The market capitalization decreased since the beginning of the year, while the BET index lost 8-10%, but energy IPOs could revive listings in Bursa, says the president of the Bucharest Stock Exchange (BVB), Ludwik Sobolewski.
“Liquidity is lower due to external factors, whom we all know. If we look at volume – the number of shares – the decline is not so great between the 2013-2014 period, that had the best years, and period of 2015-until now. The market capitalization decreased during this period. From the beginning of the year, we had a decrease of 8-10% of BET,” said Sobolewski for Bursa.
“The lack of privatizations is was very important. Now it is crucial! I would say that the listing of Hidroelectrica is the last chance to be put on the watch list in order to be promoted at the emerging market status and change the perception of the Romanian capital market. Last chance in the medium term,” he said.
Sobolewski argues that many companies do not qualify for the MSCI criteria that would upgrade Romania to the emerging market status from the current frontier market positioning.
“Let’s review the companies that are taken into account (n.r. for promotion to emerging market status, the rating agencies require that three listed companies meet the criteria of liquidity, capitalization, free float). Banca Transilvania is listed, it is one of those companies that meet the criteria for capitalization, daily liquidity and free float. Petrom is certainly not on the list because it does not meet the criteria for free float and daily liquidity. I have no idea what strategy does Fondul Proprietatea have on what to do with its package of 19% of Petrom,” said Sobolewski.
“Unfortunately, BRD does not meet the criteria for free float. Electrica’s market capitalization is below the criteria required by MSCI. Romgaz is on the limit. With Hidroelectrica, we can meet the minimum number of three companies, which does not guarantee that we will put on the list immediately. May follow a bunch of conditions … Hidroelectrica should be listed only at the BVB, because otherwise we will not have liquidity. Then, a package of 15% is not enough,” said BVB head.