Corporate Bond Market in Poland—Prospects for Development

Jakub Kubiczek

doi:10.3390/jrfm13120306

Abstract

The Polish corporate bond market does not have a history as long as the American one, however, it is characterized by stable annual growth. The growth of the market is related to the growth of its liquidity and is determined by a number of entities, both on the demand and the supply side. The aim of the study was to present the structure of the Catalyst market and bond trading in Poland. The study also discusses the market’s development and identifies the factors that determine this development. Based on reports concerning trading on the Catalyst market, a huge growth was noticed in the 10 years since the market’s establishment. Forecasts indicate that the growth will continue. The outbreak of the SARS-CoV-2 pandemic will cause the market development to be slower than the model’s forecast, although the data for the first nine months of 2020 suggest that the upward trend will be maintained. Moreover, for the market to continue to thrive, a rating must be compulsory for corporate bond issuers. A comparison of the ratings of individual issuers enables investors to analyze the risk and profitability of corporate bonds in an easier way.

Highlights

Both starting a business and running a business require financial resources to ensure the enterprise’s current functioning, using the company’s internal resources
The state will benefit from the development of the corporate bond market, as investors’ capital gains are the basis for taxation in Poland and the source of state budget revenues, whereas the development of enterprises and their increased profits increase the state budget income from corporate income taxes (CIT)
The capital market is the backbone of the capitalist economy

Summary

Introduction

Both starting a business and running a business require financial resources to ensure the enterprise’s current functioning, using the company’s internal resources. To ensure the company’s dynamic development by making investments in the form of purchasing fixed assets, external financing is needed. It is the capital market that creates opportunities for raising funds for development. The optimal situation in the capital market means aligning the volume of demand and supply. Entities provide demand with financial resources and supply for financing enterprises. In order to achieve the optimum equality of supply and demand, enterprises become issuers of securities. As a result, they are provided with financing and their customers’ needs are met

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Conclusion