Invesco Canada blog

Insights, commentary and investing expertise

Matt Peden | January 8, 2014

Poland: a market to watch

Poland, home to almost 40 million people and with GDP of nearly $500 billion, is emerging as an attractive eastern European country to invest in. Last year, I travelled to Warsaw and was impressed by the breadth of high-quality companies operating within the country.

Through meetings with management teams and by attending a government official’s presentation, I found that both private corporations and the government had strong aspirations to distance themselves from the economic hardships endured under a post-World War II communist rule that lasted until 1990. Signs of this free market capitalism could be seen in the country’s privatization programs, strong corporate governance, and the establishment of a regional equity trading hub with the Warsaw Stock Exchange.

Why buy in Poland?

Despite sharing a border with Germany, Poland is very much a developing market with GDP per capita (income per person) at a mere 66% of the European Union (EU) average in 2012. Since my trip, we’ve added two Polish companies to the Trimark Emerging Markets Class, both of which hold durable competitive positions in the Polish market. These companies should capture their fair share of value generated from the gradual convergence of Polish income levels towards EU averages and a corresponding expansion in the middle class.

With higher income levels, Polish consumers will have more funds to purchase consumer products, durable goods and their first homes. In addition, a combination of higher GDP growth and lower government debt levels (Poland’s debt to GDP ratio is 57% versus the eurozone average of 92%) should allow the country to avoid many of the painful austerity measures southern European countries have endured as part of their ongoing deleveraging.

Lastly, as a member of the EU since 2004, but not a member of the eurozone currency union, Poland benefits from EU trade agreements, while maintaining the monetary policy flexibility associated with having its own currency, the zloty.


Poland predominantly depends on western European export markets and many consumers overzealously signed up for low interest rate mortgages in Swiss Francs and euros, which became problematic during the financial crisis when the zloty depreciated sharply against both currencies.

Are there other emerging market countries in Eastern Europe you’d like to learn more about? Share comments below or via e-mail.

Learn more about the Trimark Investments team.

Note: The company mentioned in the article was selected for illustrative purposes only and is not intended to convey specific investment advice.

Matt Peden’s investment philosophy entails buying high quality business, benefitting from some form of sustainable competitive advantage, for less than his estimate of their worth and then holding on to those businesses as their values compound over time. He began his Trimark career as an investment analyst, and now co-manages Trimark Europlus Fund, Trimark Global Fundamental Equity Fund/Class and Trimark Emerging Markets Class.

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