The Poles want to list companies from the BSE on the Warsaw Stock Exchange as well

Reporter: Poland is seen as an example of successful privatizations. What would be your advice for the Romanian authorities, who have agreed with the international financial institutions to list some of the state owned companies?

Pawel Tamborski: I am certain that it has every chance of fulfilling the privatizations program. Romania has everything it needs for a future development - a well educated workforce, incentives for investing in business and a good location. Considering all this, it is easily visible that Romania is now faced with challenges similar to those faced by Poland a few years ago. Some of them are the issues concerning the swiftness and effectiveness of the privatization process, and the communication of these processes to the citizens and local communities, which could have certain fears.

How did Poland go about it? One of the main goals of the Polish privatization process, successfully achieved by the Government of Donald Tusk in 2008, is to focus on developing Warsaw as the leader of capital market in the Central and Eastern European region.

In order to support this, our strategy was to conduct the major privatizations through the Warsaw Stock Exchange.

In 2010 alone, we have conducted some of the biggest IPOs in Europe of such "blue-chip" companies, such as PZU (the biggest Polish issuer), Warsaw Stock Exchange and Tauron PE (energy provider). To those, we can add numerous other secondary offers. In 2010, Poland's state budget earned 22.04 billion zlotys in revenues from privatizations, in 2011 - 13.05 billion zlotys and in 2012 - 9.1 billion zlotys. (1 zloty=0.24 Euros)

That wouldn't have been possible without the strong support of the Polish government for the development of the equity market.

The Polish pension system has also been an instrument which helped the expansion of the stock market, as it has also been an active and significant participant in the privatization transactions.

Furthermore, we have succeeded in attracting a large investor base, which is increasing the free-float of the Polish companies listed on the WSE.

Reporter: The expression "We won't sell our country" was very popular after the 1990s and it seems to be regaining popularity lately. Do you think that the sale of stakes in state owned companies to foreigners brings benefits or disadvantages?

Pawel Tamborski: I have no doubts that the commitment of the foreign capital is beneficial for everybody - businesses, capital market and the national economy as a whole.

The question is how you commit this capital. If a national company is sold to a foreign multinational, then the citizens might feel that the process is happening behind closed doors. They might have the feeling that they are losing something. That is why, for us, privatization through the stock market is the most transparent process. The government is selling its shares, but everything happens in plain sight and every citizen is welcome to become a co-owner. It is a typical "win-win" situation. Once public, the company creates value for shareholders, who closely watch the actions of the management. This helps the creation of an environment of mutual understanding.

Reporter: Do you feel that there are certain sectors that should remain under the control of the state? Which would they be?

Pawe³ Tamborski: Generally, I have no doubts that in general, the private sector is more effective than the state as an owner, that is why I believe that in the coming years the Polish privatization should conclude. Still, we have identified 47 entities of strategic importance for the national economy, for which the full privatization is impossible at the moment or is limited. They are mostly companies in the energy and resources sectors, as well as companies operating in defense, media (radio and public television) and cultural monuments.

I repeat, the fact that they are not 100% privatized does not mean that we can't sell stakes in them on the stock exchange, while at the same time keeping a stake in the company. It is also possible that after the revision of some government strategies, in the future, some companies- for example in energy - would be completely privatized.

Reporter: Do you feel that 2013 is a good moment for Romania to sell stakes in the major state owned companies?

Pawe³ Tamborski: Of course. There are many positive aspects which have an impact on the market, such as the potential of the Romanian economy to develop and a government which openly communicates the necessary reforms and the privatization needs of the economy.

Of course every privatization case - every company and sector - requires particular consideration.

What is currently ideal for energy and resources may not be optimal for construction or real estate. The key is to continuously analyze the market and the dialogue with investors. The moment you feel that the opportunity is arising to sell the shares at a good price, don't hesitate.

Reporter: The local pension funds have been one of the driving factors behind the liquidity of the WSE. What stimuli do you see on the Romanian stock market, which is far less developed?

Pawel Tamborski: I think that for the local investment funds, banks, private investors and international institutional investors, there is an opportunity to play a key role on the stock market. What could definitely help the Romanian stock market are the dual listings of the Romanian companies on international markets. This could increase the liquidity of Romanian companies through better recognition among institutional investors. Also, another advantage of the Romanian market is the high local demand. It's the same in Poland, and the stock market has used that. We have also launched a program for encouraging citizens to invest on the stock market, while at the same time teaching them the mechanisms of the market. So far, this program has been successful.

Reporter: At a conference in Romania, last year, you said that the government should take care of the development of the stock market. In Romania, the stock exchange is private, so the interest from the authorities is low. What would be the benefits for the government of having a strong stock market?

Pawel Tamborski: There are many positive aspects that are worth mentioning, including the alternative sources for attracting capital for companies and increased transparency for businesses. For us a strong and transparent stock market is the core and the symbol of a strong economy and transparent business relationships.

The environment of the stock market persuades companies to fulfill the standards of corporate governance. These standards are being adopted by an increasing number of companies, even by those that aren't listed. We have no doubts that a strong stock market in Poland has increased the need for transparency throughout the entire economy.

On a practical level, you need a strong and reliable stock market for companies to attract capital. Otherwise, they wouldn't be able to develop or to emigrate to other markets in the region.

Reporter: Warsaw Stock Exchange has a program to attract foreign issuers. Do you consider that the WSE can attract dual listings from Romania?

Pawel Tamborski: We are already cooperating with certain Romanian companies and we have many offers. We can offer Romanian companies a large and diversified range of investors, versatile products and an international friendly infrastructure of compensation and settlement.

We need to create an operational system that will connect the Romanian and Polish depositories. This will allow the clearing and settlement of the stock trades of companies listed in Warsaw, as well as in Bucharest.

ADINA ARDELEANU