69th International Atlantic Economic Conference

March 24 - 27, 2010 | Prague, Czech Republic

Investor Relations in the Financial Market in Poland from the Perspective of Individuals

Saturday, 27 March 2010: 09:40
Danuta Dziawgo, hab., Ph.D. , Faculty of Economic Sciences and Management, Torun University, Torun, Poland
Objectives:

The process of integration into the one global financial market is taking place at the speed which requires the necessity of breaking certain social and economic barriers. Also in Poland we can see such a process of integration. But until now, investing money directly in securities in Poland by individuals has stayed at a relatively very low level.

At the same time it should be taken into consideration that efficient and stable financial market is the necessary foundation for new economy, as it is crucial for effective evaluation and capital transfer. Investor relations are one of the most important elements in such market building process.

Investor relations can be defined as a compilation of conscious, planned and systematic activities done by companies to establish and remain communication – especially on the financial level – between company and present investors as well as potential investors. Those activities should result in:

  • appropriate compliance,
  • relevant evaluation of securities,
  • investment risk reduction (specific risk as well as systematic risk),
  • creation of differentiated access to capital sources,
  • assurance of stability of financing for company as well as for its investment projects,
  • gaining and remaining stakeholders trust.

The aim of the elaboration is to draw attention to selected aspects of the investor relations in case of Poland. Poland can be viewed as an important country in transition economy concerning the number of citizens and the size of the market and in the same tome, the member of European Union.

Data / Methods

In one of the new EU countries – Poland, unique surveys have been conducted on a sample of Polish society. In this way, on one of the most important European emerging markets, the society’s level of trust to financial institutions, financial instruments and importance of investor relations was identified.

The major survey was conducted between September-October, 2009, on a representative sample of 1,012 Polish adults. That survey was conducted by the specialized institute MillwardBrown SMG/KRC.

The other survey was conducted on June 6-8, 2009 on the sample of 62 individual investors who participated in the ’Wall Street’ conference organized by Polish Individual Investors Association.

Results

The results of both researches aimed at an introductory reconnaissance of the investor relations quality in Poland. The results of the surveys can be useful in increasing the quality of communication with investors in the Polish financial market, as well as in other countries.

Conclusion

Modern society it more and more conscious of its rights and position as citizens, investors, clients, and consumers. Also, its economic and financial education increases. Therefore present society formulate more and more precise expectations towards companies, including those quoted on stock exchanges. As it can be seen in survey results, Warsaw stock quoted companies have to substantially raise the standard of market communication.

Meanwhile, individual investors confirm the investor relations importance for financial market and during the process of making investment decision. Moreover, for a high quality of investor relations, for company’s transparency, they are ready to pay some premium, which substantially confirms the importance of investor relations for present financial market.