Romanian capital market goes by over 15%

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The market value of the Romanian companies listed on the Bucharest Stock Exchange (BVB) reached new highs in April, and broke the RON 120 billion (EUR 24.4) ceiling following a 20% increase this year alone. The capitalization of the Romanian companies from the main market of BVB has thus exceeded the levels recorded before the Covid-19 struck.

The BET and BET-TR indices climbed to new all-time highs in April, 15% up in the first four months. The benchmark BET index includes the most traded 17 companies except for the Financial Investment Companies (SIFs) while the BET-TR index also includes the dividends offered by the companies from the BET index. In the trading session of April 28th, the BET index reached a level of almost 11,400 points. The BET-TR index closed the same trading session at a level of 19,200 points.

“What is now worth RON 120 billion, in the long run can be worth much more” said Radu Hanga, BVB President. “We encourage as many companies as possible to go public because the presence on the local stock exchange is proof of economic health, not only of national pride” he added.

Romanian capital market

“Increasing the weight of listed companies as a percentage of GDP is a priority for the real development of the Romanian economy. We are at 12% of GDP and we continue to grow. As far as the capitalization of the Romanian companies listed on the regulated market is concerned, there is plenty of potential to exceed 20% of GDP by 2030” stated Adrian Tanase, CEO of BVB.

The total value of transactions with all types of financial instruments increased by 21.8% at the end of the first four months of this year compared to the same period last year. On the Regulated Market of BVB, total transactions of RON 5.5 billion (or EUR 1.1 billion) were made. Also during January-April, the average daily liquidity with all types of financial instruments amounted to RON 65.4 million (EUR 13.4 million), increasing by 18.9% compared to the first four months of the previous year.

The investment activity at BVB continues its upward trend in the first part of 2021, after the record results obtained in 2020 when the investors active on the Romanian stock exchange traded financial instruments totaling RON 18.3 billion, the equivalent of EUR 3.77 billion. It was the highest annual value ever recorded on the main segment of the Romanian stock market, and exceeded by almost 25% the previous record from 2007. In September 2020, the global index provider FTSE Russell promoted Romania to the Emerging Market status.

For 2020 full year, the Romanian economy shrank by 3.9%, reversing from a 4.1% rowth in 2019. The country’s gross domestic product (GDP) is forecast to grow by 5.1% in real terms this year and by 4.9% in 2022, the European Commission said in its Spring 2021 Economic Forecast released Wednesday (May 12). Investors are expecting the Q1 2021 GDP reading to come in mid-May by the National Institute of Statistics.