Poland country-specific exchange traded funds popped Wednesday, breaking above their short-term trend lines, as the country recovers from a corruption scandal and pushes through ongoing tensions between Russia and Ukraine.
On Wednesday, the VanEck Vectors Poland ETF (NYSEArca: PLND) gained 3.0% and iShares MSCI Poland Capped ETF (NYSEArca: EPOL) rose 3.6%, both breaking above their short-term resistance at the 50-day simple moving average.
Polish stocks climbed to a three-week high Wednesday as political risks subsided. Poland’s equity markets retreated two weeks ago when the head of financial regulator KNF Marek Chrzanowski resigned over allegations made by Getin Noble Bank, Reuters reports. The anti-corruption agency CBA said it detained Chrzanowski, whom denies any wrongdoing.
Chrzanowski stepped down after the Gazeta Wyborcza newspaper reported he had sought a multi-million dollar bribe from billionaire banker Leszek Czarnecki. Czarnecki alleged Chrzanowski offered favorable treatment for his banks in return.
Concerns over a scandal that would drag down the banking system have since eased after the resignation.
Polish equities received further support from legislation that reversed legal changes concerning the Supreme Court, which led to a dispute with the European Commission.
Furthermore, Poland and other central European markets have been ruffled by the dispute between Russia and Ukraine over a naval incident, but some argued that the fallout was limited. Senior European politicians suggested new sanctions against
Moscow, but some diplomatic sources warned that the divided European Union was unlikely to reach a consensus on the matter.
“People mostly think that there will be no escalation which would lead to additional sanctions,” Noemi Holecz, chief analyst of Equilor Brokerage in Budapest, told Business Recorder.
Federal Reserve Chair Jerome Powell’s comments on Wednesday were also closely monitored as expectations for fewer Fed rate hikes could make Central European assets more attractive.
“What they have said so far (concerning interest rate prospects), have been mixed, but yes, the comments can have an impact,” one Budapest-based fixed income trader told Business Recorder.
For more information on the Polish markets, visit our Poland category.