Trading on the Warsaw stock exchange—from reopening in 1991–2000

Abstract

The Polish political and economic systems have been through a period of extensive transformation. As a result of these changes, Polish firms that had previously been state-owned were privatized beginning in 1990 and shares in these firms began trading on the Warsaw Stock Exchange (WSE) in 1991. This paper describes the development of the WSE and Poland's accounting system. It provides a descriptive analysis of trading on the WSE from 1991 through 2000. The number of Polish firms listed on the WSE grew from 5 on the day trading resumed in 1991 to 265 firms by the year 2000. As the number of listed firms increased and as the public grew more comfortable with private ownership, the volume of trading increased. Initial trading resulted in relatively low returns followed by a speculative bubble in 1994. After the speculative bubble burst, firms which had their financial statements audited by an international audit firm experienced growth in value while firms with local auditors declined in value.