IPO of private companies not enough to upgrade Romania's capital market to emerging status, says BNR chief economist

IPO of private companies not enough to upgrade Romania’s capital market to emerging status, says BNR chief economist

Newsroom 02/02/2017 | 15:02

The initial public offerings of private companies cannot ensure the liquidity for upgrading Romania’s capital market to emerging status, as state companies are also needed on the stock exchange, said Valentin Lazea, chief economist at the National Bank of Romania (BNR).

„Currently the condition that has to be fulfilled on the Romanian capital market to advance in the superior emerging market status is the IPO of some big state companies, to ensure the necessary liquidity volume. Unfortunately, in the last years there was a restraint of the state in this sense. Some successful private companies IPO, such as MedLife, even if they are welcomed, cannot ensure the liquidity for emergent market advance in the superior league,” said Lazea, according to Agerpres newswire.

He added that a financing of the economy through the capital market is more advatageous for the state, as the risks via the capital market are entirely supported by the private sector.