Romania needs more privatizations, says Mobius

Mark Mobius, the executive chairman of Templeton Emerging Markets Group, says Romania has to privatize more state-owned enterprises (SOEs) and build up a strong pipeline of IPOs that would generate fresh funding for investments in these companies.

Mobius said in a blog post that Romania could become one of the fastest growing economies in the EU, if the government implements necessary reforms, including that of SOEs. He called “encouraging” the government’s plan to secure a new loan deal with international lenders.

“While recognizing the constant efforts made by authorities to stabilize the country’s macroeconomic indicators, we think Romania still needs to further reform to remain competitive and reignite growth. From our point of view, more privatization is needed as the state still maintains majority ownership in many sectors of the economy which are in need of investment that cannot be financed by the state budget alone,” said Mobius.

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Franklin Templeton is the sole administrator of the Property Fund – the EUR 3.4 billion closed-end fund whose portfolio includes minority stakes in SOEs.

Mobius said that “a robust pipeline of IPOs” would strengthen Romania’s competitiveness by boosting the capital markets and provide financing for investments in SOEs.

The government outlined plans to list minority stakes in SOEs active in the energy sector later this year and in 2014.

Ovidiu Posirca