The Warsaw Stock Exchange (GPW) has launched a new equity index – the CEEplus Index – which covers the largest and most liquid equities listed in key Central and Eastern European (CEE) countries that are part of the ‘Three Seas Initiative’.

The 2018 Three Seas Initiative summit in Bucharest. © three-seas.eu

The Three Seas Initiative has twelve member states along a north-south axis from the Baltic Sea to the Adriatic Sea and the Black Sea. Its objective is to enhance cooperation with regard to infrastructure projects in the region.

The new index consists of stocks from companies listed in seven countries that are part of the Three Seas Initiative: Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia.

To be eligible for selection, a stock must satisfy a liquidity requirement of having a daily trading value greater than €90,000 over the past six months.

Constituents are weighted by free float-adjusted market capitalization with the weight of the largest stock capped at 10% and the aggregate weight of stocks with more than a 5% weight capped at 40%. Additionally, stocks from any single country will be capped at 50% (in practice, the cap applies to stocks listed in Poland).

The index is suitable to serve as the underlying reference for investment products such as ETFs.

Political backing

Mateusz Morawiecki, Prime Minister of Poland, commented, “The launch of a joint exchange index for companies in the V4 countries – Croatia, Romania, and Slovenia – is a major step towards closer regional co-operation, which opens the region to the world.”

Jerzy Kwieciński, Poland’s Minister for Investment and Development, said: “The value of the Three Seas market and its demand for capital are such that infrastructure investments in the region alone will range from EUR 200 billion to EUR 1.1 trillion by 2030. If you look at the investment map of the world, we have put in a very prominent pin.”

Marek Dietl, President of the GPW Management Board, added: “More and more investors are looking for diversified investment opportunities involving Three Seas region blue-chips. The Polish capital market is one of the world’s 25 developed markets and it is our mission to promote Three Seas companies.”