The war in Ukraine undermined the attractiveness and efficiency of one of the main stock exchanges in Eastern Europe – the Warsaw. After the start of the war, several issuers left the trading floor, trading volumes decreased, and investor interest fell sharply. A significant role in these processes was played by Ukrainian companies that were directly affected by the Russian invasion and collapsed at the auction. Bloomberg writes about this with reference to experts and a report by the Ukrainian company Kernel (brands Schedry Dar, Stozhar, etc.), which decided to leave the Warsaw Stock Exchange.
Kernel is the largest producer of sunflower oil and grain in Ukraine. The company was founded back in 1994 by Andrey Verevsky, and in 2007 it entered the Warsaw Stock Exchange. The Ukrainian company hoped to attract financing in this way, and the Warsaw Stock Exchange – to expand the list of securities and instruments of interest to investors. However, in March 2023, Verevsky's investment company Namsen Ltd. announced that it intends to buy shares from minority shareholders of Kernel, as due to the invasion, the papers of the company collapsed by 60%, and investors and funds do not invest in them due to increased risks.
Namsen's statement, in addition to the decision to delist Kernel, speaks of disappointment in the behavior of the Warsaw Stock Exchange, which in recent years has not contributed to the development of interest in Ukrainian securities and has not taken measures to attract new investors to the market, and the number of issuers whose securities continue to be traded on the main stock exchange in Poland, in recent years has only declined. Namsen is also dissatisfied with the weak interest of analysts in Kernel securities, low liquidity on the stock exchange and the lack of interest of Polish funds in long-term investment. The Ukrainian businessman's company complains that investors are only interested in short-term investments and quick profits.
A representative of the Warsaw Stock Exchange was unable to promptly comment on the accusations and claims to the agency. However, the exchange expert at Erste Group Bank AG, whose perimeter included coverage of Kernel shares, did not agree with some of the arguments of the Ukrainian company. Yakub Shkopek notes that the Ukrainian company has been conducting poor information work with investors for almost a decade, since the annexation of Crimea. At the same time, the situation has not fundamentally changed after the full-scale Russian invasion of Ukraine, he notes.
“The lack of active communication with investors in the first months after the invasion further spoiled the mood. The accusation of Polish investors and the stock exchange, when the majority of shareholders were foreign, seems unjustified, ”Szkopek believes.
Namsen notes that compared to the initial public offering (IPO) in 2007, the share of Polish investors in the company's capital has fallen from 80% to 15%. The agency notes that during three placement rounds in 2007, 2008 and 2011, the company was able to raise about 1.2 billion zlotys (about $270 billion). Namsen also recalls that in September, Kernel tried to raise emergency financing for the company on the Warsaw Stock Exchange, but failed to implement the program, as investors showed no interest in the company.
The Warsaw Stock Exchange has long been considered one of the largest in Eastern Europe. Many European companies preferred to be placed on it due to favorable conditions, as well as a significant number of large players and active investors. However, in recent years, the number of issuers on the site has been rapidly declining. As an example, the agency cites the Polish chemical company of billionaire Sebastian Kulczyk Ciech SA, which also recently decided to delist due to increased geopolitical risks.
