Dividends make the Bucharest Stock Exchange soar by 11 percent in the first half

Wednesday, 11 July 2018

The first half brought to Bucharest Stock Exchange (BVB) two listings (a technical one and an IPO), two bonds issues (one municipal and the other corporate), market readjustment (yet, the index including the dividends went up by 11%) and recognition from MSCI regarding the improvement of several criteria of the local capital market.

Shares of Elvila SA, symbol ELV, a leading furniture producer in Romania, started trading on the Alternative Trading System of Bucharest Stock Exchange (BVB) in the AeRO Premium category as of February 1, 2018, following a technical listing. Technical listing is the process by which a company shares start trading on a stock exchange without the need for any prior public offer, which means that the company’s shareholding structure is not affected in any way, and the firm decides to take advantage of being a public company, such as additional visibility, credibility or transparency.

Shares of Purcari Wineries (WINE), a leading CEE wine producer, started trading today on February 15th on the Main Market of Bucharest Stock Exchange (BVB), following a successful IPO for 49% of its shares, valuing the offering at over RON 186 million (some EUR 40 million).

Towards the end of April, new municipal bonds worth RON 555 million issued by Bucharest Municipality started trading on the Regulated Market of BVB. Overall, four municipal bonds issues of Bucharest Municipality have been traded on the Bucharest Stock Exchange since 2015.

Mid-May, corporate bonds of EUR 550 million issued by Globalworth, one of the leading real estate investment companies in Central and Eastern Europe, started trading on the Main Market. The corporate bonds of Globalworth are traded in euros on BVB, and the settlement is done directly in the European currency. For the first time in Romania, as of last year, Bucharest Stock Exchange implemented the settlement directly in euros, thus enhancing the degree of maturity and development of the local capital market.

In May and June, the Bucharest-based stock exchange witnessed several readjustments trading sessions as a consequence of ex-dividend corrections for several companies from the main index BET, coupled with domestic and international uncertainties, according to analysts.

When the first six months concluded, the Romanian capital market managed to retain a Top 5 position among the main indices of the stock exchanges from the European Union, considering a 4.3% growth rate for the main index, BET (Bucharest Exchange Trading Index). The total return index of the local market recorded a strong boost of two digits, exceeding 11,500 points.

“The investors who bought shares in the main companies listed on BVB could benefit, even under complex market situations, from the two-digit growth of BET-TR – an index which is representative of our capital market due to its consistent dividends – as it closed the first six months of the year by a growth rate of 11 percent, one of the highest yields in the European Union”, stated Lucian Anghel, President of the Board of Governors of BVB.

The total value of the financial instruments traded on BVB exceeded EUR 1.5 billion in the first half, 12 percent up from the same period last year. The average daily trading value for equities went up by 3.3% to almost EUR 10 million.

The performance of the local market was enhanced by the development in several areas meant to improve investors’ experience, which was recognized internationally by one of the most important investment research firms.

“All figures asides, the first half ended with international recognition as the global index provider MSCI upgraded the accessibility criteria for Romania for three aspects: namely market regulation, information flow, and trading, proving the projects regarding the capital market are on the right track and that investors’ perception towards the local market has improved,” said Adrian Tanase, CEO of BVB.

The stock market capitalization of Romanian companies exceeded EUR 20 billion at the end of the first six months, while the capitalization of all listed companies on the Main Market of BVB amounted to EUR 36 billion.