Annual volume of derivatives transactions on the Bucharest Stock Exchange equals daily volume on Sibex

Even though stock or forex derivatives are extremely popular on the foreign markets, their turnover on the Bucharest Stock Exchange remains extremely low.

Thus, two years after launching its own derivatives platform with much ado, the BSE has yet to pose a serious challenge to the futures market of the Sibiu Exchange (SIBEX), which is currently the main player on this segment.

Between the beginning of the year and August 21st, futures transactions recorded on the Bucharest Stock Exchange had only amounted to 22.36 million lei for a number of 5,263 contracts.

The Sibiu Exchange however has enjoyed increased interest from investors, with over 1.44 million contracts concluded in the first seven months of this year. On an average day, SIBEX sees around 10,000 contracts, worth over 12 million lei.

Alin Brendea, vice-president of brokerage firm "Prime Transaction", considers that the BSE"s only real chance for growth on the derivatives segment is to bring in a market marker that would provide the needed liquidity, which in turn would bring in investors.

"We are seeing a low number of transactions because derivatives segment of the Bucharest Stock Exchange is still in its early stages, compared to the Sibiu Stock Exchange, which is a lot older and therefore has acquired investor loyalty", Mr. Brendea added.

On the foreign markets, derivatives are extremely sought after by investors. The most active derivatives markets in Europe are EUROEX, Liffe NYSE Euronext and OMX.

The Warsaw Stock Exchange, the most developed in the region, saw an impressive number of contracts this year (over six million), being ranked the fourth most active capital markets in Europe.

The first futures transactions on the BSE were completed at the end of 2007, for the BET index, and in 2008 the BSE introduced futures contracts for 10 of the most liquid stocks - Erste Bank, the FICs (SIFs), Petrom, Transelectrica, Transgaz and Banca Transilvania as well as for the Euro/Leu and Dollar/Leu exchange rate.