Companies listed on the Bucharest Stock Exchange offered investors 100 percent growth over the last 5 years

The capital market in Romania started the year with a series of significant increases at the level of all indices. All indices of the Bucharest Stock Exchange (BVB) were in the black at the end of the first two months of this year. Companies listed on the BVB and included in the BET-TR index, which also includes dividends, ended the first two months of 2023 with an advance of 5.55%. The BET-TR index closed the last trading session in February at a level of 23,944 points. The largest increase was recorded in the index that includes energy and utilities companies, with BET-NG climbing 9.4%.

Listings of financial instruments continued at the BVB. More precisely, 7 listings took place in the first two months alone: 5 corporate bonds worth EUR 425 million, one equity listing of almost EUR 1 million, and the listing of the second ETF on the BVB. Also, during this time there was also a transfer from AeRO to the Regulated Market. From the perspective of corporate events, BVB investors analyze the financial results announced by listed companies and follow with interest the dividend proposals.

The Romanian capital market has outperformed compared to several representative indices. Over the past 5 years, the companies in the BET-TR index have provided investors with gains of 99.1%, expressed in the single European currency, above the level offered by the US S&P500 (+84.2%) and more than double the European index STOXX600 (+41.6%), according to BVB and Refinitiv data. Over the same time horizon, the performance expressed in the single European currency of the FTSE Emerging Markets total return indices was 11.7%, while the MSCI Frontier Markets was up by 1%. Past performance is no guarantee of future performance and financial markets may perform differently in the future.

Radu Hanga, President of the Bucharest Stock Exchange said: „The Romanian capital market rewarded investors with a 100% growth rate in the last 5 years cumulatively. From the perspective of the BET-TR index, which also includes dividends, Romania performed much better than the US S&P500 index or the European STOXX600 index. This shows that local and foreign investors have faith in Romanian companies and in their ability to develop. The total value of shares and bonds listed on the BVB in the first two months of this year reached EURO 426 million. We look to 2023 with confidence, we see important signals regarding the continuation of financing rounds, and the anticipated listing of Hidroelectrica will represent a catalyst for investors.”

Adrian Tanase, CEO of the Bucharest Stock Exchange said: „From the perspective of liquidity, one can observe investors are in the expectation stage. On the one hand, BVB investors analyze the financial results announced by the listed companies and follow with interest the dividend proposals. On the other hand, the market is waiting for new listings and Hidroelectrica is the most significant listing announced for this year. An important positive element is that the Ministry of Finance will continue to run Fidelis government bond issues on a quarterly basis. Looking beyond the volatility of the moment, the data show that the capital market is an effective solution for saving. A medium-term example shows that those who would have invested in the companies in the BET index structure five years ago would have doubled the value of their investments today, including dividends. The most important message for investors is not to be afraid of volatility, diversify investments and have a medium to long-term horizon.”

The positive evolution of the capital market comes after a year 2022 marked by volatility and uncertainties. At the level of the Romanian capital market, new all-time highs were recorded last year in terms of total transaction value, average daily liquidity, and number of transactions. Thus, the Bucharest Stock Exchange reached a new record in 2022 in terms of the total value of transactions carried out on all markets with all types of financial instruments after total transactions exceeded RON 24 billion, up 11% from 2021. Also, at the level of last year, the average daily trading liquidity for all types of financial instruments listed on the Regulated Market (RM) and the Multilateral Trading System (MTS) increased by 11% and reached RON 95.6 million. The investors achieved a new record in 2022 in terms of the number of transactions with all types of financial instruments carried out in the RM and MTS: 1.67 million transactions. At the same time, international uncertainties led to a decline of 1.9% for the BET-TR index at the end of last year.

The number of investors in the capital market in Romania continued to grow and reached 133,000 investors at the end of 2022, according to data from the Investor Compensation Fund (FCI). By comparison, at the end of 2021, there were almost 82,000 investors. This is a 62% increase achieved in a single year. Moreover, the figure of 133,000 investors represents a new all-time high for the capital market in Romania.

The continuation of funding rounds through the BVB is a strong, positive signal and comes after 42 funding rounds were completed on the BVB last year. The total value of last year’s funding rounds reached EUR 1.9 billion, being very close to the 2021 maximum of EUR 2 billion. In the last 4 years, 149 financing rounds took place at the BVB, which totaled EUR 6.1 billion. Out of the 149 rounds, 38 were equity issues and 111 were bond issues.