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Total trading value exceeds half a billion euros and liquidity trebles on Bucharest Stock Exchange in September when Romania upped to Emerging Market status

10/12/2020

  • The immediate effect generated by the approach of the historic moment when Romania was promoted to the status of Emerging Market, starting from September 21st, was strongly visible on the Bucharest Stock Exchange (BVB).
  • The contribution of two Romanian listed companies, Banca Transilvania (TLV) and Nuclearelectrica (SNN), was decisive for the reclassification of the entire market to a higher status, following their inclusion in the FTSE All-Cap indices for Emerging Markets.
  • The total trading value in the equity segment of the BVB-listed companies exceeded half a billion euros in September this year, up by over 260% both compared to August 2020 or September last year, when FTSE Russell published the decision regarding the promotion of Romania.
  • The average daily liquidity increased by 3.5 times in September compared to August 2020 or September 2019 and exceeded 25 million euros.
  • Radu Hanga, BVB President:
    • The figures strongly strengthened the special significance regarding the promotion of Romania to a new status. At the same time, we need to be brutally honest: this is the immediate, visible effect but it is essential to have realistic expectations and to take into account the domestic and the international context we live in.
    • In an ever-changing world, the stock market is positioned as an essential benchmark and pillar of financing the economy. This year, Romanian companies have shown, more than ever, that they have the ability and determination to adapt their business model, and we have demonstrated, through the stock market, that we can facilitate their access to the vital capital they need to operate as the pandemic rages on.
  • Adrian Tanase, BVB CEO:
    • The promotion of Romania is a continuous process, not only a mere stage. It is the fundamental element that Romanian investors should take into account. Our priority is to consolidate the status we have just gained by increasing the number of companies included in the Emerging Markets indices.
    • Our ambition is to announce after the next assessments that we have several Romanian companies that will be part of this investment universe, and we are in talks with their representatives to implement the best solutions for these inclusions to become reality.

 

 

Romania’s promotion to the Emerging Market status, according to the classification of the global index provider FTSE Russell, had immediate effects on the Bucharest Stock Exchange. Romania became an Emerging Market and was included in several FTSE Russell indices dedicated to Emerging Markets starting from September 21st, turning September into a booming month for the local market as liquidity indicators trebled.

The total trading value with the shares of companies listed on the Bucharest Stock Exchange (BVB) exceeded half a billion euros last month, which represents an increase of over 260% both compared to August this year or September last year, when the FTSE Russell’s decision was published announcing the reclassification of Romania. Thus, in September, the trading value in the equity segment amounted to RON 2.7 billion, the equivalent of EUR 556 million. For comparison, in August, the same indicator showed a level of RON 747 million or EUR 154 million, while in September 2019 amounted to RON 726 million or EUR 153 million. Following the first 9 months this year, the transactions with shares posted a cumulative value of RON 9.64 billion or EUR 2 billion on the Bucharest Stock Exchange. Almost 28% of these transactions were made in September alone.

The liquidity as reflected by the average daily trading value amounted to RON 123 million last month, the equivalent of EUR 25.3 million. Compared to the previous month, it went up by 245%, while compared to September 2019 the increase was 255%. Over the first 9 months, the average daily trading value exceeded RON 51.2 million or EUR 10.6 million.

"The promotion of Romania to the Emerging Market status was indisputably a historic moment, which had strong echoes not only in the business community or in the political establishment but also among many people in Romania. I am convinced that many more Romanians must have heard about the stock market by now, and we hope to see them taking steps towards becoming investors. The figures strongly strengthened the special significance regarding the promotion of Romania to a new status. At the same time, we need to be brutally honest: this is the immediate, visible effect but it is essential to have realistic expectations and to take into account the domestic and the international context we live in. In an ever-changing world, the stock market is positioned as an essential benchmark and pillar of financing the economy. This year, Romanian companies have shown, more than ever, that they have the ability and determination to adapt their business model, and we have demonstrated, through the stock market, that we can facilitate their access to the vital capital they need to operate as the pandemic rages on", said Radu Hanga, President of the Bucharest Stock Exchange.

"As the records show, the Romanian capital market has become much more attractive and has been included, following its promotion to the status of Emerging Market, in indices that comprise companies with a total market value of about 50 times higher than those in the Frontier Markets’ category. The promotion of Romania is a continuous process, not only a mere stage. It is the fundamental element that Romanian investors should take into account. Our priority is to consolidate the status we have just gained by increasing the number of companies included in the Emerging Markets indices. Our ambition is to announce after the next assessments that we have several Romanian companies that will be part of this investment universe, and we are in talks with their representatives to implement the best solutions for these inclusions to become reality", stated Adrian Tanase, CEO of BVB.

Two Romanian companies, Banca Transilvania (TLV) – the most traded company from BVB – and Nuclearelectrica (SNN) – a BVB-listed company in which the Romanian state is the majority shareholder – have met the necessary criteria to be included, starting from September 21st, in the All-Cap indices dedicated to Emerging Markets according to the classification of the global index provider FTSE Russell. As a result of Romania’s upgrade to the Emerging Market status by including the issuers Banca Transilvania and Nuclearelectrica in the FTSE All-Cap indices, which are the benchmark for the upgrade to the new market status, other Romanian companies listed on the Bucharest Stock Exchange can also be included in the Emerging Market indices. According to the FTSE Russell classification, the first Romanian company that benefits from the market upgrade is TeraPlast. Other Romanian companies listed on BVB can be included in the EM indices as soon as they meet the inclusion criteria.