A “battering” for Polish investors

Central Europe's new retail investors are learning that stocks can also go down. Since 2000, the number of small investors has rocketed as strong growth has lit a fire under equities. But thanks to the recent global turmoil, the region's new investors have now had "their first real battering", says Vanessa Gera in the International Herald Tribune.

In Poland, where by September 2007 the number of fund investors jumped to 3.3 million, or almost 10% of the population up from 2.4 million in 2006 funds were more exposed to equities than in neighbouring countries, so investors are especially rattled. January's withdrawals reduced the value of local funds' assets by around 8%.

Meanwhile, economic growth is solid, but set to cool from last year's 6.5% as interest rates rise to temper above-target inflation. Analysts reckon higher rates are set to slow the property market and hence bank earnings, while overall corporate margins have been falling, notes Thomson Investment Management news.

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And "the world economy is not supportive", as Tomasz Adamus of Credit Suisse says. So while the long-term outlook remains encouraging as the region converges with the EU, Polish stocks look likely to struggle this year.

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