iShares MSCI Poland ETF Holdings Ahead of Polish Elections (October 2023)
Poland stock picks that are the holdings of the iShares MSCI Poland ETF (NYSEARCA: EPOL) ahead of the upcoming Polish elections plus a reality check on popular or hyped holding Dino Polska.
This post takes a closer look at all the stock pick holdings (as of October 5th) for the Poland ETF:
iShares MSCI Poland ETF (NYSEARCA: EPOL)
P/E: 4.99 / Yield: 1.57% (Yahoo! Finance)
Poland is an interesting European country as its an economic powerhouse that maintains it’s own currency (the Polish Zloty is the most traded currency in Central and Eastern Europe) and it’s not completely under the thumb of Brussels (e.g. as the country has mostly seen long-term economic growth, etc.).
In addition, Poland is about to have elections (from IFES’s Election Guide calendar):
Poland Polish Sejm Oct 15, 2023 (t) Confirmed Oct 13, 2019
Poland Polish Senate Oct 15, 2023 (t) Confirmed Oct 13, 2019
Poland Referendum Oct 15, 2023 (t) Date not confirmed Sep 6, 2015
Western media already has a narrative and has taken a firm position on who they want to win or loose those elections as illustrated by this recent article:
Polish elections: who are the key players and what is at stake? (The Guardian)
First elected in 2015, the rightwing, populist and socially conservative PiS is widely accused of politicising the judiciary, turning public media into a party mouthpiece, using state assets to extend its grip on power, and fanning homophobia.
Whether that media narrative is accurate, right, or wrong will be be up to the Polish people to decide in the coming elections…
Some recent headlines that might also matter for foreign investors:
Exclusive: Polish main opposition seeks green push after October election (Reuters)
Poland's biggest opposition grouping plans to kick-start the country's lagging transition from coal if it wins next month's tightly contested election, the party's energy expert said.
The country's coal-dominated electricity mix translates into Europe's highest power prices, while a heavy carbon footprint could in the longer run hamper its potential to attract greenfield projects or to export power-guzzling products such as steel.
Poland's ruling party seeks referendum on privatization as it steps up attacks on opposition leader (AP)
Poland’s ruling party leader said Friday that Polish voters will be asked to decide whether they support the sell-off of state-owned enterprises in a referendum, saying it would be about “whether the wealth of generations will remain in Polish hands.”
Focus: How Poland snagged Intel's multi-billion dollar investment (Reuters)
Poland's third-largest city Wroclaw beat rivals last week to be home to the next multi-billion dollar Intel (INTC.O) chip factory in Europe, with a two-year campaign promising subsidies, infrastructure, talent and a slice of American life.
Here is a look at some key Poland economic data going into the elections:
Here is a look at the more recent performance of the Poland ETF covering the COVID period (the charts are linked back to Yahoo! Finance):
And the long term performance chart:
As for the Poland ETF itself, I don’t see any glaring flaws with it’s construction; but investors need to keep in mind that some of the stock holdings have exposure well beyond Poland and Eastern Europe - including exposure to Ukraine and Russia (through subsidiaries or exports to, etc.).
In addition, do note the Poland ETF is heavily exposed to the financial sector:
In general and while none have direct listings on the NYSE or NASDAQ (see our Poland ADRs page has more potential Polish stock picks with ADRs on the OTC plus links to some Polish media sites, etc.), most of the ETF’s holdings have listings on other European stock exchanges (or the OTC) - making it much easier to invest in them (Interactive Brokers also offers access to the Warsaw Stock Exchange).
This post is also a good opportunity to mention Poland ETF holding Dino Polska (WSE: DNP / FRA: 5Y2 / OTCMKTS: DNOPY) - a nationwide Polish network of medium-sized supermarkets, located in locations most convenient to customers (e.g. small towns, etc.). The stock has been coming up in our fund discussion posts and has increasingly been covered or discussed (or hyped…) by Substackers and podcasters (see our August 1st post for some links to some podcasts).
The latter is a bit of a red flag as growth now appears to be stalling (per the last earnings report) and it looks like the smart money has been taking profits:
At some point, just like with Wal-Marts and Dollar Stores in the USA (or 99 Speedmarts and K.K. stores in Malaysia, Indomaret and Alfamarts in Indonesia, etc.), they will run out of suitable and profitable locations to put new stores. And it’s unlikely they will be able to expand the concept eastward to Belarus or Ukraine while growth opportunities other countries in Eastern Europe may not come as easy as they did in Poland.
I also don’t know how long the commercial type refrigeration and freezer equipment used in stores (along with the A/Cs, heating systems, etc.) will realistically last for; but eventually they will all need to be replaced while the stores themselves will need to be constantly maintained and eventually remodelled. None of this is particularly good for future bottom lines or margins.
In other words, investors might want to look elsewhere for the next Dino Polska that might not be as heavily owned by foreign funds or is getting hyped talked about by Substackers and podcasters…
With that in mind and to make your life easier, this post includes:
A quick description of the stock holding with links to the IR page and stock quote(s) on Yahoo! Finance.
A link to any Wikipedia page (for what it might be worth…)
Forward or trailing P/E and dividend yields linked back to the Yahoo! Finance statistics page.
The latest long term technical chart linked back to Yahoo! Finance.
And as always, this post is provided for informational purposes only (and to make your life easier by providing you with relevant information, links, and charts). It does not constitute investment advice and/or a recommendation…
Alior Bank
Alior Bank (WSE: ALR / FRA: A6O) is a universal bank in Poland founded in 2008. It has been a subsidiary of insurance company PZU (WSE: PZU / FRA: 7PZ / FRA: 7PZ0) since 2015
Forward P/E: 6.31 / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
Allegro.eu
Allegro.eu SA (WSE: ALE / FRA: AL0 / OTCMKTS: ALEGF) is the most popular shopping platform in Poland and the largest e-commerce platform of European origin. Each month, 22 million customers visit the platform - equivalent to almost 80% of all Internet users in Poland. They can choose from over 250m offers at the most attractive prices with maximum convenience including fast and free deliveries under the Allegro Smart! programme, modern financial services (Allegro Pay), as well as Poland’s widest 50k pickup points network.
Forward P/E: 25.91 / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
AmRest Holdings
AmRest Holdings (WSE: EAT / FRA: 1QT / OTCMKTS: ARHOF) is one of the leading publicly listed European restaurant operators present in 22 countries in Europe and Asia. The Company began in Wrocław, Poland with the opening of the first Pizza Hut restaurant there.
AmRest operate 2,133 restaurants in five main categories: Quick Service, Fast Casual, Casual Dining, Coffee and Virtual brands. Since 1993, they have been building a portfolio of well recognized, power brands such as KFC, Pizza Hut, Burger King and Starbucks as well as unique proprietary brands: La Tagliatella, Blue Frog, Bacoa and Sushi Shop (developed as both Company operated restaurants and franchised stores). AmRest is also an owner of few virtual brands, whose offer is available only online (See: AmRest (WSE: EAT / FRA: 1QT / OTCMKTS: ARHOF): A Leading European Restaurant Operator Still Below Pre-COVID Highs).
Forward P/E: 98.74 / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
