Romanian stock market makes headway at the beginning of the year as uncertainty spreads in international markets

The Romanian stock market started 2020 with a slight increase over the level from December last year, given that the BET index, which includes the most-traded 16 companies listed on the local stock exchange, except for the Financial Investment Companies, fluctuated around the 10,000-point mark. The 10,000-point threshold was breached on January 13, 2020, when the local market index saw a 12-year high. At the international level, the benchmark indices of the main stock markets also tested record levels, while also facing corrections triggered by the global uncertainties, which had made their presence felt in the markets.

“We are living in an international context marked by volatility, which stems from investors’ uncertainties about what positions they should take in the markets. Beyond external influence, domestic factors could also trigger misalignments to the trend of international markets. It is difficult, at this moment, to imagine that we will have in 2020 a growth rate similar to that of 2019, namely 35% for BET or 47% if we take into account the dividends. Should disruptive factors not occur, nor should the Romanian economy slow down, the publicly traded Romanian companies have solid foundations to contribute to the overall growth of the market this year as well”, stated Adrian Tanase, CEO of BVB.

The average daily trading value exceeded EUR 10 million in January, while the total trading volume for equities accounted for over EUR 200 million at the end of the first month of this year.

“At the end of last year, we started the most ambitious project to develop the infrastructure of the local stock exchange, once the company that will operate the central counterparty was set up. After the authorization process is completed, we will be able to relaunch the derivatives market. Beyond this project aiming to turn the secondary market more efficient, we have also established the framework for enhancing the liquidity by offering issuers the possibility to conclude market-making contracts with the market participants, a feature that finds increasingly practicability. To have a greater weight of the stock market in the economy, BVB’s efforts will have to be backed by the state authorities to support the listings of the companies and to stimulate the population to save in the securities portfolios”, added the CEO of the Bucharest Stock Exchange.

By the last trading session in January this year, the capitalization of the Romanian companies listed on BVB amounted to RON 110 billion or EUR 23 billion.