Over half of BVB investors are more interested in buying than selling shares in 2023

Aurel Constantin 18/04/2023 | 15:16

Cornerstone Communications, a local consulting firm specializing in investor relations and capital markets advisory, together with MIA Marketing, a Romanian market research company, has concluded a new edition of the Market Pulse study dedicated to the capital market and retail investor behavior in Romania. The research was conducted between December 2022 and February 2023 on a sample of 326 people. It focused on the investment habits of local retail investors with exposure to companies listed on the Bucharest Stock Exchange.


Our study is the first exercise of its kind in the modern history of the Romanian capital market. The last two years have been a period of intense activity – a record number of listings and a major health crisis, each of these factors leading to an influx of new investors. The number of retail investors in Romania is still at a low level compared to other countries in the region, but nevertheless, the local retail investor base is solid. This has led to the revival of the Bucharest Stock Exchange as a financing tool for Romanian entrepreneurial companies. However, to develop the market, we all need to understand why people invest, and issuers need to know what investors are looking at to meet their needs better. In this context, the most worrying conclusion of the study is the gap between the short-term investment horizon of most investors and the long-term perspective of entrepreneurs. This gap needs to be addressed through transparent communication between issuers and shareholders to manage the expectations of both entrepreneurs and investors,” stated Zuzanna Kurek, founder, and CEO of Cornerstone Communications.

The main criterion for participating in the study was that respondents had capital invested in shares of companies listed on the Bucharest Stock Exchange at the time of the research. Regarding the markets where their shares are listed, 55% of the respondents stated that they hold shares listed only on the BVB, and 45% hold shares of companies listed on the BVB and other stock exchanges. These figures show a reversal of last year’s trend when only 39% of respondents held shares listed only on the BVB. People who own shares listed on the BVB have diversified portfolios, but the proportions of respondents who also hold other types of investments are largely lower than last year: 42% hold bank deposits (vs. 56% in 2021), followed by real estate (38% vs. 52% in 2021), government bonds (34% vs. 33% in 2021), bonds (29% vs. 32% in 2021), cryptocurrencies (20% vs. 62% in 2021) and precious metal (9% vs. 38% in 2021).

Market Pulse research respondents stated that their portfolio comprises, on average, ten listed companies. 78% of participants hold both shares listed on the main market of the BVB and the AeRO market. In addition, 15% of respondents hold shares listed only on the Main Market, while 7% are investors in companies listed only on the AeRO market. Regarding the structure of investments in the two markets, the average investor’s portfolio on the BVB consists of 63% shares listed on the Main Market, with the remaining 37% on the AeRO market. Compared to the previous edition of the study, there is an increase in investor interest in the AeRO market. In 2021, only 54% held shares listed on both markets and 44% were investors in companies listed only on the Main Market. The market split of shares held also confirms this, with 76% of shares listed on the Main Market and only 24% on the AeRO market in 2021.

The results of the second edition of the study show us that after an experimental 2021 and 2022 marked by multiple turbulences, investors are moving away from the crypto and precious metal markets. They prefer to maintain an increased interest in Romanian and international equities and fixed-income generating instruments such as bank deposits or government bonds. Regarding capital market activity, we note that they prefer to be cautious about local market performance amid fears of a potential recession in Europe, inflation that does not seem to be decreasing at the expected pace, and interest rates that remain high. Naturally, these three factors influence their expectations for this year’s performance of listed companies. Thus, we note low confidence in the growth potential of the retail, real estate, and construction sectors among investors participating in the study. On the other hand, it is interesting that they believe that the agricultural sector will perform better in 2023 compared to last year when it faced natural challenges, as well as those caused by the war in Ukraine,” stated Ciprian Zamfirescu, MIA Marketing Partner.

Regarding reasons for investing in the BVB, 78% of respondents mentioned making a profit on their capital, similar to the percentage in 2021. Also, 59% of study participants invest to diversify their investments, and 46% to “retire” earlier. The criteria for choosing the companies indicated by investors are the company’s development plans, professional management, profitability evolution, the financial results obtained in the last three years, and the entrepreneur’s reputation behind the company. On the other hand, the main barriers to investing in companies are low trust in the company’s management, lack of understanding of the products or services offered by the company, low growth prospects, low trust in the entrepreneur, and high debt levels.

Most of the respondents’ investments are made in the energy/utilities (80%), IT&C (78%), and financial banking (72%) sectors, with the dynamics maintained from 2021. These are followed by sectors such as agriculture (57%), industrial production/construction (48%), and real estate (39%). Regarding the sectors with the best-expected development in 2023, 76% of respondents mentioned the energy/utilities sector, 61% – IT&C, and 45% – agriculture. At the other end of the spectrum, the sectors seen by investors as having poor performance this year include commerce and retail (64%), real estate (63%), and industrial manufacturing/construction (53%).

In 2023, most investors (56%) expect a discrete evolution of the Romanian market, with some sectors performing better than expected and others performing worse. At the same time, 30% of respondents expect a positive development, with an increase of more than 15% in the main indices, and only 14% think that the main indices will decrease by more than 15%. In terms of events with a potential negative impact on the market, the most frequently mentioned by investors were a recession in Europe (64%), high inflation (55%), rising interest rates (52%), a global financial crisis (43%) and the continuation of the war in Ukraine (40%).

Concerning the timing of the decision to invest in the BVB, most respondents mentioned that they first invested in the stock market more than ten years ago. In the last two years, 19% of respondents decided to invest in the stock exchange, while the first investment in the stock exchange three years ago was the moment chosen by 16% of participants. Regarding trading activity, 43% said they traded monthly, 23% said every two to three months, and 17% traded weekly or more often.

Investors participating in the study indicated that, on average, they hold a share in their portfolio for about 20 months. Thus, 63% of respondents hold a share for more than two years, 19% hold a share for one to two years, and 13% for six months to one year. In relation to the type of shares preferred, 53% of participants equally prefer shares offering a high dividend and those with significant growth potential. On the other hand, 31% of respondents said they prefer stocks with high growth potential, while 16% prefer those with high dividends. These results are also confirmed by the proportion of investments in the two types of shares, with 61% of investors holding shares with high growth potential and 39% those with high dividend yield. Compared to last year, there is an increase in investment in companies with high growth potential, with the proportion in 2021 being 56% to 44% in favor of them.

In 2022, 74% of investors bought more shares than they sold. For 15% of respondents, purchases and sales were roughly equal, while only 11% sold more shares than they bought. For 2023, 55% said they would mainly have a buying position in the stock market, 40% said they would hold their positions, and only 5% expected to sell the shares they own and do not intend to invest more actively.

The study conducted by MIA Marketing includes responses from 326 retail investors who, at the time of the survey, had capital invested in the Bucharest Stock Exchange. Of the respondents, 26% were aged between 18 and 35, 41% were between 36 and 45, and 33% were over 46. Regarding their education, 95% of the participants have higher education, while in terms of occupation, 52% are employees, 30% are entrepreneurs, and 18% are in another situation (e.g., self-employed, student, etc.).

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