Key events of 2011

In 2011, the following key events, significant for the development of WSE, took place:

WSE Signed an Agreement to Acquire 80.33% of TGE and Financed the Acquisition with an Issue of Bonds

On November 8, 2011, WSE signed an agreement to acquire a block of 80.33% of shares of Towarowa Giełda Energii S.A. (Polish Power Exchange, “TGE”); the agreement was finalized in February 2012 when WSE took over a controlling block of TGE shares. Following the launch of the poee WSE Energy Market in December 2010, this is another step in the development of a market in exchange commodities and their derivatives.

The acquisition of TGE was financed with cash raised in an issue of WSE bonds. In a public offering addressed to qualified investors, investors took up series A bonds with a nominal value of PLN 170 million in December 2011. In a public offering in February 2012, WSE offered 750,000 series B bonds with a nominal value of PLN 75 million, which were taken up by retail investors. Series A bonds are listed on Catalyst as of January 4, 2012 and series B bonds as of February 20, 2012.

Prior to the acquisition of 80.33% of TGE shares, WSE held TGE shares representing a 2.33% stake in the share capital. In addition, in December 2011, the Company signed agreements to acquire TGE shares from other shareholders in a total number representing 7.68% of TGE shares.

Record-high Number of New Listings on WSE Markets

According to the annual PricewaterhouseCoopers IPO Watch Europe report, WSE ranked first in Europe with a record-high number of IPOs in 2011. In total, 203 companies were newly listed on the WSE stock markets (Main Market and NewConnect). WSE ranked third in Europe by the value of IPOs (EUR 2,199 million).

Foreign companies became much more interested in being listed in 2011. Another 12 foreign issuers were newly listed on the Main Market.

Development of New Products

In 2011, the Exchange continued to expand its offer of financial instruments. Since July 2011, investors can trade in warrants and new structured certificates. In December 2011, leveraged (barrier) certificates were introduced to trading on WSE. During the year, 8 classes of single-stock futures were introduced to trading, including first-ever futures on the stock of a foreign company (Kernel). In January 2012, two new classes of single-stock futures were introduced to trading, including futures on WSE stock.

In addition, two ETFs (exchange-traded funds) with DAX and S&P500 as the underlying were introduced to trading on WSE in 2011. Three ETFs were listed on WSE at 2011 year-end.

From the beginning of 2011, the Exchange introduced a new WIGdiv index, which includes companies with high dividend ratios which regularly pay dividends. In February 2011, BondSpot started to publish TBSP.Index, the first Treasury bonds index. In May, WSE introduced WIG-Ukraine, the first index of Ukrainian stocks outside of Ukraine. As of December 1, 2011, WSE publishes WIG-Plus, an index of Main Market stocks classified in segment 5PLUS which do not participate in WIG20, mWIG40 and sWIG80. In addition, a new sector sub-index WIG-commodities was introduced in 2011.

In 2012, the Group plans to introduce new indices on the NewConnect market and the first index of CEE Region stocks listed on WSE.

Increase of Investor Activity

Despite adverse conditions on the global financial markets, WSE crossed new marks of market activity in 2011. The value of trading in shares on the Main Market (including block trades) was PLN 268.1 billion in 2011, an increase of 14.4% year on year and the highest annual value in WSE history. The volume of trading in derivative instruments was 15.5 million in 2011, an increase of 5.7% compared to the previous record-high annual volume reported in 2010. Trading on the Treasury bond and bill market Treasury BondSpot Poland grew dynamically in 2011: the total value of trading (cash and conditional transactions) was over PLN 1 trillion (PLN 1,037 billion), as compared to PLN 324 billion in 2010.

As a result of a higher turnover, WSE’s share in trading on all markets of the Region crossed the mark of 50% in 2011, as compared to 41.7% in 2010 and 34.4% in 2009. According to FESE, the value of trading on WSE stock markets represented 50.1% of total trading of all markets of the CEE Region.

The number of domestic WSE members increased to 30 at the end of 2011; another domestic company became a WSE member in January 2012. The number of remote WSE members increased by 10 in 2010 and reached 31 at the year’s end.

According to WSE analysis, the extension of trading hours was one of the main drivers of intensified investor activity in 2011. As of the beginning of 2011, trading hours were extended by one hour and now close at 17:35 Central European Time (CET). The goal of extending the trading hours was to adjust WSE trading time to European standards. An analysis of historical data indicates that extension of trading hours at each time increases turnover in the long term. In the first year after the change of the trading timetable, the average number of transactions per trading day on the Main Market increased by 14.2% to 55 thousand.