The capital market rises by more than 5 percent in the first 4 months while investors await the dividend season and follow the status of future BVB listings

The total value of the listings made on the Bucharest Stock Exchange (BVB) exceeded EUR 1 billion in the first four months of this year, a timeframe marked by volatility in the international capital markets. Since the beginning of the year, 13 rounds of financing, which totaled EUR 1.1 billion, were carried out through the BVB. Zooming in on the fixed income segment, 6 issues of corporate bonds were listed with a cumulative value of EUR 427 million, 5 issues of Fidelis Government bonds worth EUR 618 million, and one issue of municipal bonds worth EUR 112 million, and on the equity segment there was one listing worth EUR 1 million. Fixed income instruments contributed significantly to the total trading value recorded in the first four months at the BVB, particularly driven by the periodic continuation of the Fidelis Government bond issuance program.

Within the equity segment, at the end of the first four months, the five most traded securities on the BVB Regulated Open Market were those of Fondul Proprietatea, OMV Petrom, Banca Transilvania, Romgaz, and BRD – Groupe Societe Generale.

At a general level, the capital market in Romania increased by 5.2% at the end of the January-April period this year, taking into account the evolution of the companies in the composition of the BET-TR index, which also includes dividends. Thus, a slower growth pace can be observed, which exceeded 5.5% at the end of the first two months of this year. Although the increase recorded at the end of April took place against the background of decreasing liquidity, all indices of the Bucharest Stock Exchange were in positive territory at the end of the first 4 months of this year. Compared to the BET-TR index, the energy and utilities index BET-NG recorded the most significant advance, which had a double-digit increase to 10.5%.

Overall, the total value of trading with all types of financial instruments reached RON 6.74 billion, but this figure is down compared to the first four months of last year amid investors’ expectations regarding future IPOs announced at the BVB.

Radu Hanga, President of the Bucharest Stock Exchange said: „The investment opportunities generated by the public announcements regarding the listing intentions of several Romanian companies on the stock exchange created enthusiasm and a state of expectation among investors. Sometimes plans materialize, sometimes not, especially in a complex context. The Romanian capital market grew this year on the back of transactions with less depth than last year, a sign that investors of all types are rebalancing their portfolios. Romania has demonstrated that it can support significant investments: in the last 5 years, 163 financing rounds of over EUR 7.2 billion were carried out through the capital market.”

Adrian Tanase, CEO of the Bucharest Stock Exchange said: „We see potential for improvement in market liquidity, which is below last year’s level. Although in 2022 we had a liquidity record on all levels, we believe that there is a significant growth corridor. The continuation of the Fidelis program for Government securities issued by the Ministry of Finance and the public announcements regarding the listings of new companies on the stock exchange are elements that can positively boost the evolution of the local capital market. We expect this year’s IPOs to boost even more the appetite for stock market investments. The feature offered by authorized brokers in Romania to open online trading accounts coupled with the simplification of tax procedures applicable from January 1, 2023, will significantly contribute to reaching a new record in terms of the number of investors in the capital market.”

The number of investors in the capital market in Romania continued to grow and reached 133,000 investors at the end of 2022, according to data from the Investor Compensation Fund (FCI). By comparison, at the end of 2019 there were almost 54,000 investors. This means an increase of 246% achieved in the last 5 years. Moreover, the figure of 133,000 investors represents an all-time high for the capital market in Romania. Last year 42 funding rounds were completed on the BVB, and the total value of financing rounds reached EUR 1.9 billion euros, being very close to the all-time high of EUR 2 billion in 2021. The capital market in Romania has outperformed compared to several representative indices after, in the last 5 years, the companies in the BET-TR index have offered investors a cumulative growth of over 100%, expressed in the single European currency.

The positive evolution of the capital market in the first four months of 2023 comes after a year 2022 marked by volatility and uncertainties. At the level of the Romanian capital market, new highs were recorded last year in terms of the total transaction value, average daily liquidity, and number of transactions. Thus, the Bucharest Stock Exchange reached a new record in 2022 in terms of the total value of transactions carried out on all markets with all types of financial instruments after this indicator exceeded RON 24 billion, up by 11% from the level of 2021. Also, at the level of last year, the average daily trading liquidity for all types of financial instruments listed on the Regulated Market and the Multilateral Trading System increased by 11% and reached RON 95.6 million. Investors achieved a new record in 2022 in terms of the number of transactions with all types of financial instruments carried out in all markets: more than 1.67 million transactions. At the same time, international uncertainties led to market declines of 1.9% for the BET-TR index at the end of last year.