How to buy shares of CD Projekt – a Polish video game developer

I decided to write again about CD Projekt. The reason for it was the interest of the readers of this blog in investing in this company.

The company is a Polish video game developer so it makes investing in the company more difficult. Not every brokerage account allows you to buy Polish shares.

In this post I will share information about the platforms I personally use for investing in stocks listed on the Warsaw Stock Exchange. I will also list some of the reasons why Polish companies are relatively attractive.

CD Projekt – my best (and worst) investment decision at the same time

I bought my first shares in the CD Projekt company on 26th November 2013. The price of one share was then 14.80 PLN. I sold my shares at the average price of 71.79 PLN in April 2017.

This is an increase of 385.07% in less than three and a half years. At first, I thought I sold the shares at the right moment.  

Selling CD Projekt shares after gaining over 385% in less than three and a half years

How far was I from the true?

As you can see it was just a very shallow correction in the bullish trend in the shares of this company. Since I have sold my shares, the price of CD Projekt skyrocketed additional 210.63% in slightly more than 2 years. One share now costs 223.00 PLN.

CD Projekt shares continued their incredible rally growing over 210% after I cashed out the investment

On the bright side I made a really good profit from the investment in this company. On the other hand, I sold the shares too early or rather I should not have sold them at all.

Cyberpunk 2077 in 2020

It is already 6 and a half years since CD Projekt published a Cyberpunk 2077 Teaser Trailer on the company YouTube channel.

In April this year, the company showed a Cinematic Trailer during the E3 2019. E3 is the world’s premier event for computer and video games.

During this event, CD Projekt revealed that the new game will be released in April 2020.

I am sure, a lot of gamers heaved a sigh of relief after the news. It meant that the launch of the game will actually happen before 2077… Waiting for this game for over 6 years had to be a difficult time so knowing that there is less than a year to wait for it is a game changer.

During and after the E3 event I received many requests to explain how to buy shares of Polish companies. 

Increase in visits on my website during and after E3 2019

The chart above shows the peak of views of this blog at the beginning of June. It was after the presentation with Keanu Reeves. The game was one of the most followed during the event. It received a very positive feedback. The post about my successful trade in the shares of CD Projekt is generating over 50% of the traffic on this website. It shows the interest in the new game as well as in the CD Projekt company.

Netflix TV series – The Witcher

This week we got the first trailer of Netflix’s adaptation of the Witcher story. The same story is presented in the series of games produced by CD Projekt. Currently, 40 million copies of the series have been sold. 

Netflix’s production is another reason why I expect to see bigger interest in buying shares in this company in 2019 and 2020 so this post may be helpful for many investors.

Buying Polish shares in the UK, probably also in other countries 

Finally, after this short introduction about reasons why I decided to write this post, right to the point.

I live in the UK and that is why I am writing about the platforms I use for buying Polish shares. I do not want to recommend something I have not really used or I do not understand how it works.

I have a Stocks and Shares ISA account with Saxo. Stocks and Shares ISAs (Individual Savings Accounts) are a special type of account that allows you to invest and avoid paying tax on the profit you make, regardless of your income.

Saxo Bank is a Danish investment bank specialising in online trading and investment. They serve clients in 120 countries so I expect you will be able to open an account with them in different countries. Saxo in the UK does allow me to buy shares of Polish companies. But please do your own research on this subject to be sure that you will be able to invest in Polish companies from your own country.

The reason for having Stocks and Shares ISA with Saxo is that it allows me to invest in Polish shares. The most popular stock investing accounts in the UK like Hargreaves Lansdown or AJBell does not give me this option.

On the screenshot below you can see that you can trade shares of Polish companies using Saxo platform. 

Buying Polish shares using Saxo platform

I also have the account in US $ with Saxo for my US investments. It allows you to trade American companies without any currency conversion. It also allows you to buy Polish companies. The difference is that the profits from investments in this account are taxable.

Saxo – costs

Trading commissions

For the clients in the UK the trading commissions are as below:

https://www.home.saxo/en-gb/rates-and-conditions/equities-and-etfs/commissions

Currency conversion charges

You need to be aware of the currency conversion charges. It is currently at 1% for the Saxo ISA account which I use.

The money in ISA is held in British Pounds so when you buy shares in a Polish company from the Warsaw Stock Exchange it will be converted to Polish Zloty and you will pay for the conversion.

https://www.home.saxo/en-gb/rates-and-conditions/commissions-charges-and-margin-schedule/overview

Currency conversions of trading costs as well as profits and losses from trading activities are done using the mid-spread FX Spot rate when you close the position, plus/minus 1%.

Platform fee

Saxo Markets charge a platform fee of 0.12% per year.

Buying Polish shares if you have a bank account in Poland

Before I started investing from the UK, I used Polish trading platforms. Currently, the only platform I use in Poland is Makler from Santander bank.

Buying Polish shares using the Santander Makler – option for people having a Polish bank account

In the past I also used Bossa.pl and platform eMakler from mBank.pl. I decided to use a Santander account exclusively because of their lower trading fees.

Advantages of using the Makler platform from Santander Polska compared to using the Saxo platform in the UK

  • no currency conversion every time you trade shares
  • trade fee of 0.19% and minimal fee for a trade as little as 1.90 PLN
  • no platform fee below 500 000 PLN which is around £100 000 

Disadvantages of using the Makler platform from Santander Polska compared to using the Saxo platform in the UK

  • the ISA account gives you the opportunity to avoid paying tax on the profit you make.

Investing in Polish gaming companies – is it a good idea?

Well, I will not answer this question as I am not giving any recommendations.

I can list some arguments for buying Polish shares but the decision is always yours.

  • Cheap valuation of the Polish stock market with a PE ratio below 12

PE ratio for Polish Stock Market – Index WIG

  • Attractive relative fundamental valuation

Fundamental Valuation Ratios for International Equity Markets – June 2019

 

  • 4th fastest growing economy

Poland will be the 4th fastest developing country in 2019 – MPiT

  • Expensive $ in relation to Polish Zloty means that CD Projekt and other Polish game producers are making bigger profits as their costs are mainly in Polish currency and a huge part of their revenues comes from abroad

 

I hope that this analysis and information about ways to buy Polish shares have been useful. Please share in the comment field below which Polish companies you own in your portfolio / you have plans to own.

 

If you believe this post may be useful to your friends, share it on social media.

 

Be aware that the charges and fees could change since this post was published.

Please note I am not a regulated financial advisor and so any help will be non-advisory. If you are unsure of the suitability of any investment you should seek professional financial advice.

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