Yearbook 2018
Organization Overview
Emerging Market Watchlist
As per the decision of FTSE Russell published on the September 29, 2017, the Romanian capital market was maintained on the list of countries that have substantial potential to be upgraded to the Emerging Market status. In case of Romania, the upgrade will depend on the progress with regard to the market liquidity and the presence on the market of largest companies with significant individual liquidity.
Largest dividends in the world
Romanian Capital Market recorded one of the highest dividend yields in the world in 2016 and 2017. BET Total Return (BET-TR) index, which includes the dividends granted by the blue chips listed on BVB, has increased by more than 19% in LCY terms in 2017, reporting one of the fastest growth among all 23 MSCI Frontier Markets Index countries.
Growing Domestic Potential
Pension funds’ total assets (pillar II and III) advanced by 26% in 2017, after a comparable increase of 28% Y-o-Y in 2016. The AuM of the Romanian investment funds (apart from SIFs and FP) equal EUR 5.7 bn as of December 31, 2017. There is a big potential vested in the currently small, but active local retail investors base.
Wide market reforms
Constant work on ameliorating the investment landscape, with focus on: easing investors’ access to the market and fiscal compliance, reducing the cost of the market, improving the servicing of investors’ rights, simplifying procedures related to primary markets for equities and bonds and developing the market infrastructure. New regulations regarding lending & borrowing operations were approved.
Potential privatizations and a pipeline of private companies
Increase in favorable perception of BVB as the financing destination for local entrepreneurs looking for capital, which results in ever-growing pipeline of private companies interested in floating shares or bonds on BVB’s markets. Additionally, rich portfolio of state-owned companies as the state has majority stake in 250 companies. Some are currently pending the privatization. State-owned companies expected to float on BVB are Hidroelectrica and Aeroporturi Bucuresti.
Bucharest Stock Exchange SA
About Bucharest Stock Exchange
Established: 1995
Chairman: Mr. Lucian Anghel, Phd
CEO: Mr. Adrian Tanase, CFA
Address: Bulevardul Carol I nr 34 - 36, etaj 14, sector
2, cod postal 020922, Bucuresti, Romania
Contact Name: Ms. Mariana Ciurel
Email: [email protected]
Website: www.bvb.ro
employees and entrepreneurs via our Fluent in Finance seminars and workshops around the country jointly with the Ministry for Business Environment, the Forums for Individual Investors and make capital markets attractive and easy to comprehend by our 7/24 Capital online shows using an out-of-the-box approach. In two years, over 1.5 million minutes of financial education were watched online on the BVB channels.
Our flagship project Made in Romania continues and promotes local businesses. During the two editions of Made in Romania, BVB interacted with over 300 Romanian entrepreneurial companies, from a multitude of sectors of the economy. Made in Romania is a continuous program, an ecosystem, where entrepreneurs, investors, consultants and all other actors in the business environment have the opportunity to meet and learn from each other so that their businesses and, implicitly, the Romanian economy develop in a sustainable way.
All the good things do not happen by chance or overnight. We are reaping the fruits of the seeds we are constantly planting each year. We embarked on hundreds of meetings locally and internationally and act as the promotors of the listed companies in front of the investment community. The international roadshows and events organized or attended by us helped the issuers listed on BVB display in a better light their attractiveness, appeal and high potential. The Romanian capital market has thus become one of the best ambassadors for Romania abroad and we will continue doing this no matter what.
As a result of continuous efforts and improvements, we have received international recognition. The global index provider MSCI upgraded Romania’s accessibility criteria on 3 notes: market regulation, information flow and trading, as it reads its Global Market Accessibility Review from June last year. A few months later, FTSE Russell released its Annual Country Classification Review, according to which Romania was maintained on the Watch List of countries for possible reclassification from Frontier to Secondary Emerging market.
As far as the evolution of the market was concerned, the Romanian capital market led the growth pace in the European Union by the end of the first 11 months by double-digit returns for investors. The situation dramatically changed mid-December, following the public information regarding additional taxation in banking, energy and telecom sectors, as well as changes in the Pillar II pension system. The Bucharest Stock Exchange ended last year in the red following a nearly 5 percent drop. Only the total return indices BET-TR, which also include the dividends, managed to stay on the plus side at end of the year, with around +4%, that might be consider a remarkable performance having considered the local market conditions in December.
For a better understanding of capital markets, BVB has publicly expressed openness and availability to dialogue and communication and has repeatedly warned that investors need legislative predictability in order to fairly evaluate the market opportunities the stock market has to offer.
If we continue to do what we did in the last years, better things will be in store for the Romanian capital market and our efforts will turn into fruits. Collaboration, cohesion and coherence are the three C`s our market needs the most.
As 2018 was the year of the centenary for Romania, I express my profound consideration that this year we will lay the foundation to build a consolidated and stronger capital market to perform outstandingly for the next 100 years, bringing wealth and supporting entrepreneurs to develop their businesses using capital market instruments for the benefit of Romania.
77
Lucian-Claudiu Anghel, Phd
BVB Chairman
Emerging Market Watchlist
Romanian capital market was maintained on the list of countries that have substantial potential to be upgraded to the Emerging Market status. FTSE upgraded from ‘Not Met’ to ‘Restricted’ the single outstanding criterion, Liquidity, following an improvement in broad market liquidity.
Largest dividends in the world
Romanian Capital Market recorded one of the highest dividend yields in the world, averaging 8% in 2017 and 7% in 2018 and is expected to deliver similar results in 2019 as well.
Growing Domestic Potential
Pension funds’ total assets (Pillar II and III) reached EUR 11.2 bn at the end of March 2019, 7% higher than the end of the previous year; the AuM of the Romanian investment funds (apart from SIFs and FP) equal around EUR 5.0 bn as of end of 2018. There is big potential vested in the currently small, but active local retail investors base.
Wide market reforms
Constant work on ameliorating the investment landscape, with focus on: easing investors’ access to the market and fiscal compliance, reducing the cost of the market, improving the servicing of investors’ rights, simplifying procedures related to primary markets for equities and bonds and developing the market infrastructure.
Pipeline of IPOs
Increase in favorable perception of BVB as the financing destination for local entrepreneurs looking for capital, which results in ever-growing pipeline of private companies interested in floating shares or bonds on BVB’s markets. Are also held discussions with the state for resuming IPOs of SOEs.
Company Highlights
The capital market, in general, and the Bucharest Stock Exchange (BVB), in particular, play a pivotal role when it comes to generating the so much needed wealth every economy and country wants to have. We, at BVB, are constantly pursuing this effort to develop one of the greatest financing platforms for the Romanian economy.
We started 2018 with enthusiasm and we had all the right reasons to feel so. A new company came to the market mid-February. It was the first company from the Republic of Moldova that went public on our stock exchange. The IPO of Purcari Wineries, a leading CEE wine producer, was well received, with retail investors oversubscribing more than four times, despite heavy turbulences on global markets.
While the number of listings of new shares slowed down in 2018 as compared to the prior year, the segment for corporate bonds kept a very good dynamic. Significant corporate bond issues took place last year, for example: Globalworth EUR 550 million, Banca Transilvania EUR 285 million, International Investment Bank RON 300 million and EUR 80 million.
The AeRO market saw its activity revamped by its issuers in the corporate bonds sector, as the listed
The capital market, in general, and the Bucharest Stock Exchange (BVB), in particular, play a pivotal role when it comes to generating the so much needed wealth every economy and country wants to have. We, at BVB, are constantly pursuing this effort to develop one of the greatest financing platforms for the Romanian economy.
We started 2018 with enthusiasm and we had all the right reasons to feel so. A new company came to the market mid-February. It was the first company from the Republic of Moldova that went public on our stock exchange. The IPO of Purcari Wineries, a leading CEE wine producer, was well received, with retail investors oversubscribing more than four times, despite heavy turbulences on global markets.
While the number of listings of new shares slowed down in 2018 as compared to the prior year, the segment for corporate bonds kept a very good dynamic. Significant corporate bond issues took place last year, for example: Globalworth EUR 550 million, Banca Transilvania EUR 285 million, International Investment Bank RON 300 million and EUR 80 million.
The AeRO market saw its activity revamped by its issuers in the corporate bonds sector, as the listed companies continued to extensively use the capital market as the financing arm for their businesses and some even consider moving in the Main Market as they got more accustomed to capital market regulations and grasp the benefits of being a public company. The local Clearing Counterparty (CCP) proposed by BVB is a key project to further develop the market infrastructure and improve liquidity. This project also provides a solution to correctly, quickly and safely cope with the counterparty risk, which investors need so much.
Of course, the CCP project alone cannot work miracles and it would be unrealistic to assume liquidity improves overnight.
That is why we continue the financial education projects, we keep on evangelizing capital markets to novices, students, professionals,