Poland's surging stocks have further room to run as new investors pour cash into eastern Europe's biggest equity market, according to Mateusz Kacprzak, head of corporate and investment banking at UniCredit SpA in Poland.

The WIG20 stock gauge has advanced 29% this year, outpacing a 20% jump in emerging-market equities. The benchmark Warsaw index has tripled in less than four years, flipping the narrative around stock investing in Poland, where returns lagged peers for nearly two decades. Foreign funds are increasing allocations, drawn by attractive valuations, a strong economy and regional market depth.

Local equity funds have attracted about 1.5 billion zloty in net inflows this year, with 7 billion zloty in dividends from the 10 largest payers. A successful completion of Alimentation Couche-Tard Inc.'s tender offer for Zabka Group SA could free up roughly 6 billion zloty for Polish funds, with further proceeds potentially from a buyout bid for InPost SA.

UniCredit relaunched operations in Poland late last year and has already become the country's third-largest equity book-runner. The WIG20 trades at about 11 times forward earnings, compared with roughly 21 times for the S&P 500 and 15 times for the Stoxx Europe 600, keeping foreign investor interest strong.