BVB woos IT firms with overhauled trading system

Newsroom 16/09/2014 | 18:00

The Bucharest Stock Exchange (BVB) is seeking to lure high flying firms in the IT sector to list by promising an overhauled trading platform and increased visibility and financing options for companies.

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Ludwik Sobolewski, CEO of the BVB, said that the alternative trading system (ATS) would be relaunched later this year and would have a wider focus, from start-ups to established companies.

“This market offers new possibilities to businesspeople interested in development,” said Sobolewski. He added that it will not be just for IT related companies.

On September 23, a workshop will take place in Bucharest for candidates interested in listing. A similar workshop will be organized in Cluj the next day.

The CEO launched a similar market in Poland during his tenure as head of the Warsaw Stock Exchange. The platform, called New Connect, has proven popular amongst entrepreneurs and over 400 companies have listed here in the past seven years.

Strong IT listing history

According to Andrei Pittis, president of the Employers’ Association of the Software and Services Industry, the Romanian IT industry has a good image abroad and can generate confidence capital, which can get foreign investors onboard.

“For the past ten years, I have been saying repeatedly that the only thing truly missing from the Romanian economy is a functional stock exchange. The stock exchange has changed from what it was five to seven years ago and now has an element of stability,” said Radu Georgescu, founding partner of GECAD Group, a technology company.

“For IT entrepreneurs, the stock exchange is very important for various reasons. Firstly, it is a way of attracting capital; secondly, it provides a marketing element; thirdly, it is a way of making an exit; and, last but not least, it also lets investors have corporate governance. If we manage to bring the IT industry on the stock exchange, this will be a huge step for us all,” said Georgescu. “I would absolutely support the listing of IT&C companies on the BVB. A listing on the stock exchange is the best thing that can happen to a company.”

When asked why he has not yet listed any of his own companies on the stock exchange, the entrepreneur answered, “I always have projects that need financing but from my point of view, the Romanian stock exchange has not existed until now. The stock exchange has so far been an instrument for privatizing state companies and several investment funds but not a tool for technological companies.”

Around 10-20 local IT&C firms could be candidates to float on the ATS, commented the entrepreneur.

The first port of call for an up-and-coming entrepreneur is the so-called three Fs (friends, family and fools), which pundits say is a popular starting point for financing entrepreneurial projects in technology, IT, and online.

Another option to consider is scouting for a business angel. Seed or business angel financing is becoming a frequently taken path, as are venture capital funds, which are a little more rigid.

The bank is another option, if the entrepreneur is able to put on the table a very clear investment project and guarantees.

Dragos Pislaru, general manger of GEA Strategy & Consulting, said that there are “exceptional oases” in ten key sectors of the Romanian economy, not just in IT, citing energy and bio-economy as fast-growing industries.

Market reform

The profile of the Bucharest Stock Exchange has been boosted in the past two years by major listings of state-owned companies active in energy. The government raised more than EUR 800 million from the initial public offerings in gas producer Romgaz and electricity supplier and distributor Electrica. These mega-offerings were successfully carried out through dual listings in Bucharest and London. Analysts say these IPOs will help the local capital market attain emerging status and attract new investors.

At the moment the BVB is working with the Financial Supervision Authority (FSA) and the government to remove some of the red tape and additional costs that could dent the attractiveness of the platform for retail and institutional investors.

Otilia Haraga, Ovidiu Posirca

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