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Monday, July 26, 2021 
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The Romanian capital market outgrows 2020 in the first month of this year to set new all-time highs

2/9/2021

  • All the indices of the Bucharest Stock Exchange (BVB) ended in positive territory in January.
  • The Romanian capital market went up by 5% last month as the BET-TR index reached a new all-time high of 17,500 points.
  • Liquidity for all the financial instruments broke the RON 1-billion ceiling, +6% versus January 2020.
  • Radu Hanga, BVB President:
    • We are pleased with the recent decision of the Romanian Government to pave the way for the listing of minority stakes in companies in which the Romanian state is a shareholder. Resuming listings does not mean privatization, but transparency and access to finance, while the state can still retain the majority control in the companies from its portfolio.
    • It is in the interest of the Romanian state to have as many companies listed on the stock exchange as possible because the capital market ensures a climate of performance and transparency, thus contributing to the development of the national economy.
    • We, at the Bucharest Stock Exchange, position ourselves as long-term partners of the Romanian state, and together we have a long and positive experience in using capital market mechanisms both through issues of government securities and through equity listing on the stock exchange, as the last 20 years show for the most important companies in the state’s portfolio: starting with OMV Petrom in 2001, a company in which the state has a significant stake of over 20.6%, and continuing with six other companies included in the BET index in which the state is the most important shareholder (Romgaz, Nuclearelectrica, Transgaz, Electrica, Transelectrica, Conpet). The stock exchange thus offers multiple examples testifying that the companies in which the state is a shareholder have become an economic success.
  • Adrian Tanase, BVB CEO:
    • The advantages the companies can reap from going public are manifold. Through the rules imposed by corporate governance, The capital market ensures increased transparency in the way the listed companies carry out their activity, efficient management that is accountable to the shareholders, and also a correct evaluation of the companies according to the demand-supply dynamic.
    • For the state budget, the presence of state-owned companies on the stock exchange can create opportunities for additional cash flows to the budget. At the same time, it reduces the pressure on the budget to ensure possible financing because the capital market offers the possibility to companies to finance themselves by issuing shares or bonds that cover the much-needed investments, which allow the Romanian companies to develop.
    • For Romanians, the increase in the number of companies listed on the stock exchange means increased participation in the economic activity of Romania, either through direct investments by buying shares in these companies, or through indirect investments, such as investment funds or pension funds, especially since 7.6 million Romanian employees contribute to the Pillar II pension funds.

 

The Bucharest Stock Exchange (BVB) kickstarted 2021 with all stock indices in positive territory, as the Romanian capital market posted significant increases, which exceeded in one month the level achieved throughout the entire 2020. The BET-TR index, which also includes the dividends, went up by 5.1% in January as compared to December last year. Moreover, BET-TR closed the last trading session in January of this year at a record level of 17,350 points, setting a new all-time high after previously breaking another high of 16,500 points, reached at the end of December last year.

The Romanian capital market demonstrates that it is an essential pillar of financing the local economy, and that both the state and Romanian investors can increase their well-being by participating in the stock market phenomenon.

"We are pleased with the recent decision of the Romanian Government to pave the way for the listing of minority stakes in companies in which the Romanian state is a shareholder. Resuming listings does not mean privatization, but transparency and access to finance, while the state can still retain the majority control in the companies from its portfolio. It is in the interest of the Romanian state to have as many companies listed on the stock exchange as possible because the capital market ensures a climate of performance and transparency, thus contributing to the development of the national economy. We, at the Bucharest Stock Exchange, position ourselves as long-term partners of the Romanian state, and together we have a long and positive experience in using capital market mechanisms both through issues of government securities and through equity listing on the stock exchange, as the last 20 years show for the most important companies in the state’s portfolio: starting with OMV Petrom in 2001, a company in which the state has a significant stake of over 20.6%, and continuing with six other companies included in the BET index in which the state is the most important shareholder (Romgaz, Nuclearelectrica, Transgaz, Electrica, Transelectrica, Conpet). The stock exchange thus offers multiple examples testifying that the companies in which the state is a shareholder have become an economic success," said Radu Hanga, President of the Bucharest Stock Exchange.

In the case of the Romanian state, the listing of minority stakes on the stock exchange has a number of advantages, both for the issuer and for investors.

"The advantages of the companies can reap from going public are manifold. Through the rules imposed by corporate governance, The capital market ensures increased transparency in the way the listed companies carry out their activity, efficient management that is accountable to the shareholders, and also a correct evaluation of the companies according to the demand-supply dynamic. For the state budget, the presence of state-owned companies on the stock exchange can create opportunities for additional cash flows to the budget. At the same time, it reduces the pressure on the budget to ensure possible financing because the capital market offers the possibility to companies to finance themselves by issuing shares or bonds that cover the much-needed investments, which allow the Romanian companies to develop. For Romanians, the increase in the number of companies listed on the stock exchange means increased participation in the economic activity of Romania, either through direct investments by buying shares in these companies, or through indirect investments, such as investment funds or pension funds, especially since 7.6 million Romanian employees contribute to the Pillar II pension funds," stated Adrian Tanase, CEO of BVB.

The investment activity at BVB increased by 6.1% last month as compared to January 2020. Thus, the total trading value registered at the level of all types of financial instruments reached RON 1.08 billion (equivalent to EUR 221 million). Of this value, the transactions performed on the shares segment represented RON 783 million (EUR 160 million), while on the fixed income instruments segment the transactions totaled RON 235 million (EUR 48 million). The rest of the transactions were performed on the segment of structured products, fund units, ETFs. The average daily trading value performed in January with all types of financial instruments was RON 53.88 million (EUR 11.07 million), an increase of six percent compared to the first month of the previous year.