Nawrocki's victory and the Warsaw Stock Exchange: In the short term, it may mean declines

Karol Nawrocki's victory in the presidential elections will probably be received negatively by foreign investors, as it means maintaining the impasse in the government-president relationship. In the short term, declines on the domestic stock market are possible - believe VIG-C Quadrat TFI managers.

The National Electoral Commission officially announced on Monday morning that Karol Nawrocki, supported by PiS, won the second round of the presidential election with 50.89 percent of the votes. KO candidate Rafał Trzaskowski was supported by 49.11 percent of voters. The turnout was 71.63 percent.

"Karol Nawrocki's victory maintains a certain impasse in the government-president relationship, which will probably be perceived by foreign institutional investors as slightly negative or negative, as it could herald changes in Poles' voting preferences in the near future," wrote Marek Kaźmierczak, senior manager of VIG/C-Quadrat TFI funds.

"For equity markets, this means that with valuations (for the Price/Book Value ratio) approaching two standard deviations above their 10-year average, the probability of realizing high profits from the domestic equity market and partial capital outflow has increased significantly," he added.

In his opinion, in the short term this may mean declines on the domestic stock market.

"This applies in particular to companies from the WIG20 index," wrote Marek Kaźmierczak.

Additionally - in the opinion of the manager - the shockingly successful attack by Ukrainian troops on Russian airports also means that the risk of further escalation of the conflict is increasing and will prolong any talks on a truce or peace.

"This may mean an increase in the risk premium for the domestic stock market (see: additional reason to sell shares)" - says Marek Kaźmierczak. (PAP Biznes)

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