The Polish daily Parkiet speculates about the possibility of changing the limits in Polish pension funds for equity allocation both domestically and abroad. The allocation became an issue recently as the average current domestic equity allocation came in at 38.5%, i.e. slightly below the 40% hurdle. The foreign equities allocation came in at only 1.2% versus 5% hurdle.
According to Krzysztof Rybinski, the deputy CEO of NBP, Polish pension funds should have to right to further diversification and believes that the foreign equity allocation limit should be increased to 30%. Ludwig Sobolewski, the CEO of WSE, has an opposite opinion stating that Polish capital should not be exported and that the domestic equity allocation limit should be increased to 50%, so as to resemble the portfolio structure of a classic balanced fund. The representatives of the pension funds tend to agree between themselves that a division of domestic equity allocation should be made between the age structures of the beneficiaries and giving them the choice of less and more aggressive equity allocation. According to the representatives of the Ministry of Labour and Social Policy the pension funds have filed a motion proposing differentiation in terms of equity allocation depending on the beneficiaries’ age and it is currently being discussed.
Our view: We believe the news should have a neutral trading impact on the stock exchange. We find it positive that discussions about the equity allocation are taking place, yet we would not expect any major changes to be done at a short notice.