Romanian companies listed on the Bucharest Stock Exchange reach record highs

5/10/2021

  • The market value of the Romanian companies listed on the Bucharest Stock Exchange (BVB) reached new highs in April, and broke the RON 120 billion ceiling following a 20% increase this year alone.

 

  • The capitalization of the Romanian companies from the main market of BVB has thus exceeded the levels recorded before the coronavirus pandemic broke out.

 

  • BET and BET-TR indices climbed to new all-time highs in April, 15% up in the first 4 months.

 

  • Radu Hanga, BVB President:
    • Romania’s valuable companies receive the market certification because they are public companies. What is now worth RON 120 billion, in the long run can be worth much more.
    • We encourage as many companies as possible to go public because the presence on the local stock exchange is proof of economic health, not only of national pride.

 

  • Adrian Tanase, BVB CEO:
    • Increasing the weight of listed companies as a percentage of GDP is a priority for the real development of the Romanian economy. We are at 12% of GDP and we continue to grow.
    • It is time to make the most of the financial infrastructure because it is the type of infrastructure that connects Romania to the rest of the world in a few seconds.

 

 

The Romanian companies listed on the Bucharest Stock Exchange (BVB) have become increasingly valuable as investors have maintained their confidence in the prospects for the evolution of the local economic environment. The market value of local companies listed on BVB’s main market exceeded the level reached before the onset of the coronavirus pandemic. Thus, the capitalization of the Romanian companies present on the main segment of the Bucharest Stock Exchange broke the RON 120 billion ceiling, the equivalent of EUR 24.4 billion. This value is almost RON 10 billion above the level registered at the beginning of 2020. Only this year, the market value of the listed local companies has increased by over 20%.

“The capital market has already provided the answer to the question of when it is best to list a company, and the answer is anytime because the value of the company will be given transparently by supply and demand, and market mechanisms allow a constant revaluation of any business. Romania’s valuable companies receive the market certification because they are public companies. What is now worth RON 120 billion, in the long run can be worth much more. We encourage as many companies as possible to go public because the presence on the local stock exchange is proof of economic health, not only of national pride. The listed company status is a certification of managerial performance and allows access to faster and more efficient financing solutions. Only by listing as many companies on the stock exchange as possible will Romanians be able to fully benefit from the success of the companies in which they can become shareholders, not just customers. Basically, the stock market is more than a trading platform, it is a sustainable development environment,” said Radu Hanga, President of the Bucharest Stock Exchange.

“Increasing the weight of listed companies as a percentage of GDP is a priority for the real development of the Romanian economy. We are at 12% of GDP and we continue to grow. As far as the capitalization of the Romanian companies listed on the regulated market is concerned, there is plenty of potential to exceed 20% of GDP by 2030. This potential can be achieved only through the sustained development of the local market, both by listing new companies and increasing investor interest in existing issuers, as well as by relaunching a derivatives market that would stimulate the investment activity. It is time to make the most of the financial infrastructure because it is the type of infrastructure that connects Romania to the rest of the world in a few seconds,” stated Adrian Tanase, CEO of BVB.

New all-time highs were reached in April by BET and BET-TR indices. In the trading session of April 28th, the BET index reached a level of almost 11,400 points. The BET-TR index, which also includes dividends, closed the same trading session at a level of 19,200 points. In the first four months of the year, the Romanian capital market went up by over 15%.

 

Capitalization of the Romanian companies listed on the main market of BVB

End of trading session

 

Billion RON

April 28, 2021

122.74

April 29, 2021

120.17

April 27, 2021

120.03

April 9, 2021

119.32

April 1, 2021

119.30

Figure 1: Highest market value of the Romanian companies listed on the Regulated Market of BVB up to April 30, 2021. Source: BVB

 

The total value of transactions with all types of financial instruments increased by 21.8% at the end of the first four months of this year compared to the same period last year. On the Regulated Market of BVB, total transactions of RON 5.5 billion (or EUR 1.1 billion) were made. Also during January-April, the average daily liquidity with all types of financial instruments amounted to RON 65.4 million (EUR 13.4 million), increasing by 18.9% compared to the first four months of the previous year.

The investment activity at BVB continues its upward trend in the first part of 2021, after the record results obtained in 2020 when the investors active on the Romanian stock exchange traded financial instruments totaling RON 18.3 billion, the equivalent of EUR 3.77 billion. It was the highest annual value ever recorded on the main segment of the Romanian stock market, and exceeded by almost 25% the previous record from 2007. In September 2020, the global index provider FTSE Russell promoted Romania to the Emerging Market status.