AFTER SIBIU, Dow Jones arrives in Bucharest

• Broker" Cluj launched two structured products based on the American index and is proposing that the schedule of the BSE be extended until 23:00

• "Broker" Cluj plans to launch structured products based on a domestic index

Yesterday, SSIF Broker launched two turbo certificates with American index Dow Jones Industrial Average as their underlying support, on the Bucharest Stock Exchange. Derivatives which track this index have been traded on the Sibiu Exchange since 2010.

The turbo long Dow Jones certificate will allow investors to bet on the rise of the index, whereas the turbo short certificate will allow betting on its drop.

SSIF "Broker" will serve as liquidity provider for the two products.

These products are aimed mostly at speculators, because their fluctuations are much greater than those of the underlying asset.

The general manager of SSIF Broker, Grigore Chiş, considers that the only drawback of these products is the trading schedule (ed. note: 10:15 - 18:30), which overlaps very little with the trading session of the United States. He said that this is why he has asked the Bucharest Stock Exchange to extend the trading schedule for structured products, until 23:00.

Grigore Chiş also said that he has taken into consideration the possibility of getting the Dow Jones structured products listed on Sibex, but he chose the BSE, because it already has other structured products.

Darie Moldovan, the operations manager of "Broker", says that structured products might appeal to less disciplined investors, who do not set their maximum accepted losses in advance: "With these products they can be sure they won't lose their shirt".

Broker Cluj plans to expand the offer of structured products of the BSE. According to Grigore Chiş, the next product would have a domestic index as its underlying asset.

He said: "The structured products based on the Dow Jones index are just the beginning. The CNVM has approved a general prospectus for structured products. There will be a new series of structured products, depending on domestic demand, having the well known indexes of the world market, and well known foreign stocks as their underlying asset".

The general manager of "Broker" has also said that he wants to prove that domestic brokerages can also come up with new products, even though they do not have behind them entire bank departments.

• Adrian Lupşan, BSE: In the next 2-3 years, the market for structured products will be extremely dynamic

Last year, the structured products have accounted for 4% of the revenues of the stock market, whereas the Rasdaq market only brought 2%, Adrian Lupşan, the vice-president of the Bucharest Stock Exchange said yesterday, in an attempt to emphasize the growing importance of this segment.

Mr. Lupşan considers that in the next 2-3 years, the market for structured products will be very dynamic and will grant investors access to very risky products.

The BSE has announced that the market for structured products has increased three times, in Q1 2012, compared to the similar period of 2011, amid the diversification of the offer and the increasing interest of investors in these types of instruments. The volume of structured products traded was almost 8 million units in Q1 2012, up almost 70% compared to Q4 2011, due to the extensi0n of the trading program from 16:45 to 18:30, on January 16th, 2012.

Still it wasn't all sunshine with this market. Due to some irregularities found on the structured products market, the Bucharest Stock Exchange was taken to court by an investor, together with BCR and Erste Bank. Besides the National Securities Commission has fined the former general manager of the BSE and the head of the trading department of BCR, following the investigation on the market for structured products. Last summer, in a period of high volatility, the market makers would often announce that they would suspend providing quotations for the structured products, due to technical problems.

• Darie Moldovan: "We have run tests to avoid any potential technical problems"

The officials of Broker Cluj say that they have taken all the necessary steps to avoid such incidents.

Darie Moldovan said: "We have taken all the necessary precautionary measures. We ran response tests for the system, we have identified and solved the problems which arose. I hope there won't be any unpleasant surprises.

• Investments of 350,000 Euros in upgrades

Grigore Chiş yesterday said that Broker Cluj is undergoing a large scale modernization process: "We have invested 350,000 Euros in a back-office software. On the hardware side we are cooperating with an internationally reputed company". The intermediary wants to expand the products it offers its clients.

In the first three months of this year, the profit of SSIF Broker climbed 86% YOY, to 4,251,779 lei. The turnover fell 10.7%, due to the drop in the average trading fees and due to the 2.8% drop in the volume of trades placed by the firm's clients on the BSE compared to the same period of last year.

SIF Muntenia is the largest shareholder of SSIF Broker, with a stake of 12.53%. Shareholders also include Ioan Carţiş, with a stake of 8.25%, and transportation company Intervalco Baia Mare, which holds 5.21%.