{"id":104963,"date":"2017-04-19T10:19:15","date_gmt":"2017-04-19T14:19:15","guid":{"rendered":"http:\/\/countingpips.com\/?p=104963"},"modified":"2017-04-19T06:19:42","modified_gmt":"2017-04-19T10:19:42","slug":"the-truth-behind-polands-growth-surge","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/04\/the-truth-behind-polands-growth-surge\/","title":{"rendered":"The Truth Behind Poland\u2019s Growth Surge"},"content":{"rendered":"<div id=\"inves-1720575906\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">April 19, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p>By <a href=\"http:\/\/WallStreetDaily.com\/\"><u>WallStreetDaily.com<\/u><\/a> <img loading=\"lazy\" decoding=\"async\" class=\"attachment-home-th size-home-th wp-post-image\" style=\"display: block; margin-bottom: 5px; clear: both;\" src=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/0417_poland_feature.jpg\" sizes=\"auto, (max-width: 580px) 100vw, 580px\" srcset=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/0417_poland_feature.jpg 580w, https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/04\/0417_poland_feature-300x155.jpg 300w\" alt=\"The Truth Behind Poland's Growth Surge\" width=\"580\" height=\"300\" \/><\/p>\n<p><img decoding=\"async\" style=\"float: left; max-width: 85px;\" src=\"https:\/\/duip7hn7nchpo.cloudfront.net\/editor-circle-louis-basenese.jpg\" alt=\"Louis Basenese\" \/>Several media organizations blasted President Trump last week for his about-face regarding NATO.<\/p>\n<p>During his presidential campaign, Trump called NATO\u2019s military presence \u201cobsolete.\u201d<\/p>\n<p>But last Wednesday, Trump held a press conference with NATO Secretary General Jens Stoltenberg, where he called the organization a \u201cbulwark of international peace and security.\u201d<\/p>\n<p>\u201cI said it was obsolete. It\u2019s no longer obsolete,\u201d said Trump.<\/p>\n<p>Coming from Trump, that essentially amounts to a love letter to NATO.<\/p><div id=\"inves-2054375766\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>He even altered his stance on Russia. Amid concerns regarding Russia\u2019s backing of Syrian President Bashar al-Assad, Trump admitted that \u201cwe may be at an all-time low in terms of a relationship with Russia.\u201d<\/p>\n<p>The abrupt reversal shows that his stance on foreign policy is beginning to evolve and he\u2019s likely trying to repair ties with EU member nations.<\/p>\n<p>But there\u2019s one European country that needs no encouragement to get on board with Trump\u2019s policies \u2014 Poland.<\/p>\n<p>Like Trump, Poland\u2019s conservative ruling party is nationalistic and resistant to the EU. And the country has backed Trump more than any other EU member.<\/p>\n<p>Polish government sources recently told Reuters that the country hopes to host Trump for short visit in July. They believe the meeting with Trump will trigger \u201ca significant development for Poland\u2019s image abroad.\u201d<\/p>\n<p>I asked senior analyst Martin Hutchinson to dig in to see if the situation in Poland warrants any investment attention.<\/p>\n<p>Check out his full analysis below.<\/p>\n<p>Ahead of the tape,<\/p>\n<p>Louis Basenese<br \/>\nChief Investment Strategist, <em>Wall Street Daily<\/em><\/p>\n<hr \/>\n<h2 class=\"headline\">Poland Rises Amid Stagnant Growth in Europe<\/h2>\n<p><img decoding=\"async\" style=\"float: left; max-width: 85px;\" src=\"https:\/\/sites.agorafinancial.com\/EMAILS\/images\/editor-circle-martin-hutchinson.jpg\" alt=\"Martin Hutchinson\" align=\"left\" \/>Most of Europe is an investment desert.<\/p>\n<p>Productivity growth has averaged well under 1% annually since 2007.<\/p>\n<p>In fact, growth has been exceptionally sluggish for the last decade \u2014 driven by three contributing factors\u2026<\/p>\n<ul>\n<li>Stifling regulation at the EU level, encouraged by socialist local governments.<\/li>\n<li>Deflationary effects of the euro.<\/li>\n<li>Uncompetitive wage rates.<\/li>\n<\/ul>\n<p>Poland seems to have risen despite the greater downtrend in Europe, however.<\/p>\n<p>The flexibility of its own currency and competitive wages have combined to give the country a healthy growth rate.<\/p>\n<p>Let\u2019s dig in a bit more to see why Poland deserves your attention right now\u2026<\/p>\n<h2 class=\"subhead\">A Stone-Cold Bargain<\/h2>\n<p>Poland marked itself out from its Eastern European neighbors at its 2005 election.<\/p>\n<p>At the time, pro-market parties came both first and second. Socialists were relegated to 11% of the vote, a distant fourth.<\/p>\n<p>Since Eastern European electorates like throwing their governments out regularly, this was good news. They could now do so without bringing back socialism.<\/p>\n<p>Since 2005, the two leading center-right parties, Law and Justice and Civic Platform, have alternated in power. The left had fallen well down into single digits at the latest election in 2015.<\/p>\n<p>The current Law and Justice government is basically Trumpist \u2014 strongly nationalist and opposed to the EU bureaucracy, immigration and globalism generally.<\/p>\n<p>Now, since 2005, Poland\u2019s governments have done a pretty good job with the economy.<\/p>\n<p>In fact, since 2006, Polish productivity has increased by 2.5% annually \u2014 compared with 0.8% annually for the EU as a whole and 1.3% annually for the United States.<\/p>\n<p>The 2008\u201309 downturn was much less painful for Poland than for many other countries. That is because the zloty exchange rate absorbed the strain, declining by some 30% and enabling Polish output to be maintained.<\/p>\n<p>Currently, the Polish economy is chugging along at a decent rate. Moody\u2019s recently upgraded its forecast for 2017 growth to 3.2%, from 2.9%.<\/p>\n<p>Plus, the economy continues to benefit from its independence from the euro. The central bank has set zloty interest rates at 1.5%, compared with to a three-month interest rate of minus 0.33% in the eurozone.<\/p>\n<p>That means Polish capital allocation is less distorted by \u201cfunny money\u201d than in the eurozone countries \u2014 almost certainly one reason why Polish productivity growth has been so decent.<\/p>\n<p>The current government has instituted a subsidy for families that reflects its priorities and is cautious of multinational investment (rightly so, in my view). But it\u2019s otherwise keeping public spending under control and remaining friendly to growth.<\/p>\n<p><em>The Economist<\/em> projects that Polish growth will continue around 3% in 2018, which is very good for a country with almost no population growth. Consider, for example, that the U.S. GDP growth rate of 2% is really 1% per capita.<\/p>\n<p>That makes the Polish stock market a stone-cold bargain, since it\u2019s currently trading at around 12.5 times earnings, compared with 26 times earnings for the Standard &amp; Poor\u2019s 500 index.<\/p>\n<p>So we\u2019d be getting three times the per capita growth of the United States for half the P\/E. I\u2019ll take that anytime.<\/p>\n<p>So how do you benefit?<\/p>\n<h2 class=\"subhead\">Easy Way to Diversify Outside the U.S.<\/h2>\n<p>While a number of Polish shares are listed on London, few of them trade in New York.<\/p>\n<p>That makes the best vehicle for Poland investment a fund. In this case, take a look at the $240 million iShares Poland Capped ETF (NYSE: EPOL).<\/p>\n<p>This fund attempts to match the performance of the MSCI Poland IMI 25\/50 Index. (The fund is capped so that no single share can represent too large a percentage of it.)<\/p>\n<p>The fund\u2019s holdings provide a cross-section of the Polish economy, with financial services representing 43% of the portfolio, energy 18% and basic materials 13%.<\/p>\n<p>I would normally be concerned at the high percentage of financial services, but with Polish interest rates set independently and a slump in the zloty a recent memory from the last downturn, Polish banks are less likely to get in trouble than in a funny-money economy.<\/p>\n<p>The average P\/E ratio of the portfolio is 12.4. Its expense ratio is a reasonable 0.64%, and the yield is 1.8%.<\/p>\n<p>Bottom line: Poland gives you a diversification from both the U.S. and the mistakes of the central EU bureaucracy. It\u2019s growing fast, and it\u2019s cheap. Definitely adds up to a buy rating in my book.<\/p>\n<p>If you do choose to purchase the Poland fund, I wouldn\u2019t pay any more than $24 per share.<\/p>\n<p>Good Investing,<\/p>\n<p>Martin Hutchinson<br \/>\nSenior Analyst, <i>Wall Street Daily<\/i><\/p>\n<p>The post <a href=\"https:\/\/www.wallstreetdaily.com\/2017\/04\/19\/truth-behind-polands-growth-surge\/\" rel=\"nofollow\">The Truth Behind Poland\u2019s Growth Surge<\/a> appeared first on <a href=\"https:\/\/www.wallstreetdaily.com\" rel=\"nofollow\">Wall Street Daily<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By WallStreetDaily.com Several media organizations blasted President Trump last week for his about-face regarding NATO. During his presidential campaign, Trump called NATO\u2019s military presence \u201cobsolete.\u201d But last Wednesday, Trump held a press conference with NATO Secretary General Jens Stoltenberg, where he called the organization a \u201cbulwark of international peace and security.\u201d \u201cI said it was [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-104963","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104963","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=104963"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104963\/revisions"}],"predecessor-version":[{"id":104974,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/104963\/revisions\/104974"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=104963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=104963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=104963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}