its stock.

Another item that costs an arm and a wooden leg is the Kuratas, a four-ton, a four-meter “gigantic boardable robot” which is quite possibly the greatest invention in the history of Mankind. We recommend watching the promotional video for this thing – Techeye began ululating with joy about halfway through.

The Kuratas hails from Japan (duh) and is the brainchild of Suidobashi Heavy Industry (Suidobashijuko.jp). It’s a prototype, with more models hopefully

on the way, and it’ll set you back a notinsignificant $1.3 million. And that’s before you buy the weapons.

You read that right, weapons.

There’s a claw and a Lohas launcher (which launches water bottles), a pilebunker (no idea) and a twin Gatling gun, among others. The Gatling gun is a musthave in our opinion, as it fires 6,000 BBs per minute and looks suitably menacing.

But wait, there’s more! Listen to this: Kuratas “Kuratas will not allow any wild targets to escape. ... The system will fire BBs when the pilot smiles. This feature is called ‘the Smile Shot.’

You will be able to take out all enemies with a single smile. Be careful not to cause a shooting spree by smiling too much!” Also, an extra $100 will get you a cup holder.

The Kuratas is gloriously, awe-

COURTESY OF YOHEI YAMASHITA / FLICKR

Poverty, pirates and gigantic boardable robots

somely pointless and it now tops our Christmas list. The only real negative is that you need an iPhone to control the thing. OK, the total price of over $2 million (with all extras) is vexing as well.

Techeye may have to learn to talk like a Somali pirate after all. Time to get a-waxing! ●

Ever considered a career in swashbuckling? Let us know: techeye.wbj@gmail.com

To advertise in WBJ’s classifieds section, contact

Ms Agnieszka Brejwo, at (+48) 222-577-526 or abrejwo@wbj.pl