Romanian Capital Market
Romania is an Eastern European Emerging Market that has attracted the interest of a wide range of investors, both strategic and financial, in recent years.
Capital market operations in the country are managed and supervised by the National Securities Commission (NSC, http://www.cnvmr.ro), autonomous administrative body subordinated to the Romanian Parliament. The NSC issues the legal framework for capital market activities (trading, public offerings, asset management, brokerage); licenses capital market operations (new stock and bond issues, issuer corporate actions); supervises capital market participants. The capital market in Romania is regulated by Law No. 297/2004 and by other NSC regulations (the law is available on the NSC webpage).
There are two market opertors in Romania: the Bucharest Stock Exchange (BSE) and Sibex. BSE (http://www.bvb.ro) operates three equity markest (a regulated market, the Rasdaq market and an ATS) and a derivative market. . BSE's regulated market lists some of the most important companies in Romania, including Petrom - the national oil operator owned by OMV, Banca Romana pentru Dezvoltare - Romania's second largest bank owned by Societe Generale, Banca Transilvania - one of Romania's most dynamic independent banks, the five Financial Investment Companies (SIF) - the largest investment funds in the country. The stock exchange also trades lists municipal, corporate and government bonds, as well as single stock and currency futures.
All securities trading in Romania is carried out by brokerage companies called Financial Investment Services Companies (FISC) licensed by the NSC and established according to law 297/2004.
After the implementation of a modern capital market framework in Romania, the market underwent several distinct phases in its evolution. The implementation of the necessary institutional and regulatory framework in the '90s was followed by a prolonged bull market between 2000 and 2007. In 2008 Romania joined the ranks of markets hit by the financial crisis, but in 2009 main indexes reached a turning point. Currently, valuations of Romanian stocks remain low compared to peers in the region, while opportunities based on new listings and government-planned SPOs and IPOs paint a bright picture for the future.
As of December 2010 total market capitalization of BSE's regulated market was 23.9 Billion euros (up from 19.1 Billion in 2009); the market capitalization of the Rasdaq market was 2.5 Billion euros (down from 2.9 Billion in 2009).
A number of interesting new listings are expected in the next few years: national utilities and telecom companies; Romania's largest bank, Banca Comerciala Romana; a number of medium and large sized privately-owned companies in a wide range of sectors and industries.
The buy side is also expected to grow as the Romanian public improves financial education, foreign institutional investors increase in numbers and volumes invested as the visibility of the market grows, and Romanian institutional investors including mutual funds, private pension funds and insurance companies increase their investments in local stocks.
Market activity will also benefit from economic, political and social transformations currently taking place in Romania, including the country's emergence from recession and the financial crisis, increasing standards of living and wages, improving economic, fiscal and regulatory conditions based on EU requirements.
We strongly believe that the Romanian market will continue to grow in the years to come. Let us be your guide so you can benefit from this opportunity.
Click here to read our comprehensive report on the Romanian Capital Market in 2010.
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