As the former Chairman of Stock Exchange Council Wiesław Rozłucki emphasized during the talk with news organization Newseria Investor, Warsaw Stock Exchange (WSE) has currently many recorded products, and thus the actual market weakness does not result from a too narrow range of available instruments. The main indexes of WSE have been experiencing a long-lasting decline trend since May 2015. In that period the WIG20 rate sank more than 30 per cent and the index of the broad market – WIG – is already over 23 per cent below the line.
The market is waiting for instruments which allow locating money in real estates. The funds located in properties are internationally called REITs. However, we do not have such instruments right now – informs Wiesław Rozłucki.
REIT (Real Estate Investment Trust) funds, that is a form of collective investing on the real estate market, are mainly popular in the United States and Western Europe. In the country, the legislation process is currently being conducted in the area of this solution. The assets of REIT are e.g. possibility of setting the dividend paid to investors off against the taxable amount.
Covered bonds could also play a big role in this process. Financing of properties by common loans turned out to be not sufficient. Banks and financial institutions should have the other side of financing, that is financing through covered bonds, and works on this project are in progress – adds the former Chairman of Stock Exchange Council.
Only mortgage banks and national bank Bank Gospodarstwa Krajowego have a possibility of emission of covered bonds. This solution is structurally similar to bonds since it provides the constant interest income. Moreover, the secure of emission are assets in the form of granted mortgage loans. It is a new area and I think that it will activate new investors – sums up Wiesław Rozłucki.
At present, there are only three issuers of covered bonds on the indebted Catalyst market – mBank Hipoteczny, PKO Bank Hipoteczny and Pekao Bank Hipoteczny. Moreover, investors are not particularly interested in this kind of solution. Only single transactions on three issues took place in January this year. However, the representatives of the stock exchange hope for making these instruments more available.