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WIG20. Massive drops on the Warsaw Stock Exchange after Jacek Sasin’s announcement

Today, the largest companies recorded huge – by a dozen or so percent drops. The WIG20 index has hit its lowest level since the outbreak of the coronavirus pandemic. The reason for this massive sell-off was the recent statement of the Deputy Prime Minister, Minister of State Assets Jacek Sasin, who announced the introduction of a new tax.

According to Sasin the new tax he proposed to the prime minister is 50 percent on the extraordinary profits of the largest companies, including state-owned companies.

The trouble is that Jacek Sasin made such an announcement, but he did not show any draft law on this matter and did not specify exactly what these extraordinary profits were.

The effect of the words of the deputy prime minister is that companies such as Orlen, Enea, JSW, Bogdanka are significantly losing.

The WIG20 index is today at its lowest level in two years. Lost 1.7 percent but the biggest companies dived much harder. Jastrzębska Spółka Węglowa and Enea lost almost 10 percent, Bogdanka and Tauron almost 8 percent, PGE and Orlen over 6 percent.

It is worth remembering that we all lose out on this. Because our pension funds, i.e. OFE and PPK, invest in energy companies. Thus, the statement of Deputy Prime Minister Sasin hit the value of our future pensions.

On Saturday, Jacek Sasin announced on Twitter that he sent Prime Minister Mateusz Morawiecki a draft taxation of extraordinary profits of state-owned companies and private enterprises. The estimated budget impact is PLN 13.5 billion, which we will spend on mitigating the effects of rising energy prices – announced the Minister of State Assets.

In an interview with TVP, Sasin added that he was proposing the rate of this tax at the level of 50 percent and “hopes the government will accept it.” He also found that is convinced that “companies will be happy to give back these excess profits”.

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