The international market liquidity crunch will spur capital raising through floatation on the Bucharest Stock Exchange.
The following year will bring a significant number of listings on the Bucharest Stock Exchange (BSE) considering the Romanian private companies' rising financing needs and investors' strong interest in the Transgaz Medias (TGN) IPO, capital market specialists maintain.
The liquidity crunch on international financial markets, also felt on emerging markets such as Romania, is likely to render financing through banking loans more difficult, pushing a rising number of companies to seek financing resources on the stock exchange.
"We believe 2008 will be the year when IPOs are the main growth driver of market indexes, capitalisation and the value of transactions on the BSE. The role of the capital market as a financing alternative for companies is starting to shape up and we are counting on domestic companies, as well as on international companies interested in floatation on the domestic market," Stere Farmache, general manager of the BSE, told the "Secrets of Floatation" workshop organised by ZF and Badea Clifford Chance law firm in partnership with Morgan Stanley investment bank.
Next year is likely to bring several listings by some private companies, after the past two years' biggest IPOs have belonged to state-owned companies, namely Transgaz and Transelectrica.
"In the following years, we are likely to see the floatation of around 25-30 companies, mostly private ones. The liquidity crunch can put pressure on companies to seek financing on the capital market. We are preparing 4 listings for next year, of which 2 on the domestic market and 2 on foreign markets," specified Daniel Badea, managing partner of Badea Clifford Chance.
The development of the mutual and pension fund markets will also lift the number of IPOs domestically as pension and mutual funds are portfolio investors permanently seeking new issuers.
"I see a very high potential for listings on the domestic market in the next 2-3 years amid the expansion of the asset management industry, the financial system's pillar. (...)," feels Bogdan Ciobotaru, Morgan Stanley's representative for Romania.
Several private firms, including Teraplast Targu-Mures, Adeplast Oradea, Contor Grup Arad, Aro Palace and Transilvania Leasing, have voiced floatation plans for 2008. Also, from the state sector, Fondul Proprietatea and Romtelecom are also expected to go on the stock exchange.
Romanian companies listed on international markets may float on the BSE as well.
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