BVB, the main market for Romanian enterprises

After the euphoria of the first trading days of Romgaz shares, when all investors sought to secure their profits obtained from the significant discounts they benefitted from during the IPO subscription, the trading volume of Romgaz shares on Bucharest Stock Exchange (BVB) exceeded the volume of traded Green Depository Receipts (GDRs) on London Stock Exchange. According to the information published on the London Stock Exchange website and the Reuters data, between November 25 and December 10, the BVB traded volume was 67% higher than that of GDRs in London. As per a BVB’s release, the higher liquidity on the Bucharest Stock Exchange is supported both by the activity of investors in the retail sector and by the fact that Romania’s capital market is closer to the primary activity of Romgaz itself.

‘Retail investors provide liquidity which is important not only for the stock exchange, but also for the issuers who would like to have a proper base of investors in case they want to raise capital in the future. The listing of a state-owned company should facilitate its transformation to a modern, efficient and profitable company, capable to successfully compete with other similar enterprises in the region. And it can only do that on its home market, where its main activity is run and where its clients are located.’explains Ludwik Sobolewski, BVB CEO.

However, the unexpected success of Romgaz IPO on the London Stock Exchange is not neglected and thereby Romania’s Ministry of Public Finance aims to extend the cooperation with the British stock exchange. In that respect, Daniel Chitoiu, Head of the Ministry, has recently had a meeting with delegates from London Stock Exchange given the privatizations of state-companies such as Hidroelectrica, Electrica, Oltenia Energy Complex or Hunedoara Energy Complex which will be listed next year and which are of high-interest to foreign investors in the energy sector.

That was also confirmed by the British delegation, its members emphasizing that investors see a huge potential in this area and therefore early and proper arrangements for further IPOs could be substantially beneficial to both the Government and the listed enterprises. In this regard, they also showed availability to establish a strategic framework for a cooperation so as to achieve the objectives set in the privatization processes, a press release of the ministry informs.