300,000 active investors per month, a 50 million-euro daily average value of transactions and around 130 companies listed on the market, not including those currently traded on RASDAQ market. These are the targets the management of the Romanian Stock Exchange has set for the end of the year 2010. These are highly ambitious objectives, as even the officials of the Stock Exchange themselves admit, but some of the main brokers on the market consider them to be overly ambitious, given that the current situation is far from the set targets.
With only 65 floated companies, a number which has barely changed over the past 6 years and a daily average traded value of 10 million euros, there are fewer than 10,000 active investors on the Stock Exchange each month at present. The total capitalisation of the Stock Exchange should hit a value of 40 billion euros by late 2010, according to the Stock Exchange management, compared with around 18 billion euros at the moment. This is the easiest to reach target, though, considering that the floatation of the Property Fund alone would add at least 4 billion euros to the capitalisation of the Stock Exchange.
It is the floating of new firms that the Stock Exchange management has banked on in fact when it comes to its reaching the targets for 2010. The Stock Exchange hopes to list over the next four years at least 15 major state-owned companies and at least 50 private businesses developed by Romanian entrepreneurs, which would double the number of companies listed at present. Including firms traded on RASDAQ, the number of listed firms climbs to over 3,000, but most are suspended from trading, and the rest generally have an extremely low liquidity. However, considering the progress of the Stock Exchange over the last two years, which has taken it close to the indicators of neighbouring capital markets, there are chances of strong growth. Owing to the boom witnessed during this period, the Romanian market has come to rank fourth in Central and Eastern European region in terms of capitalisation reached at the end of last year, being outrun only by Poland, the Czech Republic and Hungary.
The development of the market primarily means attracting more issuers and this is supposed to be the growth engine in terms of the number of investors on the market and traded volumes. On the other hand, brokers say the Stock Exchange should change trading costs to make them more interested in bringing new firms onto the market. The new architecture of the BSE will include the regulated market and an alternative trading system, as well as the "new market" segment.
The Stock Exchange also counts on the listing of stock of some foreign firms through the Romanian Depositary Receipts and it says it also expects an increasing number of insurance firms, as well as banks, to invest on the capital
The Romanian Stock Exchange
Targets 300,000 active investors per month, a daily average traded value of 50m euros and around 130 firms listed on the market by 2010
Its total capitalisation should surge from about 18bn euros to 40bn euros at the end of 2010
Primarily banks on the floating of an increasing number of companies to reach its targets
Brokers say it should lower its trading costs to make them more interested in bringing new firms onto the market
Plans to introduce new investment instruments to bring more investors on the market.
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