Tuesday, 11 December 2007

Bucharest SE Future Outlook  2008


Bucharest Stock Exchange continued in 2007 its hard work in improving the market offer and the legislation in order to become a more accessible, transparent and fair market. The results were seen at the end of the year, when the market capitalization represented almost 34% of GDP and an increase of 60% compared to 2005 (and 14% up versus 2006).

It could also be noticed the increased liquidity in the market, the value of the daily turnover almost doubled compared to 2005 (Euro16 million versus 8.7 million in 2005) and an increase with 40% compared to last year. We also expect that the upward trend to continue in 2008, and hope that the liquidity will reach Euro 80-100 million in 2010. Hence, we expect that 2008 will see a twofold increase of the daily turnover.

The BVB strategic development plan went through the implementation stage, through the new BVB Code, which includes the legal framework for introduction of derivatives, short selling and margin purchases. Some of the targets for 2007 are-

Ø      Implementing short selling, margin purchases and securities borrowing

Ø      Listing new instruments like government securities, warrants, ETFs, mortgage-backed securities

Ø      Implementing the nominee account

Ø      Listing of the major  utility companies, some of them still state-owned (from transport and communication fields: Romtelecom, Henri Coanda International Airport etc).

Ø      Listing of the Property Fund, a major fund created to compensate the damages of the nationalization process

Ø      Building the technical connections with other market operators in Europe

Ø      Playing a more active role in the region.