Warsaw Stock Exchange announces new updates the Alerts List and Lower Liquidity Zone Main Market in Equities

Warsaw Stock Exchange (GPW) has included six companies at the end of Q1 2020 with average price less than PLN 0.10 in the last three months. The Lower Liquidity Zone has reported stock of 50 issuers. The update announcements are the first under the new rules came in action in the beginning of the year. The modifications aim to improve the rules in low liquidity stock trading level and penny stocks to adjust the rules with the new tick sizes on the equity market.

The first classification of companies in the Alert List on the Main Market in Equities was held last Friday. Only six companies were put on the list instead of the 34 that was previously included. The Lower Liquidity Zone includes stock of 50 companies (previously 51). Last October, the GPW Management Board made steps to change the rules for classification of companies on the GPW Main Market in the Alert List and the Lower Liquidity Zone effective 1 January 2020.

Warsaw Stock Exchange gpw

Piotr Borowski, Member of the GPW Management Board commented:

Piotr Borowski

We have decided to introduce the new rules for the classification of companies in the Alert List following the introduction of new tick sizes for shares on GPW (with a precision of four decimal places), which took effect in March 2019 enabling more effective valuation of penny stocks. To address investors’ expectations, we have decided not to suspend trading in those stocks which are put on the Alert List for at least a sixth time.

As of 1 April 2020, such stocks will be listed in the single-price auction system with one fixing per week. The new rules of classification of companies in the Lower Liquidity Zone support the liquidity of trading and price formation of stocks without having much impact on the number of stocks put in the Lower Liquidity Zone.

The new rules mandate that stock with average price understood as the arithmetic mean of closing prices in the last three months is less than PLN 0.10 (previously PLN 0.50). Trading stock on the Alert List for at least for sixed time in a row will not be suspended but listed in the single-price auction system with one fixing per week. This includes classification under the previous rules.

The new rules also state that stocks in the Lower Liquidity Zone have number of transactions in a stock less than five transactions per trading session at more than one half of all trading sessions in the last three calendar months preceding the periodic verification.

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