To what extent does the USA influence Poland? More and more information coming from the United States points to the fact that in the largest economies in the world times of serious crisis are approaching.
To what extent does the USA influence Poland?
More and more information coming from the United States points to the fact that in the largest economies in the world times of serious crisis are approaching. The scale of the problem is so significant that it may also have an impact on the future of the Polish economy. At the same time, the state of the Polish economy is good thanks to stable growth, which has to a large extent made our country resistant to external shake-ups. The Polish banking sector has not yet seen any of the phenomena which gave rise to the banking crisis connected to risky mortgage loans in the USA.
The shares and bonds market
The Polish shares market is subject, on the one hand, to fluctuations arising from instability in the markets of the EU and the USA. Another factor which has had a negative effect on the market is the falling profit margin of national businesses as a result of the rising costs of labour and materials. On the other hand, the shares market is strongly supported by good economic conditions in our country. "The effect of these contradictory factors will still lead to greater variability on the stock market and nervousness amongst investors," says Michał Szymański, vice-president and investment director at Commercial Union PTE.
Fixed interest bonds are under pressure from growing inflation in Poland, which leads to a fall in the price of securities. An effect of this is perturbation in this market.
The answer to increased risk on the national shares and bonds market should be greater diversity in terms of pension fund investments.
OFE (Open Pension Funds) investment strategies
The development of the Polish capital market has brought about a decrease in the concentration of investment in share fund portfolios. At the end of 2005 the four largest items in the aggregate shares portfolio for all Open Pension Funds stood at 40.4% of the portfolio, whereas at the end of 2007 this figure was only 29%. The share of the 10 largest items has decreased over this period from 60 to 48%.
"The share of foreign investment is still low. However, we have observed development in the market of bonds issued by businesses and greater involvement of pension funds in this type of investment," highlights Michał Szymański.
The current market situation confirms the legitimacy of a further increase in diversity with regard to fund investments, which could come as a result of appropriate adaptation of investment rules for Open Pension Funds. Representatives of Commercial Union PTE suggest, among other things:
- A gradual increase in the limit of foreign investment (initially from 5 to 10%.)
- Limiting the requirement for foreign issuers to have a rating in order to invest in their debt securities
- A uniform settlement of the costs of foreign investment
- Enabling funds to lend valuable securities
- Allowing investment in private equity funds
- Allowing the possibility of using derivative instruments in the case of certain investment strategies.
The recent proposition of the Financial Supervision Authority that Universal Pensions Companies could manage pension funds at a different risk level is also interesting. "The introduction of several funds has enabled us to better adjust our activity (investment strategies) to the needs and position of our clients," highlights Piotr Szczepiórkowski, President of Commercial Union PTE.
"It would be significant to be able to give young customers a choice of funds with a larger share of assets at a higher risk level and a higher rate of return while at the same time allowing those who are approaching retirement age to transfer their money to a fund with a lower risk level," adds Michał Szymański.
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Information:
Bohdan Białorucki
Telephone: (22) 557 43 41
E-mail: public_relations@cu.com.pl
Grzegorz Mathea
Telephone: (22) 557 43 70
E-mail: grzegorz_mathea@cu.com.pl
Additional information can be found at www.cu.pl/
Notes to editors:
The Commercial Union Poland group is part of the international Aviva group, the world's fifth and Great Britain's number one insurance organisation in terms of revenue. The Aviva group operates in 30 countries. It occupies a strong position in Great Britain, Ireland, France, Holland, Spain, Italy, Poland, the USA, Canada and Australia. It services over 40 million customers around the world, has an annual revenue of around £41.5 billion and manages assets to the value of over £364 billion. For additional information see: www.aviva.com/