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Bucharest
October 5, 2022
ECONOMYFINANCE&BANKING

Stock exchange expects boost from state companies’ IPOs

The Bucharest Stock Exchange (BVB) President states that the institution he represents is engaged in talks with Government and Fondul Proprietatea representatives so that Hidroelectrica’s floatation would have substantial free-float on the market. The stake is for the company to be one of the issuers that would also meet the free-float criterion so that the local stock exchange would receive the emerging market status.

Hidroelectrica would be floated on the BVB with more than 15 per cent of the shares, in line with the talks between the market operator, the state and Fondul Proprietatea (FP).

Hidroelectrica’s trustee in bankruptcy pointed out that the process of preparing the company for floatation will end in the autumn and the trading of a package of shares could start in November 2016. This option seeks for the hydropower producer to become one of the issuers that falls within the Morgan Stanley criteria that concern the capitalization and size of the free-float so that the Romanian stock exchange can reach the emerging market status.

“The state would stand to win if Romania is promoted,” BVB Chairman of the Board Lucian Anghel stated, reminding that the Government has on the stock exchange many companies that would stand to win if the local capital market were to gain the emerging market status.

This step is not expected in the next 6 months, but the goal will be attained on the medium and long term, Anghel stated at the Forum for Individual Investors organized in Bucharest by the institution he leads.

Once the emerging market status is obtained, there will be more funds earmarked by non-resident institutional investors for the Bucharest Stock Exchange. This will be seen in a first stage in the growth of the Romanian companies’ value, with the effect subsequently trickling down to other issuers too.

This year, Anghel also stakes on the floatation of Salrom, the national salt company whose majority share package is owned by the state. It is not an offer made by the Government, but most likely Fondul Proprietatea will be the one that will sell its shares through such an IPO for which there is the state’s principled agreement. Such a transaction will be a good signal for the market and will offer visibility to the stock exchange, Anghel concluded.

 

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