FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2011
BUCHAREST STOCK EXCHANGE
2010 was the year of change for the
Bucharest Stock Exchange.
Valentin Ionescu
General Manager
2010 was the year of change for the Bucharest
Stock Exchange. With a new Board of
Directors elected in February, listing of BVB in
June and a new CEO named in September,
BVB began a process of change. BVB
struggled last year, along with other trading
venues, for liquidity, as the economic financial
crisis left deep traces in the confidence of
investors all over the world. In spite of this, the
liquidity on all markets, operated by the
Bucharest Stock Exchange, increased by 29%,
compared to 2009.
HISTORY AND DEVELOPMENT
There are more than 125 years since the first
trading floor opened its doors in the centre of
Bucharest, very close to the National Bank, on
the 1st of December 1882. This event followed
the first “Law on bourses, mercantile traders
and intermediaries” enacted in 1881, following
the French model. This bill was the legal
framework for the functioning of the stock and
mercantile exchanges in Romania.
It developed into a very dynamic exchange due
to the companies listed, mainly from sectors
like banking, mining, oil, insurance and
transport. During the wars, as the entire
Romanian economy flourished, the Stock
Exchange also recorded its booming period. In
1935 there were 56 shares listed and 77 fixed
income securities. After a peak in 1938, the
Stock Exchange was closed in 1948, when the
new communist regime nationalized all
companies.
A new beginning for the Romanian capital
market was in 1994 when Romanian Parliament
passed the first capital market law, setting up
the legal framework for creation of all new
capital market institutions.
The Bucharest Stock Exchange was re-
established in April 1995, and the first trading
day took place on 20 November, same year.
From the beginning, the entire trading process
took place in a dematerialised environment.
The most recent regulations are harmonized
with the latest EU legislation regarding the
capital market.
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The 15th anniversary of the BVB, in 2010,
found our company a listed one, along with
other more than 70 companies traded on the
main market. BVB floated its shares in June
2010 and the evolution of price and liquidity
afterwards surprised the entire market.
For diversifying the range of financial
instruments available for trading, BVB
launched the structured products market and
an Alternative Trading System for SMEs to
facilitate the financing of their projects; it also
has an international dedicated section. I am
confident that in 2011 the two market
segments will attract lot of companies and
new investors.
In order to succeed, in a more competitive
world, we want to be more dynamic and
flexible.
Institutional changes took place also during its
15 years of operation. Set up in the beginning
as a public interest institution, Bucharest Stock
Exchange went through a demutualisation
process in 2005. The BVB externalised the
registry/ clearing functions and the new Central
Depository was set up at the beginning of
2007, having the Exchange its main
shareholder. BVB, along with the Central
Depository, the Corporate Governance
Institute, the newly set up Bucharest Clearing
House for the derivatives market and Investors
Compensation Fund, is currently part of the
BVB Financial Group. Romanian Government projects 2011
• Listing of Fondul Proprietatea (Romanian
Property Fund) expected on 25th of January
2011 FP is a closed end fund, created with the
purpose of indemnification of the persons
whose properties were abusively confiscated
by the communists during the last regime,
properties which, at present, can’t be
physically reimbursed.
FUTURE OUTLOOK • SPO for Petrom expected in Q2 2010
Petrom is the largest producer of oil and gas in
SEE, is part of OMV Group and listed on BVB
since 2004. The company registered continued
growth in the last years and has a market cap
of EUR4.4 bn. Current free float is 8.24 % and
will be extended by 9.84%.
• SPO for Transgaz expected in H2 2010
Transgaz is the national operator for gas
transport and is listed on BVB since 2008, after
a successful IPO. Transgaz has a market cap
of EUR701m. Current free float is11.5% and will
be extended by 15%.
• SPO for Transelectrica expected in H2 2010
Transelectrica is the national operator for
energy transport and is listed on BVB since
2006, after an successful IPO. Transelectrica
has a market cap of EUR303m. Current free
float is 12.8 % and will be extended by 15%.
BVB projects for 2011:
• Improve the market infrastructure with mix
account system (global and individual) and
short selling on companies included in BET,
BET-FI and ROTX indices
• Increase the role of corporate governance in
the capital market
• Develop new products and services in
cooperation with other institutions (energy
derivatives, ETFs, CO2 certificates, treasury
certificates, REITs)
• Include BVB in the international flow of the
financial products and services, by trading
foreign shares
• Attract new issuers for the regulated market
in partnership with brokerage houses
• Develop the market infrastructure in order to
align trading and post-trading activities to the
international standards
• Support the projects initiated by the
Government regarding the sale through BVB of
different share packages in state owned
companies.
Fund hold shares in more than 80 companies,
mainly in the Romanian energy sector
NAV of EUR3,15 bn. as for the end of October
2010