Foreign banks have come to control, both directly and indirectly (through brokerage firms), around 21% of the share capital of the BSE. Nonetheless, they have little influence over the decision-making process at the Bucharest Stock Exchange compared with their position on the market, where they account for approximately 40% of the total value of transactions.
The Bucharest Stock Exchange charter allows only securities firms that participate in the trading system to own voting shares and implicitly have a say in terms of decision making process inside the company. Banks can only own preferential stock, and carry no voting rights.
The proposal comes in the context where foreign banks are trying to bolster their influence inside the BSE, which is likely to become one of the most important stock exchanges in the region in the coming years. Deals with BSE stock carried out in recent months point to a value of above 240 million euros for the company.
Some representatives of major brokerages are dissatisfied with the strong influence small brokerages have within the General Meeting of Shareholders, which, they say, is halting the development of the institution and of the market.
The four brokerages that came up with the proposal that banks should become full-fledged shareholders on the BSE (namely BRD Securities, EFG Eurobank Securities, Alpha Finance and Piraeus Securities), own 5.2% in the company's stock. They also asked for brokerages part of financial groups to be allowed to transfer the ordinary shares they own to parent companies without granting any pre-emption rights to the other shareholders.
US investment bank Morgan Stanley has become the largest shareholder in the BSE over the past year. It owns 5.5% in BSE stock, of which 2.8% through HTI Valori Mobiliare are voting shares, while 2.7% are preferential shares it has acquired from the market.
Brokerages controlled by Greek banks present domestically also represent an important group, and own almost 7% in BSE stock, while Austrian banks have 4.44%. The BSE also has 124 individuals as shareholders, mostly brokers who have purchased stock in the past year and now control almost 2%.
The BSE last year generated net income worth almost 9m euros, double the 2006 value. BSE management has proposed for income to be incorporated in the capital.
The BSE has a 25bn-euro capitalisation, whilst the average daily value of transactions revolved around 7-8m euros during the last four months.
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