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January 28, 2023

BVB goal: Obtaining investment grade status

The Bucharest Stock Exchange is already surpassing its counterpart in Budapest.

The Romanian stock market and capital market have witnessed historic and unprecedented transformations in the past two and a half years, and reforms must be continued to obtain the status of emerging market (investment grade), the Bucharest Stock Exchange /BVB/ President Lucian Anghel said on Monday.
The amendments to the Stock Exchange’s Code, which aim at separating the trading and post-trading processes, but also a faster settlement of transactions, took effect on Monday, October 6. On this occasion, the BVB trading session was officially opened by Prime Minister Victor Ponta.
‘The value of the Romanian companies listed on the BVB has increased in the last two and a half years by 80%, to almost 20 billion euros, surpassing for the first time the Budapest Stock Exchange,’ said Lucian Anghel.
The increase in capitalization has come both from the Government’s decision to list some companies, such as Nuclearelectrica, Electrica and Romgaz, which brought a plus of 4.4 billion euros, as well as from the increase in the value of the listed companies, with the BET reference index having recorded an annual increase by 20% from January 2012, added the BVB president.
Compared to 2012, trades have doubled, and this year their daily average stood at 13 million euros, including the level of IPOs, according to the BVB official.
Thousands of Romanians should be pleased with participating in public offerings, said Anghel, with yields from the latest deals, Romgaz and Electrica, standing at 12-20%, equivalent to 4-5 years of interest from bank deposits.
Moreover, the rate of dividends is 9% at the top six energy and utility companies, three times higher than in the case of emerging markets, and the average of the Romanian market is 6%.
The BVB brokered, in the said period, public offerings of 900 million euros and cumulated bonds totaling two billion lei.
The BVB starts being one of the elements that could sustain in the long term the funding in Romania, said Anghel, who mentioned that the strategic objective of the capital market is the upgrade from border market status (non-investment grade) to the emerging market one (investment grade).
‘The increase in the market value of the listed Romanian companies by some 8-10 billion euros is at stake, which can be done in 3-4 years,’ said the BVB president.

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