According to Lucian Anghel, CEO of the Bucharest Stock Exchange, the full-scale impact of listing the state company on the stock exchange will be visible in five to ten years.
Subscriptions for the Romgaz offer surpassed all expectations expressed by capital market analysts and experts. According to Lucian Anghel, CEO of the Bucharest Stock Exchange (BVB), the full-scale impact of listing the state company on the stock exchange will be visible in five to ten years. “Initially, no one ever thought we would raise more than EUR 200 million on the local market, but so far, the Romgaz offer has attracted EUR 1.8 billion in subscription orders by natural person investors,” the CEO stated at the ZF conference entitled ‘Privatizations – the stock exchange’s last chance at growth?’, Mediafax informs.
He continued by saying the full-scale impact of listing Romgaz will be visible relatively later, much the same as the capital market’s current struggle resulted from not taking necessary growth measures five to ten years ago. The BVB official said the government made the right decision in allocating small investors a 15 percent segment of the offer. “There is a possibility to increase the retail segment to over 15 percent,” he emphasized.
“Romgaz is helping the Romanian capital market reach the non-investment grade, meaning junk, in investments. This requires a large company with consistent free-float and Romgaz was the only viable candidate. Apart from our desire to list it, we wanted to have a series of structural measures in the field, and IMF representatives are very happy,” Anghel said further. On November 22, the state launched an offer to sell 15 percent of Romgaz shares at prices between RON 24 and RON 32 per share, estimating a result of RON 1.38 billion (EUR 311.7 million) to RON 1.85 billion (EUR 415.6 million). The offer closes today, October 31, and shares are being sold both on the Bucharest Stock Exchange and through GDRs on the London market.
In turn, Claudiu Cercel, Deputy General Manager of BRD SocGen, said if the Romgaz offer had been listed several years before, the capital market would have looked much differently today and Pipera would have been home to more skyscrapers, more international company headquarters. “The Romgaz offer will be a very important starting point in capital market growth,” Cercel stated.
Proof to the contrary for those who claim there is no domestic potential
The event was also attended by Daniel Daianu, First Vice-chairman of ASF (the Insurance Supervisory Commission), who said the large number of subscriptions related to the Romgaz offer proves the existence of domestic savings and is a proof to the contrary for those who have said we have no domestic potential. “It is wrong to say domestic savings are not being carried out. Romgaz offer is proof to the contrary for those who claimed there is no domestic potential,” the ASF official stated, as cited by zf.ro. According to Daianu, Romania’s economic growth this year will be 2.3 – 2.5 percent, but this significant increase will depend on agricultural production.
Speeding up Hidroelectrica listing on the stock exchange
In addition, the CEO of BVB stated the government should speed up listing Hidroelectrica on the stock exchange to follow in Romgaz’s successful footsteps. “This moment is an historical one for the stock exchange. If I were in the government’s shoes, I would attempt to speed up the listing of Hidroelectrica and secure a company that has damaged our image a great deal, despite correction measures. Such things are imprinted in the memory of investors. (…) Listing Hidroelectrica will be feasible in the first half of next year,” Anghel continued. According to the BVB official, there are other listings which would benefit the capital market, such as Electrica, Salrom and state-owned packages at Romtelecom, Petrom and Rompetrol. “(…) We should see what Poland and Turkey did in this respect. In Turkey, top state companies were listed first, followed by private companies,” Anghel said.