The Development Of The Stock Market

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[Draft-2703 words] - HARVARD REFERENCES STYLE “Are Public Equity Markets in Poland in decline?” ===================================================================== Executive Summary This work analyze the development of the stock market in Poland, between 2000 to the current period. As an explanatory variable, it is used the annually number of IPOs. In fact, there is a positive relationship between the stock market index returns and the number of IPOs. This has been proved by many authors (Loughran et al., 1994; Ljungqvist, 1995; Rydqvist and Högholm, 1995; Rees, 1997). The IPO is a very complex process, and its success depends on a number of factors, some of which are beyond the company’s control. Even a very attractive offering…show more content…
However the recent trends are concerning, the number of IPOs is lower than at corresponding points in previous cycles suggesting that the overall trend in IPOs is downwards. This may be a particularly severe cyclical effect in response to the recession; on the other hand it may reflect a structural change. In the next section, possible explanations are outlined. As there are various advantages of IPO such as access to capital and higher public profile, IPO decline is likely to negatively impact the economy as well as companies and investors. Even though causality is disputable, relationship between public equity markets and economic growth is positive according to many researches. Since IPO is a good means of employment creation, IPO decline is likely to negatively affect employment creation. Considering the causes of IPO decline in Poland, the pension fund system needs to be reformed to be favourable to the public equity market to change the current state. Also in order to encourage market players to actively participate in the market, a stable and predictable policy needs to be established. Public opinions should be reflected and enough notice should be guaranteed in advance for the unavoidable reform. Current state of the Polish and other CEE public equity markets The statistic initial public offering (IPO) volumes in Poland and other the Central and Eastern Europe (CEE) during 2000 to 2012 can be provided by the table and
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