Analysts: IPOs and significant dividends trend to continue in 2018 at BVB

Thursday, 7 December 2017

The IPOs and significant dividends trend will continue in 2018 at the Bucharest Stock Exchange (BVB); the banking and energy sectors will be even more attractive for investors and the market has a growing potential to historical records, said the analysts within a debate organized by the capital market operator.
“If someone had asked me a year ago, I wouldn’t have anticipated that we would have 5 IPOs in 12 months. I remember that 4-5 years ago there were rumours that Medlife would be listed at Warsaw or London and a few people expected to see this listing at Bucharest,” said Mihai Caruntu, senior analyst of capital market within Romanian Commercial Bank.

“This year were many companies listed on BVB and we see a tendency towards IPOs that can continue and auto-replicate in 2018,” said Marius Pandele, analyst within Prime Transaction.

An area with a lot of potential according to analysts is the dividends area, as the state will need money.

“We can expect that the memorandum with 90 percent distribution of dividends to continue in 2018, which will mean quite high potential yields: Transgaz has a potential somewhere at 13 percent yield of dividends compared with the current market price, Romgaz and Nuclearelectrica have a potential of over 10 percent, under the condition for the last quarter of 207 to bring similar results to those from the last quarter of 2016,” added Pandele.

“BVB confirms the statistics of mature markets: over 50 percent of the updated average yield of companies listed on BVB come from dividends and this thing implies a profitability-risk ratio more attractive from my point of view compared with other markets from the Central and Eastern Europe. My estimation for 2018 is an average yield of dividends of 6-7 percent for the main shares listed on BVB,” said Caruntu.

Ovidiu Dumitrescu, vice-general director of Tradeville, is expecting for the growing price of the oil to make the energy sector more attractive.

Also Grațiana Ordean, senior financial analyst within Banca Transilvania, said that the banking sector will be attractive for investors in 2018.

Ordean estimates that we can see BET index reach a target of 9,000 point sin the next 12 months.