Infrastructure investments in danger?
October 22, 2018
The Polish government is failing to find contractors for an increasing number of infrastructural contracts, the daily Rzeczpospolita wrote.
In the last four months, railway infrastructure operator PKP PLK held tenders with a total budget of PLN 6 billion, but the some of lowest bids in those tenders reached PLN 10 billion. In the last tender for a segment of the Poznan-Szczecin railway line, the cheapest offer exceeded the budget by 66%.
PKP PLK needs to formally acknowledge market reality to revise the current unrealistic budgets, chairman of the ProKolej Foundation noted. In railway construction, the situation is less dramatic, but here, too, firms are withdrawing from signing contracts as market developments rendered their bids unrealistic.
Poland wants European Commission intervention
September 17, 2018
The Polish government sees a need for an intervention by the European Commission concerning the growing CO2 emission allowances prices, Energy Minister Krzysztof Tchorzewski told PAP.
“The situation calls for an intervention,” Tchorzewski said. “The European Commission should be asked to look into it.”
According to Tchorzewski, some powerful players on the EU market may make bulk purchases of CO2 emission allowances in advance, and then dictate prices.
“The fact that the allowances are traded directly across the entire EU puts us in a more difficult position, as our purchasing power is smaller,” Tchorzewski observed.
The growing prices of CO2 emission allowances are not currently affecting Polish end-users and hardly impact the local power sector next year’s prospects, Tchorzewski remarked, while expressing fear that the prices might soon come to PLN 100 [per contract].
The price of the benchmark contract for CO2 emission allowances in the the EU emission trading system ETS exceeded EUR 25 per ton at the London stock exchange on September 10. At the September 12 close, the price of the December contract on the ICE Futures Europe market fell 5.1% to EUR 22.95 per ton.
On September 13, CO2 emission allowances prices fell by 18% on the ICE Futures Europe market, the deepest decline in four years, following the comment from Poland’s Energy Minister, according to Bloomberg.
MPC’s annual strategy
September 14, 2018
Poland’s Monetary Policy Council retained its overall policy rationale, holding to a mid-term direct inflation target of 2.5% +/- 1 percentage point, a target which will be pursued flexibly to ensure any shocks won’t distort policy, the council said in its annual strategy outline.
The 2019 guidelines showed no viable discrepancies to prior versions, matching a recent signal from NBP governor Adam Glapinski that the document bore “nothing revolutionary.”
The council opened with a hat tip to its Constitutional mandate of price stability first, growth second. Financial stability has long-since been added to the council’s own mix of goals and considerations.
As ever, the council will work within a floating exchange rate system with no FX target, but offers its standard warning of the possibility of intervention.
The policy will be “flexible” when faced with shocks, the council continues to insist, with response dependent on the kind of shock and their expected long-term effects.
The central bank left its full policy toolbox unchanged versus the prior version of the document.
VAT returns speeding up
September 13, 2018
The Polish government accelerated VAT returns to taxpayers, with transfers originally slated for September and October made as early as in August, the daily Dziennik Gazeta Prawna wrote citing an anonymous official from the state tax authority KAS and two other unspecified sources. Accelerated VAT returns might “positively influence the financial condition of companies and encourage them to invest,” KAS said in response to the daily’s inquiry, thus suggesting that the reason behind the operation is the government’s concern about the country’s lagging investments.
EBRD invest in Poland
September 12, 2018
Poland could host EUR 650 million in investments from the European Bank for Reconstruction and Development in 2018 and a potentially higher sum in 2019 if renewable energy projects kick in, director at EBRD Grzegorz Zielinski told PAP in an interview.
“I think that this year the sum of EBRD investments in Poland will be similar to last year’s and will amount to around EUR 650 million. We would like to have a similar level next year but I hope it will be more, if renewables’ financing rebounds.”
“We see a big, very positive change in the approach to renewable energy sources. We hope this change will enable us to get re-involved in very active financing of new renewable capacities in Poland.” EBRD is interested in “large wind projects, also solar projects” and is also ready to cooperate on financing offshore wind farms. EBRD could get involved in 3-4 wind farm projects next year provided “there is an auction, there are projects.” EBRD’s involvement could exceed EUR 100 million assuming the projects have 100 MW capacity each.
EBRD is also interested in “financing gas-fired blocks, especially that they are extremely important in the context of supporting unstable renewable energy sources.” The bank could also support “projects related to energy efficiency in industry, in distribution, projects relayed to energy storage, e-mobility, energy-efficient intermodal transport or insulating buildings and apartments.”
“We want to support the capital market development when it comes to its infrastructure and creating new instruments. We have actively promoted mortgage bonds, we are involved in discussions on REIT.” and “We are actively involved in works on the strategy for capital market development”, Zielinski said.
CEO on Famur’s strategy
September 11, 2018
Listed mining machinery provider Famur focuses on foreign expansion, also via acquisitions, and sees it as one of the key elements of the company’s soon-to-be-published strategy, while it enjoys the good economic situation that encourages the mining sector to invest, CEO Miroslaw Bendzera told PAP in an interview.
The company has selected its “priority markets,” with “Eastern countries” seen as one of them. Famur also eyes developing economies in the South-East Asia as mining and power sector are on a fast rise in these countries. New countries, such as Australia, have also entered the company’s scope of interest.
Famur hopes to “effectively make use of the positive market trend, which will be manifested on the results side” in the coming quarters, falling back on “the flexible model of production management.”
The company suffered not only from growing labor and services costs last year, but also from increases in prices of materials and parts used in the company’s production process.
Acquisitions are seen as one of the tools for tapping into foreign markets as they would offer Famur “a faster access path to select markets”.
“We are constantly monitoring and analyzing the situation of the markets that are of interest to us from the perspective of interesting acquisition projects. We want to be prepared when the right moment comes”, CEO said.
Fund houses accuse publisher
Investment fund house Trigon TFI denied media speculation that it could lose its license for managing funds in relation to regulatory inquiry into management of some securitization funds, calling the Business Insider Polska’s publication “an element of particularly aggressive black PR” against Trigon, the manager said in a statement sent to the press.
At the same time, Altus TFI notified the prosecutor’s office of a possible attempt to manipulate the company’s share price, with potential consequences for the entire capital market, following the publication.
The article claimed that Altus and possibly also peer Trigon TFI could lose the license for managing alternative funds at the October sitting of financial market regulator KNF.
Minister on electromobility
Poland should have 6,500 electric car charging stations in 3 years’ time, Energy Minister Krzysztof Tchorzewski said during a panel discussion at the Krynica economic forum. The investments should not drive up sharply electricity prices in the coming 18 months, he asserted. Fuel firms should face no threat from the electromobility market for the next decade, according to the official.
Exports all-time high
Poland will likely end 2018 with a EUR 2.5 billion foreign trade deficit despite annual exports seen rising to a new all-time high of ca. EUR 219 billion, deputy Business and Technology Minister Tadeusz Koscinski said confirming his ministry’s estimates during a panel discussion at the Krynica economic forum.
New regional index planned
Listed WSE operator GPW and its regional peers would like to sign a “detailed” letter of intent next month or in two months at the latest to create a common index, currently seen as comprising ca. 40 companies, CEO Marek Dietl told the daily Parkiet in an interview.
That index could serve as a basis for establishing an ETF fund, Dietl believes.
WSE is also eyeing technological cooperation with regional peers, with a focus on a securities lending platform, he said.
Minister on economic growth
The Polish government will struggle to maintain GDP growth rate at the level seen in Q2, Investment and Development Minister Jerzy Kwiecinski told a news briefing in Krynica.
“I would like for the GDP growth to be close to the one from Q2,” Kwiecinski said, when asked about GDP growth forecast for Q3. “We are aware that it will be difficult to maintain it in the coming quarters.”
“If Poland manages to keep GDP growth between 4 and 5%, it will guarantee us a stable long-term economic growth,” he added.
Poland’s GDP growth stood at 5.1% year on year in Q2 vs 5.2% in Q1.
First Polish blockchain smart contract for commercial real estate.
Polish start-up ShareSpace (www.sharespace.pl) has created in August 2018 the first office rent transaction in Poland based on blockchain technology.
ShareSpace is the marketplace that allows to find, compare and rent coworking or shared office spaces online, due to the analytical tools and standardization of all offers. The advantage of using blockchain in the lease process is not only transaction security. The whole operation is automated, so the office operator saves time and money on long-term negotiations. In turn, the tenant is able to find the right space and make a rent contract within a dozen of minutes.
“Most lease agreements on the real estate market are concluded in a traditional paper form. Until now, the parties have exchanged scans of signed documents, not seeing each other and with no possibility of checking the identity. This means that the contract could de facto be unjustifiable in case any of the parties turned out to be false. However, we strongly believe in this electronic documentary form, secured by the blockchain technology, because it allows full verification of both sides of the transaction”, says Robert Chmielewski, ShareSpace co-founder.
“The challenge of all marketplace online portals is a lack of trust, because neither side is able to rely on each other completely. We solve this by using blockchain technology. Thanks to it, we can guarantee the integrity of data and all files sent via the platform, because after adding them to the blockchain, they cannot be removed or changed. Both sides of the transaction can refer to a given document knowing that it is original and intact”, says Marcin Dyszyński, another co-founder of the platform.
New investment vehicle in Central Europe
Poland and 11 other CEE states want to set up an investment vehicle with EUR 5 billion budget expected to generate investments worth over EUR 100 billion, according to Polish state bank BGK CEO Beata Daszynska-Muzyczka.
The countries plan to sign a letter of intent on the matter at the Three Seas summit taking place in Budapest on September 17-18. The initiative should kick off in 2019.