BUSINESS

Electrica, sixth Romanian company included in MSCI Frontier Markets

According to reports from MSCI Inc., the most important supplier of financial components for global investors, Electrica Group, Romania’s biggest energy distribution and supply company, will be included, starting on November 25, in MSCI’s frontier markets index, an index monitored by funds with assets of USD 12.4 bln. As a consequence, the Romanian company could attract extra capital inflows of up to USD 120 M according to some analysts.
Electrica S.A. has national coverage, its local branches being located in the three areas of North Transylvania, South Transylvania, North Muntenia and also the entire country, as regarding networks maintenance and the energetic services segment. The Company offers high quality services for a large spectrum of clients – domestic and industrial consumers, as well as business enterprises. Through its distribution branches – Transilvania Nord, Transilvania Sud and Muntenia Nord, through Filiala Electrica Furnizare and through the six Enterprises – Societ__i de Servicii Energetice – that run their business activities nation-wide, Electrica S.A. is serving approximately 3.5 million clients.
Electrica, a group with incomes of RON 5.1 bln in 2013 and a capitalization of RON 4.1 bln, was floated on the Bucharest stock exchange and the London stock exchange on July 4. Electrica thus becomes the sixth Romanian company included in the frontier markets index, after Banca Transilvania, Petrom, Romgaz, BRD and Transgaz. The decision to include or exclude companies from the index is based on the companies’ stock market capitalization and liquidity, not on their revenues, turnover or profit.
The MSCI Frontier Markets 100 index is an investible index on whose structure several ETFs were created. The index reflects the performance of frontier markets and places higher emphasis on their transaction characteristics. The revised methodology of the MSCI Frontier Markets 100 index came into force in May 2014, and will be implemented gradually, over seven stages, the process set to conclude in November 2014.
At the end of July 2014, Romania’s share within the MSCI Frontier Markets 100 index stood at 2.23 per cent. Five Romanian companies were included in the MSCI Frontier Markets 100 index: Banca Transilvania (TLV), OMV Petrom (SNP), Romgaz (SNG), BRD – Groupe Societe Generale (BRD) and Transgaz (TGN). MSCI Inc. is a leading provider of investment decision support tools to investors globally, including asset managers, banks, hedge funds and pension funds. MSCI products and services include indexes, portfolio risk and performance analytics, and ESG data and research.
The company’s flagship product offerings are: the MSCI indexes with over USD 9 trillion estimated to be benchmarked to them on a worldwide basis; Barra multi-asset class factor models, portfolio risk and performance analytics; RiskMetrics multi-asset class market and credit risk analytics; IPD real estate information, indexes and analytics; MSCI ESG (environmental, social and governance) Research screening, analysis and ratings; and FEA valuation models and risk management software for the energy and commodities markets. MSCI is headquartered in New York, with research and commercial offices around the world.

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