Bogdan Tudorache

Ordinance 114 introduced an uncertainty in the market due to legislative instability, and it is difficult for investors to estimate the future profit of Hidroelectrica, which makes it hard to sell, according to Călin Meteş, vice president and executive director of Franklin Templeton Investment.

„Our first choice was always listing it on the Stock Exchange,” Meteş explained, „but for this, the shareholders’ approval is needed.” Unfortunately, the state has not made any move towards listing, of late.

And now investors, due to GEO 114, have been cast away. „An investor, in order to invest hundreds of millions or billions of euros in a country, needs legislative stability. And all energy companies are postponing investment decisions because they do not have that security for the future,” he added.

Also, the Bucharest Stock Exchange will be affected, especially by the possible disappearance of the pension funds. „The most important local investors in BSE are strongly affected by GEO 114, I am referring to private pension funds investing around 2 billion Euros and much of the assets are in Romania, assets with which they have been listing on stock exchanges. The provisions of the ordinance will lead to the dismantling of these pension funds, because it does not make sense for them to come up with additional capital. What is the reasoning? 70% of your assets are invested in government securities, and the state says it must come up with additional capital because it has risks, but the risk is in government bonds,” Meteş said, at the ZF Power Summit event in 2019.

„The solution would be to completely eliminate this ordinance. It has introduced so much market uncertainty, and the long-term impact is very difficult to quantify … For now, only the deadline for passing on turnover is extended… Any subsequent government measure that impacts on these sectors should be taken in consultation with companies. This is about the partnership between government and companies.”