Cashless China

     The total value of cashless transactions in China reached about 16 billion dollars in 2017 and was the highest in the world. Alipay boasts 500 million users, while WeChat Pay may have even 600 million people. The Chinese often use the services of both applications. Together they have over 90%. market share.

 

     For many years, Beijing has been restricting access to its market for foreign competition - Visa or Mastercard. Now, mobile payments are common and Chinese companies have an established position (also the China UnionPay card issuer). Cash payments are becoming problematic. Even the People's Bank of China was concerned, in July it issued a statement that the yuan is an official currency in the PRC and sellers can not refuse to accept cash.

 

    According to the data of the Bank for International Settlements, household debt in relation to GDP increased in China from 17.9%. at the beginning of 2009 to 49.3 percent at the end of the first quarter of 2018. In no other country, the growth rate of household debt was so large. As a result, the statistical Chinese has a higher amount of debt than its annual disposable income.

Semi-Annual Report of PKO BP (Poland)

     PKO BP is Poland's largest bank. 

    The net profit of the PKO BP group in the second quarter of 2018 increased to PLN 933 million from PLN 857 million a year earlier - the bank reported in a semi-annual report. The bank's profit was in line with market expectations.

    Net profit in the second quarter increased by 9 percent year-over-year and 23 percent qoq.

    In the first half of 2018, the net profit amounted to PLN 1690 million, ie it increased 22.3%. yoy. Net ROE is 9.5 percent.

    The bank's net interest income in the second quarter amounted to PLN 2291 million and was in line with analysts' expectations. The interest income increased by 8 percent yoy and 3 percent qoq.

    The total capital ratio of the PKO BP group is 17,4%, and Tier 1 capital ratio is 16.12%.

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PKO BP provides services to individual and business clients. The core business activity of PKO Bank Polski is retail banking.

Russia: Turning point for the currency

       The sanctions turned out to be meaningless?

    The Bank of Russia announced a decision to stop the intervention on the forex market until the end of September. This decision of the regulator has been a turning point for the market, after which the ruble began to strengthen steadily. In addition to reducing the demand for currency as such, the very fact of such a decision had a positive impact on the market, as it demonstrated the Bank of Russia's interest in stabilizing the exchange rate of the national currency.

    The price of Urals oil grew by 7.4% to $73.8 per barrel last week, and is near the maximum for the last four years. The discussion on sanctions is still a minor issue, since the main directions of sanctions are already known, but it will hardly be possible to adopt them in the form of a law until November. However, as the intermediate elections in the US Congress approach, the sanctions pressure on the ruble will increase, as there are no prerequisites for mitigating them.

    In the autumn, the ruble will be affected by the factor of payments for foreign currency-denominated debt. However, the payments by the end of the year will amount to a non-critical amount - $34 billion. Most companies have sufficient currency reserves for debt servicing. Problems with the repayment of debts will not impact the ruble rate, many commentators indicate. 

    As a result of Friday's trading, the dollar rate was fixed near the level of 67 rubles/$. 

FTSE Russell: list of Polish companies

     FTSE Russell published the final list of 37 Polish companies that will be included in the developed markets indexes, after the September reclassification of the Polish market to the developed status.

    Below is a list of companies according to the size category assigned by FTSE Russell.

(large cap): PKO Bank Polski
(mid cap): PKN Orlen, Grupa Lotos, PGE, PGNiG, KGHM Polska, Bank Pekao, PZU, BZ WBK, mBank, LPP, Dino Polska, CD Projekt, Cyfrowy Polsat.
(small cap): Bank Millennium, AmRest Holdings, Bank Handlowy. JSW, Alior Bank, CCC, Play Communications, Orange Polska, Grupa Azoty, Enea, Tauron Polska Energia, Kernel Holding, Kruk, Asseco Poland, Budimex, Eurocash, Ciech, Energa, PKP Cargo, Lubelski Węgiel Bogdanka, GPW, Boryszew, Neuca.

    
     Reclassification of the Polish market to the status developed by FTSE Russell will come into force on 24 September.

    Poland's share in the Russell All Cap Developed FTSE index will amount to approximately 0.154 percent.

National Bank of Poland: Growth perspectives

     A further increase in consumption and gradual take-over of the investment burden by private enterprises from state and local government investors are the dominant trends for the coming years. Despite a slight weakening of exports and real consumer incomes, there are no serious threats to the Polish economy on the horizon. In the next 30 months, the Polish economy is expected to grow faster than the economies of other EU countries.

 

     "The Polish economy works on several engines. Consumption is still the largest contributor to growth. We have an excellent situation on the labor market, rising salaries, good consumer sentiment ", says Jacek Kotłowski, deputy director of the NBP Economic Analysis Department. "But the second engine which are investments is also turned on. At the beginning, these are mainly public finance sector investments, financed from EU funds, but step by step more and more private company investments are launched. The third engine is export which is slightly weaker in the recent period due to the fact that the growth in the EU has slowed down."

     The Polish economy will develop at a rate of 4.6 percent - an increase of 0.4 percent compared to the previous estimate of March this year and a result identical to that from last year. The data for the first half of the year published by the Central Statistical Office shows that in the first six months of the year GDP increased by 5.0-5.2 percent. This means that this year, for the first time, the value of Polish GDP will exceed PLN 2 trillion.

     Although the next years will bring a slower growth, the result of 3.8 percent in 2019 and 3.5 percent in 2020 is impressive. The euro area countries will record over a half weaker growth.

     According to the National Bank of Poland, wage growth currently remaining at around 6 percent rate should accelerate to 7 percent; the slowly rising inflation will somewhat limit spending growth. This year, average prices should increase less than in the previous year, when the average annual inflation was 2 percent. In 2019 and 2020 it will be higher (2.7% and 2.9% respectively), but still within the acceptable range of fluctuations in the inflation target (2.5% +/- 1 percentage point).

     - We have been observing a slightly higher dynamics of commodity prices recently, which on the one hand results from a slightly weaker exchange rate, on the other hand, from a slowly growing inflation in the world. The price dynamics of services, which were usually a factor that pulled inflation, decreased slightly. The last few months saw the fall in prices in industries such as insurance, mobile telephony, radio and television subscription, and they have affected this slowdown - explains the representative of the Department of Economic Analysis of the National Bank of Poland. - In our opinion, these were rather temporary factors and in the coming months or quarters we expect a slow rise in inflation, but to a relatively low level.

     "We see threats outside the Polish economy. We do not know how fast the world economy will develop, we have some signs of a slowdown from the euro zone. We think that they are temporary to a large extent. The economy of the euro zone will slow down, still maintaining a high rate of growth, however it can not be ruled out that the slowdown in the pace of growth will be stronger. There are certain protectionist measures that, for now, have a more media character, but if they were to develop, they would be a risk factor.", says NBP Economic Analysis Department.