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December 3, 2021
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ARIR debate: It is the best moment for the privatization of state-owned companies

– The argument “we do not sell our country” does not hold because we, Romanians, can buy it –

 

The Romanian Investor Relations Association (ARIR) organized the debate “Market Sentiment” during which the best specialists from the financial market brought arguments for the privatization of the state-owned companies. These include, among others, the possibility for Romanians to buy state-owned companies, the improvement of the governance of the state-owned companies, as well as the opportunity for local pension funds to invest in the local market in new companies. The capital market is developing, new issuers are expected and it is important to privatize the state-owned companies, including the banks, using the stock market.

Cristian Popa, CFA, Member of the Board of Directors, BNR:

“I think it is the best time for the state to list companies on the stock exchange. The argument “we do not sell our country” does not hold first of all because we, Romanians, can buy it. There are 7 million Romanians waiting to invest using the stock exchange through private pension funds, we have mutual funds and an increasingly active community of individual investors. The argument “we do not sell our country for nothing” does not hold either because the Bucharest Stock Exchange is at an all-time high. I wonder: have these companies made all the investments and no longer need money, have they done everything in Romania and no longer need capital? I personally also support the listing of state-owned banks. It is better to list them because transparency is higher, more emphasis is put on governance. I think the Parliament will take a wise decision and repeal the law banning the listing of state-owned companies on the stock exchange. ”

Daniela Șerban (photo), President & Co-founder of ARIR:

“At this moment, Romanians’ money is not being used at maximum yield and more developed and diversified capital market is needed. We can observe also in the last period an effervescence of small companies coming on the alternative trading system – AeRO. Given that BET index is at historic highs, it would be a good time to list state-owned companies. Thus, it will also be encouraged more transparency, the implementation of corporate governance principles and the creation of a more competitive market. ”

Dragoș Manolescu, CFA, Deputy CEO, OTP Asset Management:

“I support the idea that we should see the state-owned banks, starting with CEC, listed on the stock exchange. Even RAPPS could be listed on the stock exchange as the largest real estate fund in Romania. If you list the state-owned companies, you do not sell them because the state remains the majority shareholder, however listing means transparency. This is perhaps the best time for privatization, especially in a context where, in Europe, ESG is becoming increasingly important. The state must come up with projects in the area of ​​corporate governance. For example, all boards members should be elected at the same time, with a 4-year term, cumulative vote. The companies with a high score related to corporate governance are evaluated higher by the market.”

Andreea Pipernea, CEO NN Pensii:

“From the investments point of view, pension funds have certain legal limits, such as their holding in a company. These limits will gradually start to be reached and at that point pension funds will practically be forced to invest more and more abroad. It would be better for these flows to be mainly captured by our local companies, to use domestic capital for the benefit of the real economy, than to increase the investments in other markets more than is necessary for reasons of liquidity and diversification. ”

Aurel Bernat, CEO BT Asset Management:

“When we talk about the listing of state-owned companies on the stock exchange, we are talking about a natural thing and not about a moment. For an economy to become successful, it needs competitiveness and this is very visible in the markets where a third party comes and evaluates you. We need to talk about listing companies on the stock exchange, whether they are state-owned or private, looking especially at current sources of funding – most are bank loans. I think it is a good time to attract the liquidity of any investor from the market to support the growth of companies. For the state, it is like a “sell and lease back” because it sells the property and collects a certain amount that it can use in other projects. ”

 

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