The Warsaw WIG index is hitting record highs. The same is true of our VIG equity sub-funds: VIG / C-QUADRAT Akcji and VIG / C-QUADRAT Global Growth Trends.
It is worth noting that the record-high share prices on the Warsaw Stock Exchange are accompanied by a very high level of IPO and SPO activity, as well as major M&A transactions: the takeover of Santander Bank Polska and the announced intention to acquire Żabka. The total value of IPO, SPO and ABB transactions comfortably exceeded 10 billion zlotys in the first half of the year. In terms of value, we are outperforming every other market in Central Europe. For the record: pessimists would point out, given these figures, that strong growth in IPOs, SPOs and ABBs has historically signalled the end of a bull market…
To complete the picture, we should add the finally positive net inflows into equity funds this year. And, last but not least, the introduction of a new scheme designed to stimulate investment in the capital market: OKI. This is the first entirely voluntary scheme in a very long time, offering an additional tax incentive, designed to develop the market and directly encourage a broad section of the population to invest, rather than merely passively saving money in low-interest bank accounts.
As for global markets, proponents of the efficient market hypothesis are being put to the test. Every time US President Donald Trump announces the conclusion of negotiations with Iran, ending the war, or an announcement of the complete destruction of Iran’s military capabilities – definitively ending the war and restoring stability to the Middle East – causes oil prices to plummet. After a while, oil prices rise again when it becomes clear that the war is, in fact, continuing and stability remains a long way off. This cycle has already repeated itself between 5 and nearly 10 times, depending on the time period considered. And… yet another announcement of negotiations to end the war results in falls in oil prices. As can be seen, investors really do want an end to the war in Iran…
Michał Szymański, Chairman of the Management Board of VIG/C-QUADRAT TFI
