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Poland – Israel
Business Cooperation Overview
Warsaw, June 2012
Israel – Macroeconomic Background
ISRAEL
Unit
Period
Value
GDP volume
billions of €
2011
174.71
GDP per capita
€
2011
23,007
% y/y
2011
4.80
Annual inflation rate
%
2011
3.2
Current inflation rate
%
May 2011
4.10
Unemployment rate
%
2011
5.60
Current unemployment rate
%
March 2012
6.90
Annual industrial output
% y/y
2011
3.20
Industrial output
% q/q
1Q 2012
-2.80
Total imports
billions of €
2011
50.78
Total exports
billions of €
2011
44.95
GDP growth rate






Population
Area
Currency
Capital
HDI ratio
FX reserves
7,869,900
22,072 km2
Shekel
Jerusalem
0.888
76.63 billions of €
Source: Embassy of The Republic of Poland in Tel Aviv
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Poland – Macroeconomic Background
ISRAEL
Unit
Period
Value
GDP volume
billions of €
2011
382.5
GDP per/capita
€
2011
10,068
GDP growth rate
% y/y
2011
4.30
GDP growth rate
% q/q
4q 2011
1.10
Annual inflation rate
%
2011
4.60
Current inflation rate
%
March 2012
3.90
Unemployment rate
%
2011
12.50
Current unemployment rate
%
March 2012
13.30
% y/y
2011
7.70
Total imports
billions of €
2011
150.5
Total exports
billions of €
2011
135.8
Annual industrial output






Population
Area
Currency
Capital
HDI ratio
FX reserves
38,501,000
312,679 km2
Polish Zloty, PLN
Warsaw
0.813
70.2 billions of €
Source: Central Statistical Office (GUS)
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Israel Stock Market
Tel-Aviv Stock Exchange Market capitalization 1999 - 2012 (€
m)

180
160
140

120
100
80
60
40

20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Tel-Aviv Stock Exchange
Warsaw Stock Exchange
Source: Stock Exchange in Tel Aviv



The number of listed companies on Israeli Stock
Exchange has been remaining on the stable level for 8
consecutive years (about 600 units) and drop slightly
in 2012
In the same period the number of listed companies on
WSE went on the upward trend. There are 808 listed
companies on regulated and alternative market (21 of
them are foreign companies)
Average market capitalization on Tel-Aviv Stock
Exchange stands at €298.43 m while on Warsaw Stock
Exchange €151.19m
Situation on both capital markets has been
following the same trend during last decade.
Capitalization of Israeli Stock Exchange was
exceeding Warsaw Stock Exchange by 50 percent
Since 2006 both stock exchanges incurred
damages due to global financial turmoil.
Capitalization of both markets dropped by about
40 percent
In 2012 effectiveness of both exchanges reached
levels of ca. 170 billions of EUR and 120 billions
of EUR retrospectively
Number of listed companies (2002-2012)
900
800
700
600
500
400
300
200
100
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Tel-Aviv Stock Exchange
Source: Stock Exchange in Tel Aviv, Warsaw Stock Exchange
Warsaw Stock Exchange
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Foreign Trade – Facts and Figures
1/3
Balance of Trade: Poland - Israel 2007 - 2011
(€ m)
Balance of Trade: Poland – Israel
Position ( € m)
2007
2008
2009
2010
2011
Exports from
Poland
156.01
225.91
269.51
265.02
283.41
Imports to
Poland
240.62
600
500
400
Exports
300
284.95
211.63
246.55
266.29
Turnover
396.62
510.86
481.14
511.58
549.69
Balance
- 84.61
- 59.04
57.87
18.47
17.12
Imports
200
Turnover
100
Balance
0
100
2007
2008
2009
2010
2011
200
Source: Polish Ministry of Economic Affairs





Source: Polish Ministry of Economic Affairs
After the financial crisis in 2009, that has been the first plummet year in trade volume between Poland and
Israel, 2011 brings a strong and rapid revival especially on the Polish exports side. Moreover, Poland as the only
one country in EU reporting growth in 2009 gained in the eyes of Israeli businessmen and currently is
perceived as a stable country with great development and expansion perspectives
In 2009 Poland has been in the black for the first time since many years in terms of Polish – Israel trade
exchange
Imports to Israel stood at €283 m that makes 7 percent jump compared with 2010
Imports to Poland stood at €266 m that makes 8 percent jump compared with 2010
In 2011 exchange with Poland amounted to ca. 0.4% of Israeli balance of trade turnover
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Foreign Trade – Facts and Figures
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 Poland – Israel exchange has concentrated since many years on some group of goods. Poland
imports from Israel mainly:


Chemical products including insecticides and herbicides, phosphates, cosmetics, medicines, organic sulfur
compounds). These products accounted for 29.1 percent of all Polish imports from Israel
Electromechanical products including integrated circuits, apparatus for telephony and wireless telegraphy,
signaling apparatus, instruments and medical equipment, car parts and accessories etc. These group
accounted for 25.6 percent of total imports from Israel
 Polish exports to Israel mainly follow product groups like:





Means of transport with 23.1 percent in total exports
Agricultural and food products (20 percent of total exports to Israel) including soft drinks, sweets,
chocolate, beef etc).
Electromechanical products (chassis for vehicles, accumulators etc.) – 16 percent share in total exports to
Israel,
Chemical industry products including medicines, cosmetics, preparations for oral hygiene. Products
represented 10.2 percent of exports volume 3
Moreover, among the major commodity groups in the structure of Polish exports to Israel are other
products like wood, paper and furniture
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Foreign Trade – Facts and Figures
2011 Polish exports to Israel by sort of products (%)
17%
23%
Vehicles and parts


Food articles
7%
Machinery
7%
Chemical products
20%
10%
16%
Paper articles
Animal Products
Other

3/3
In 2011 23 percent of Polish exports was
generated by vehicles and parts
20 percent of trade volume was created by food
article export such as beverages, baking articles
etc.
The greatest exporters to Israel are: Man Star
Trucks&Buses, XL Energy Marketing, Eko-Vit,
Mondi Świecie, PLL Lot, Basell Orlen Polyolefins,
Ferrero Polska, Celsa „Huta Ostrowiec”, Zakłady
Metalowe „Mesko”
Source: Polish Ministry of Economic Affairs
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

2011 Polish imports from Israel by sort of products (%)
In 2011 29 percent of Polish imports from Israel
was generated by chemicals such as pesticides,
cosmetics etc.
26 percent of trade volume was created by import
of electrical devices including integrated circuits,
engines, turbines etc.
Main importers from Israel are: MakhteshimAgan, Bumar, AB, Iscar-Poland, Teva Kutno,
Fresh World-International, ABC Data Holding,
Jeronimo Martins, Eurocast, Hortex Holding
Chemicals
20%
29%
Electrical devices
5%
Guns and ammo
7%
Guns and ammo
Food products
7%
7%
26%
Textiles
Other
Source: Polish Ministry of Economic Affairs
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Access to the Israeli market
 Israel is a member of the WTO, OECD and is an associate member of the European Union.
Poland signed with Israel free trade agreement. Only in relation to agricultural products there are
some restrictions in the form of tariffs or quotas. Polish exporters are treated on a par with
exporters from other countries and there was no application of the specific barriers in this
regard
 A special type of market access limitation is requirement of kosher. This barrier results from the
religious character of a country. Consequently, pork and its products can not be a subject of
export to Israel. Generally, for most food (except from meat), lack of kosher certificate is not a
problem in imports. It should be emphasized that many Polish products posses kosher
certificates, yet Israeli importers willingly cooperate in the field of certification, often incurring
necessary costs
 Trade procedures, customs and import requirements used in Israel are complied with those of
EU
 As far as sanitary, phytosanitary and veterinary requirements are concerned, it occurs to be
complex to reach any design of necessary certificates. Any products being exported to Israel
must meet local standards set by The Standard Institution of Israel. It is the role of Israeli
importer to obtain a certificate for particular product
 Isreal runs restrictive policy in terms of foreign citizens employment as well as consistent policy
of illegal immigrants deportation. Legal employment is possible after obtaining visa with work
permit. Such an option is available only in selected sectors of Israeli economy
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Capital & Investment Cooperation
 According to the Central Bank of Poland (NBP) the inflow of direct investment from Israel to
Poland in 2009 stood at € 13.9 m. Thus, Polish total net outstanding liabilities from Israeli direct
investments amounted to € 119.6 m
 The most significant Israeli investors active on Polish market are:

Egged – TSL sector company

Super Pharm – network of pharmacies

Agan Makhteshim – chemical company that acquired Rokita Agro and TEVA investment
into Polfa Kutno
 Official statistics concerning Israeli investment in Poland differs from estimates. Israeli capital
involved in all Polish projects and ventures is expected to reach from 1.51 to 3.8 billions of €
 A host of Israeli investors take advantage from Polish tax preferences by investing their financial
resources into Polish economy via subsidiaries in Western Europe or in the USA
 Other active players on Polish market:

BST, Sorbit, Link 4, Cinema City, GTC, Plaza Centers, Ronson, Yona Group, Karen GAP,
ECI Telecom – Tadi Pol, Elite, Eden, Multilock
 The most lucrative sector for Israeli investors is real estate. Developers supported by Israeli
capital run their investments in main business regions in Poland e.i. Warsaw, Wroclaw, Poznan,
Crakow, Łódź
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Development of bilateral cooperation
 Department of Trade and Investment Promotion (WPHI) as well as economic
department of the Polish Embassy in Tel Aviv take steps to strengthen business
relation between Poland and Israel
 Mentioned actions are aimed at arousing an interest of Israeli importers, enterprises
and institutions with Polish market. WPHI participates annually in informational and
promotional events such as fairs, conferences, seminars, meetings taking benefit from
the opportunity to present the offer of Polish companies, culture and investment
perspectives
 Stimulation of the Polish – Israeli economic cooperation is conducted also through
providing detailed information concerning procedures, requirements and provisions
for running business in Poland and Israel
 Undisputed role in the process of building Polish – Israeli business cooperation is
credited to WPHI department in Tel Aviv which regularly publishes offers of Polish
exporters, Israeli importers etc
 WPHI maintains ongoing contacts with Institute of Export and International
Cooperation, Federation of Israeli Chambers of Commerce, Business Association of
Israel, Polish-Israeli Chamber of Commerce
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Situation on Polish financial market
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 The greatest impact on the market participants was inflicted by:

fiscal situation in the so-called peripheral euro zone countries (PIGS region)

inflow of negative macroeconomic signals from U.S., EU and China

effects of earthquakes in Japan
 Negative trends around the world caused an increase of investors risk aversion, what
was reflected in the trading of foreign exchange, shares and commodities indices
Rates of 5 – year CDS 2006 – 2010 (basis points)
Yield of 10 – year Treasury Bonds 2006 – 2010 (%)
17
1500
14
1200
8
900
5
600
2
300
2006
2007
Poland
Spain
Source: KNF
2008
Hungary
Germany
2009
2010
2006
2007
Poland
Greece
Greece
USA
2008
Hungary
Spain
2009
2010
Germany
Italy
Source: KNF
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Situation on Polish financial market

Credit Default Swap is a form of insurance that
protects the buyer of the CDS in the case of a
loan default. If the borrower defaults (fails to repay the
loan), the lender who has bought traditional insurance
can exchange or "swap" the defaulted loan instrument
(and with it the right to recover the default at some
later time) for money - usually the face value of the
loan.
Credit default swaps have existed since the early 1990s,
and increased in use after 2003. By the end of 2007,
the outstanding CDS amount was €45.48 trillion, falling
to €26.22 trillion by the end of 2008

2/2
Comparison of spreads for 5 – year bonds (points)
4000
Source: KNF
Greece
Spain
Germany
3000
Poland
Portugal
USA
2000
1000
2010.02.24
2010.08.09
2010.12.23
2011.04.09
2011.08.12
Rates on money market 2006 – 2010 (%)
Interest rates of Central Banks 2006 – 2010 (%)
6
6
4
4
2
2
0
0
2006
2007
NBP
2008
ECB
2009
FED
2010
2006
2007
2008
WIBOR3M
LIBOR CHF 3M
SNB
Source: KNF
Source: KNF
2009
2010
EURIBOR 3M
FRA 6 x 9
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Macroeconomic Review of Poland
GDP growth. Poland is the only one country in European Union that reported positive growth rate in three consecutive years during
financial crisis and its repercussions. Real GDP growth in 2010 reached 3.8 % y/y. In 2011 GDP growth rate is expected to reach 4.3%.
Accumulated GDP growth in 2008-2011 amounted to 15.8%, and was the highest in the EU.
Unemployment rate. After reaching peak value at 13.4% in February 2011, the unemployment rate took on a moderate downward trend.
Throughout the 2012 it oscillated a bit under 12% to reach 12.5% in December 2011. An average unemployment rate in 2010 stood at
12.4%. According to the Ministry of Labor and Social Policy unemployment rate at the end of 2012 will remain constant and amount to
12.3%. However some international organizations like IMF or EC expect the rate to go south and reach single-digit number. It may be
caused by the final stage of preparations of UEFA Euro 2012 which are likely to generate significant number of jobs, especially in
hospitality industry.
Inflation rate. The Consumer Pricing Index in 2010 stood at 2.6%. Yet from the beginning of 2011 index has been permanently rising to
reach 4.5% in December. An average inflation rate in 2011 amounted to 4.3%. According to the NBP’s latest inflation central path
projection the CPI will stand at 4.1% in 2012 and decrease to 2.9% in 2013 and 2.0% in 2014.
Public finance. Public debt level as a percentage of GDP volume stood at 55.40% in 2010. In 2011 it amounted to 56.4% of GDP.
Accumulated public debt growth in 2008-2011 accounted for 5.8% (excl. Open-End Pension Funds) which is one of the best scores in the
EU.
PMI Index. In December 2010 PMI level reached a 6-year-high at 56.3 points. Such an optimistic level reflects the flourishing condition
of Polish economy. Levels over 50 points mean upswing, whereas results below 50 points designate contraction in economic growth. At the
end of 2011 PMI Index reached a level of 48.8 points which is a local bottom.
Individual consumption. An index in 2010 reported a positive contribution of 3.2%. Over 2011 the index followed a moderate upward
trend to reach 3.4% in December.
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Polish Capital Market


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

Market capitalization of Warsaw Stock Exchange reached a peak in May
2011 of €152 b. In December 2011 it dropped by 27 percent to €108b
from May peak.
WIG 20 (index consisting of 20 biggest Polish companies) dropped by
23 percent from 2750 (January 2011) to 2100 points (May 2012)
Average P/E of companies listed on WSE slipped from 16.40 in May
2011 to ca. 8 in May 2012, while average P/BV ratio dipped from 1,56 in
May to 1.10 in August
Share prices of all listed companies are currently underestimated what
can encourage investors to submit purchase orders due to price increase
expectations and bear market turn-around
Capital market experts believe that now is a perfect time for companies
to acquire at least minority stake in the most prospective firms due to
low valuations
WIG 20 P/E ratio (2011 – 2012)
Jun
Source: stooq.pl
Jul
Aug
Sep
Oct
1/2
Market Capitalization of Warsaw Stock Exchange in 2011-2012 (billions
of €)
160
150
140
130
120
110
100
90
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Market Cap. 142 142 145 152 152 145 145 126 108 117 109 108 121 126 125 122
Source: WSE
WIG 20 P/BV ratio (2011 – 2012)
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Source: stooq.pl
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
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Dąbrowski Finance cooperation with Israel
 Dąbrowski
Finance
has
wellestablished business relations with
Israeli investors and entrepreneurs
 Company currently implements Real
Estate projects for huge Israeli investor
 Dąbrowski Finance represents the
Israeli clients applying to one or more
banks or other financial institutions for
financing
 At every stage of the process, DF
cooperates closely with the customer
both in drawing up documentation and
applying for credit
 DF actively supports the customer in
creating
credit
documentation,
especially in defining covenants, i.e.
obligations to act or to refrain required
by the bank
Our customers in Poland and in
other European markets:
We have also established business relations
with USA, China and Israel
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DF Team
Jarosław Dąbrowski
Zbigniew Karwowski
Founder and Managing Partner Vice President of the Board
Piotr Buszka
Partner
Marcin Zieliński
Partner
15 years of experience in the
financial sector
Over 16 years of experience in the
financial sector
16 years of experience in
the financial sector
Legal Counsellor. 16
years of experience in the
financial sector
Banking. finance and investment
Banking. leasing and
factoring
Commercial law
Investment funds and
banking
Adam Mickiewicz University
in Poznań. Faculty of Law and
Administration
Warsaw School of Economy,
Faculty of Finance and Banking
The University of Warsaw. Faculty of
Law and Administration
Edinburgh University Management
School
University of Navarra (IESE) in
Barcelona
Pedagogical University of
Cracow. Degree in Modern
History
Georgetown University in
Washington
University of Wisconsin in the
College Business Administration.
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Disclaimer
The contents of this presentation of the company DF Ltd.. have been collected and prepared
to the best knowledge of the author and on the basis of reliable sources. All the presented
opinions and assessments of the current market situation express the opinions of the author
at the moment of preparing the presentation
DF Ltd. shall not bear responsibility for decisions met on the basis of the contents of the
presentation. The Presentation is of solely informative character and its contents should not
be regarded as advertisement. offer or endorsement to buy or sell any services or products
The document shall be treated solely as marketing material. it should not be regarded as an
offer. advice or investment recommendation or independent financial analysis
All trademarks and brand names mentioned in the presentation are subject to relevant legal
provisions. The trademarks or brand names might have been reserved solely for information
purposes. Using the trademarks included in the presentation requires the explicit written
consent of the authorized entity
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We strongly invite you to do business with DF
in Poland and CEE
Dąbrowski Finance Ltd.
Trust & Professionalism
Metropolitan Building
1 Piłsudski Square, 3rd floor
00-078 Warsaw
Tel.: + 48 22 344 04 00
Fax: + 48 22 344 04 10
E-mail: [email protected]
www.dabrowskifinance.eu
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