Polish funds lift equity investments

POLAND-Pension funds have invested about 300 million dollars (243.5 million euros) in Polish equities in the last four months and the trend is expected to continue, according to Merrill Lynch.

“We see no reason why this trend should reverse in the short term,” Merrill Lynch said in an overview of the Polish equity market in the fourth quarter.

“We maintain our positive exposure to Polish equities going into the fourth quarter of 2004”, it says.

The report, written by director- emerging market strategies Mohamed Abdel-Hadi and head of research John Morris, states that pension fund equity allocation has remained towards ‘the top end of the historic range’.

Managers have kept nearly 32% of assets under management in equities.

At the end of August pension funds held 16.8 billion zlotys in equities, estimated by the report as 28% of the market free float.

In August assets under management totalled 12.3 billion euros, up 20% on the year.

Monthly inflows averaged 217 million euros and if similar levels of inflows continued till the end of the year total assets would be in the region of 57 billion zlotys.

The report suggests that pension funds have been equity net buyers since May. Basing its estimate on the index WIG20 returns, Merrill Lynch says net buying averaged almost 36% of monthly flows since May.

Earlier this month, treasury minister Jacek Socha said that total assets under management were expected to grow to 44 billion dollars by 2010.

He added that the government would have to undertake 5 billion zlotys of privatisation every year on the stock exchange to contribute to the development of the pension funds industry.

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