The local capital market (the regulated segment and the multilateral trading system – SMT) reached a market capitalization of 211 billion lei in 2022, down 15% compared to the previous year’s level, amid geopolitical and economic uncertainties, according to the sixth edition of the report “Valuation multiples of companies listed on the Bucharest Stock Exchange and of the local mergers and acquisitions market,” carried out by PwC Romania. The downward trend of the stock market capitalization continued in the first three months of 2023 compared to the same period of the previous year, but reversed after the successful completion of the listing of the energy company Hidroelectrica in July 2023.
According to the study, the first five most traded shares on the regulated market in 2022 were those from the oil and gas sector and from the financial services sector, namely OMV Petrom, Fondul Proprietatea, Banca Transilvania, BRD Group Société Générale and Romgaz.
At the same time, green and social financing have gained more visibility on the local capital market recently, becoming more and more attractive to local and international investors, as well as to companies and local authorities.
“Since the outbreak of the pandemic in 2020, the economic context in Romania has been volatile, supporting uncertainty among investors and in various sectors. Even though there were no new share listings on the main segment of the Bucharest Stock Exchange in 2022, SMT continued to be attractive to investors and small/medium-sized companies registering a total of 11 new share listings. The year 2023 is different considering the success of the listing of the Hidroelectrica company on the main segment of the stock exchange, a fact that brings BVB closer to the qualification of the emerging market state by Morgan Stanley Capital International, which implicitly becomes a much more attractive stock market for foreign investors,” said Sorin Petre, PwC Romania Partner.
The market capitalization on the main segment of the BSE in the year ended March 31, 2023 was 204 billion lei, registering a decrease of 5% compared to the same period in 2022, while the average monthly traded value for the same period almost halved.
“Although in the first three months of 2023 the stock market capitalization was on a downward trend compared to the same period of the previous year, in July 2023 the listing of the largest green energy producer – Hidroelectrica was successfully completed, which brought an important increase in liquidity and confidence in the local capital market. The BVB was thus propelled onto the scene of attractive international stock exchanges, especially because the Hidroelectrica listing represents the largest IPO completed in Europe and the third globally from January to July 2023. It is also the largest share listing in the history of the BVB, surpassing that of the Electrica company in 2014 (the value attracted from the Hidroelectrica listing was 6 times higher than that of the Electrica IPO). Analyzing the latest data, we see an increase in capitalization on the regulated segment of BVB to 270 billion lei, from 197 billion lei in 2022,” added Raluca-Alexandra Capațina-Stoica, Senior Manager PwC Romania.
As for the traded value, on the regulated market it increased by 16% in 2022 compared to the previous year, to 12.8 billion lei. In the last 15 years, the lowest value traded was recorded in 2009 (5.1 billion lei), when investor confidence was severely affected by the large corrections of 2008, while the highest level was recorded in 2007 (13.8 billion lei), before the financial crisis.