Polish insurer PZU sees shares jump in initial public offering on Warsaw exchange

Polish insurer PZU makes strong debut on exchange

WARSAW, Poland — Poland’s largest insurer, PZU, made a strong debut on the Warsaw stock exchange on Wednesday in the ex-communist country’s largest initial public offering to date.

Shares closed 15.2 percent higher at 360 zlotys ($113) compared to an offer price of 312.50 zlotys ($98).

The sale of shares in PZU, or Powszechny Zaklad Ubezpieczen, is part of a broader plan by Prime Minister Donald Tusk’s government to privatize state-controlled companies in a bid to bring down the deficit.

The Polish state and the Netherlands’ Eureko BV, which have joint ownership of the company, put 30 percent of the company for sale the stock exchange. With the shares valued at 8.1 billion zlotys ($2.6 billion), it is the largest initial public offering, or IPO, in the 19-year-history of Warsaw’s stock exchange, which was born after the fall of communism.

The IPO is being watched by political and economic observers for what it says about investor confidence in Poland amid new economic turmoil in Europe sparked by a debt crisis in Greece that has raised fears of contagion to other countries.

The markets, however, were reassured when European policymakers unveiled a $1 trillion debt bailout package earlier this week that is aimed at preventing contagion.

The insurer’s CEO, Andrzej Klesyk, called the strong interest in buying company shares an “excellent achievement” given the turmoil on world markets last week.

The prime minister, Tusk, who attended the debut at the stock exchange, attributed the heavy interest to the strength of Poland’s economy, which was the only country on the continent to avoid recession amid the global downturn. Poland’s economy grew 1.7 percent in 2009.

Tusk said it underlined that foreign investors still have faith in Poland, calling it “a great day” for the country.

“This debut would not be possible were it not for the special position of Poland during the world crisis,” Tusk said.