The management of the Bucharest Stock Exchange (BSE) and of the RASDAQ Electronic Market will present a joint position on the merger of the two stock markets in Romania tomorrow.
The idea of a merger has been mentioned quite often over the last few months, but has failed to materialise so far because of differences on how the process should be like.
The management of the Stock Exchange was saying there should a be a merger by absorption, with BSE set to "engulf" RASDAQ and its trading systems. On the other hand, the RASDAQ managers supported an option to allow both trading systems to exist but be run by a single company.
The presentation of a mutual project is the first major step towards a merger, which cannot possibly be avoided due to the consolidation of the capital markets worldwide and to the difficult situation of both BSE and RASDAQ (in term of liquidity and number of attractive companies listed).
The merger project will be publicly released after having been sent to the
National Securities Commission (CNVM) first this week.
The BSE and RASDAQ officials did not care to provide further details on the content of the project but said it was only a first draft, which could be completed over the next few months.
"Fortunately for us, we see eye to eye on the need to create a single entity by merging the two markets. We have not gone into technicalities yet, but estimate a full consolidation project could be ready in the next three months. The actual implementation duration will, however, depend on how quickly the required legislative modifications are made," Sergiu Oprescu, BSE chairman told Ziarul Financiar.
"More details will be provided on Thursday (tomorrow i.e.)," Siminel Andrei, RASDAQ chairman in his turn said.
The officials of the two markets have had several rounds of talks over the last few weeks in order to reach a common point of view, with CNVM putting some pressure on the proceedings, as well.
Sources close to the talks say the merger project will also be supervised by the Government.
The merger is bound to be difficult, because of judicial and legal differences between the two entities.
The Stock Exchange is an association of brokerage firms in Romania, while RASDAQ will become a joint stock company held by brokerage firms this year. At the same time, BSE's trading system is based on bidding, while RASDAQ's is based on negotiation.
The clearing systems in their turn are different, too, as BSE has its own system, while RASDAQ employs SNCDD (the National Compensation, Depositing and Clearing Company) for this purpose.
The BSE-RASDAQ merger is very necessary since both markets are currently seeing a massive delisting process allowed by the new capital market legislation for the companies whose shareholders hold interests above 90%.
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