Jan Cienski in Warsaw -

Ludwik Sobolewski is showing an entrepreneurial hustle as he takes the newly privatised Warsaw Stock Exchange on the road around Emerging Europe and as far away as Israel, in the hope of drumming up new listings. But with recent IPOs falling flat and a government less keen to sell off assets in these trying times for Europe's equity markets, the chief executive of the WSE faces an uphill task.

"We want to show that the WSE makes sense no matter what the conditions," says Sobolewski, sitting by a conference table in the exchange's modern Warsaw headquarters, just metres away from the old communist party central committee building that was the exchange's home when it started work in 1991. "Even if there is no concrete gain, we have to promote the idea that we are a regional market."

The result has been a steady stream of new listings on the WSE like Nova KBM, a Slovene bank, which first listed on the WSE in May.

Sobolewski has been particularly keen to lure listings from Ukraine. In May, the WSE attracted Ukraine's Industrial Milk Company, meaning it now has 10 Ukrainian companies and enough to create a separate national index for them. Sobolewski says he constantly travels there, trying to sell the advantages of Warsaw, which include the stability of an EU regulatory environment while also providing decent analyst coverage at a listing cost that is much lower than for larger exchanges like Frankfurt or London. The scheme has been successful enough that one Ukrainian company, Kernel, an agri-business, has made it onto the exchange's blue chip WiG20 index, the only non-Polish company on the list.

Sobolewski has also been trolling for business in Israel, which already supplies some companies on the WSE like Cinema City International, a Netherlands-based operator of multiplex cinemas with Israeli roots. "We get interest from small funds and some technology firms," says Sobolewski. "I hear from them that Warsaw could be a good bridge to Europe, the same sort of thing that I hear in Ukraine and Belarus."

Financial hub

Sobolewski's sales pitch is part of a strategy aimed at making Warsaw Central Europe's leading financial hub. Originally, the WSE was aimed at playing a purely Polish role - something at which it has succeeded better than any other post-communist regional exchange.

As it grew, Warsaw first hoped to grow by buying other exchanges, but was stymied because it was 99% owned by the state treasury, which put off potential sellers. By the time the WSE was privatised last year, rivals like Vienna had already done deals with most of the significant bourses in the region - forcing Warsaw to try to attract listings directly.

With a current market capitalisation (which includes both local and foreign companies) of more than €155bn, it has passed putative rival Vienna - with a market capitalisation of €90bn - and has left Prague and Budapest far behind. Now Warsaw is aiming to pass such exchanges as Istanbul and Oslo, where the market capitalisation is more than €200bn.

Part of the WSE's strength has come from the steady supply of companies being privatised by the Polish Treasury - the latest large privatisation being the sale a third of JSW, a coal miner, in June for €1.4bn. However, investors were badly burned by that IPO, as the share price has fallen by 35% in the last five months, denting the government's and the WSE's plans to foster a broader investor culture in Poland. "It would be hard to find someone today pleased with the share price of JSW," admits Sobolewski.

With the WSE falling in tandem with most other European exchange - the WiG20 is down 15.6% so far this year - the Treasury is less keen to sell off companies in the current environment. Plans to sell Lotos, the country's second-largest refiner, is in trouble, and the earlier planned sale of as much as 15% of PKO BP, Poland's largest bank, have been put on hold until next year. "The unprecedented situation we observe in the Eurozone is influencing the high rate of turbulence on global financial markets," said a statement from the Treasury. "A consequence of that turbulence is a limiting of the ability to successfully carry out a secondary public offering for the shares of PKO BP - what would have been one of the largest transactions in the history of the WSE - in the current year."

Smaller Polish companies are still choosing to hold IPOs on the WSE - which has seen 36 new listings so far this year - but the gloomy economic situation makes Sobolewski's task of ensuring a steady flow of significant new foreign listings to the Warsaw bourse even more crucial. "I think it still makes sense to list - as long as you're prepared to accept lower prices," he says.