The European Bank for Reconstruction and Development (EBRD) has acquired a 4.99 per cent stake in the Bucharest Stock Exchange (BVB), demonstrating its support for Romania’s comprehensive efforts to strengthen local capital markets.
The Bucharest Stock Exchange is at the centre of Romania’s capital markets and is the largest bourse in south-eastern Europe.
Through this equity interest, the EBRD is supporting the Romanian government’s comprehensive capital market development programme, which aims to improve the functioning of the local capital markets, enhance liquidity and increase availability of debt and equity offerings in the local capital markets.
Romania has set a goal for the bourse to be upgraded to emerging market status – whereby Romanian stocks would be included in the MSCI Emerging Markets Index –from its current placement in the MSCI Frontier Markets Index. The EBRD will support legal and regulatory reforms to help achieve this goal.
EBRD First Vice President Phil Bennett, on a visit to Bucharest, said: “The Bucharest Stock Exchange aims to act as a catalyst in financing the country’s economy. As a shareholder, the EBRD will assist in the further development of corporate governance at the bourse and in listed companies. We will work to establish the Bucharest Stock Exchange as the preferred exchange for Romanian issuers and traders, as well as for investors with an appetite for Romanian stocks and other financial instruments.”
Ludwik Sobolewski, CEO of the Bucharest Stock Exchange, said: “Our plan is to build a modern, well-performing capital market, with the Bucharest Stock Exchange at its heart. We want it to become the financial hub for southern and eastern Europe, a new centre for business and innovation, and thus to enrich the investment landscape of the region. I am proud that the BVB has a new shareholder in the financial world that demonstrates values which are crucial for economic growth and sustainable development.”
Lucian Anghel, President of the Board of Governors of the Bucharest Stock Exchange, added: “The modernisation and development of the Romanian capital market, which began around a year ago, has already brought unprecedented positive results. Important steps now lie ahead of us which will enable the full implementation of the new market architecture. We are delighted to see that EBRD appreciates this new approach, vision and leadership and we will continue working hard to achieve our common goals.”
The EBRD’s investment in Romania’s capital market infrastructure is part of the Bank’s long-term strategy to advance the development of local capital markets through investment, technical advice and support for reforms.
In Romania, the Bank has invested in the recent IPOs of electricity distributor Electrica and natural gas producer Romgaz, and has also participated in all bank bond issues in the last two years under a dedicated framework.
The Bank is also working with the BVB to improve its Corporate Governance Code for listed companies.
The Bucharest Stock Exchange has been listed on its own market since 2010. As of September 2014 it listed 83 companies including the largest corporation in Romania OMV Petrom, Romgaz, Fondul Proprietatea, BRD Groupe Société Générale, Banca Transilvania, Electrica and Transgaz. The total market capitalisation is almost €30 billion.