ELECTIONS AT THE BUCHAREST STOCK EXCHANGE Who"s who...and who"s fighting who

Four sides will square off today at the General Assembly of the Bucharest Stock Exchange, scheduled to begin at 10 AM at the Intercontinental Hotel of Bucharest, for the election of a new Board of Directors and of a new chairman for another four year term.

All three candidates for the position of chairman of the BSE - Stere Farmache, Mircea Botta and Dan Paul - have one group of brokerage firms behind them, but there is a fourth group of brokers with significant stakes in the BSE that doesn"t have its own candidate.

Around 35% of the BSE is held by brokerage firms (either independent or who haven"t revealed who they"re siding with), as well as by individuals with small holdings, who options are easily changed, or are simply unknown.

• 1. Stere Farmache

The current chairman of the BSE Stere Farmache, who has been severely criticized lately for his lackluster mandate, seems however to be the most powerful candidate, as he seems to have gained the support of the small shareholders, whom he seduced with his seriousness showed throughout his fifteen years in service of the stock exchange, both as general manager, and as its chairman.

With the exception of those owned by "Banca Transilvania", "Raiffeisen" and "Carpatica", he seems to be a favorite with brokerage firms owned by banks, who like him for his distinction and sobriety, especially since he is now a banker himself, being the vice-president of "Alpha Bank".

Farmache has "fans" (especially in Moldova - Focşani and Iaşi in particular -, but he also gets his support from Craiova, but it"s not known where the brokerage firms that gravitate around SIF-Oltenia stand).

So we can expect Stere Farmache to get at least 22% of the votes, but this could very likely go as high as 36-40%.

• 2. Mircea Botta

The head of Timişoara based "Romcapital", Mircea Botta is a rising star among brokers (even though we can"t use the phrase we would have liked - "Botta is the new wave of market personalities" -, since remarkable young brokers are few and far apart).

Botta seems to have the support of Rareş Nilaş of BT Securities and is betting on the traditional support of Mirela Ionescu of "Raiffeisen", as both of them seem to need backing themselves for the seats on the Board of Directors of the BSE, for which they are running.

There are whispers among the community of brokers about a potential agreement between Mircea Botta and Sergiu Ovidiu Mugur Pop, the chairman of the Central Depository, with Pop being interested in separating the Depository from the BSE Group (or somehow increasing its independence) and turning it into a bank (for which it is said that it received the on principle agreement from the Central Bank after increasing the capital of the Depository to five million Euros).

And while brokerage firms in Moldova back Farmache, Botta seems to have the support of brokerage firms in Transylvania, so he may get the votes of IFB Finwest Arad, Target Securities and others.

The numbers seems to work in favor of Botta, who seems guaranteed to get 9.5-11% of the votes, but counts on getting an additional "block" of 17% by taking away Farmache"s votes, which would get him a minimum of 28%, against Farmache, who would then drop to around 19%.

• 3. Dan Paul

The chairman of the Association of Brokers Dan Paul considers himself "the man of the hour" and pursues his goals unrelentingly, regardless of circumstances, so, even though he is only expected to get the least number of votes, in his own eyes at least he has a real chance to win.

Apart from his own stake of 1.5% in the BSE, (and the 0,12% stake of the Association of Brokers), Dan Paul seems to have the backing of brokerage firms "Confident", "Prime Transaction" and "Elda Invest" of Galaţi, each with 1.5%.

Most likely Dan Paul expects this core total of around 6% to be supplemented by snatching away votes from other candidates.

As his chairman of the Association of Brokers, Dan Paul has ties of a more personal nature to brokers themselves, than with the owners of the brokerage firms.

Some rumors say that the proxies of brokerage firms that will attend the General Shareholders" Assembly today could vote against the indications of their principal; as the votes are secret, they could very well vote for Dan Paul without anyone being able to prove that they went against the true option of the shareholder of the BSE they were sent to represent.

When looking at him, Dan Paul"s efforts make him similar to Napoleon, because his main goal today is to at least come out second, to avoid getting eliminated from first round (the candidate with the least number of votes leaves the tournament and the winners got to the second round).

Traditionally, between the voting rounds, the participants in the Shareholders" Meeting go out in the lobby, they smoke, drink coffee and...

Why of course, they remake alliances, renegotiate and ... switch sides, after seeing the number of votes that become available after the elimination of the third candidate.

If they get past the first hurdle, than that 10-15 minute break between the 10-15 minute could make or break the candidature of Dan Paul, so even though he only starts with 6% of the votes, he has a shot at winning the election.

• 4. "The Ţepeş Cartel"

The majority shareholder of HTI Valori Mobiliare - Daniel Ţepeş, spearheads the offensive of the brokerage firms operating on the Sibiu Stock Exchange, through his adamant statement on the matter of the competition between the two exchanges and through his holdings in both (he is said to own or control 9% of the BSE through two companies and a few individuals), and by the fact that his brokerage was one of the first commodities brokers of the Sibiu exchange.

Apparently "Broker" Cluj, with its 3% stake in the BSE, stands behind Ţepeş, as does "Nova Invest" of Satu Mare (1.5%).

"Muntenia Invest" (around 1.5%) is also part of this group, which would give the "Ţepeş cartel" 15% of the votes, but according to some voices, it may get 17 to 20%.

"The Ţepeş cartel does not have its own candidate, but it did does have its own interest: the merger of the two exchanges.

Because of this, it seems unlikely Dan Paul would get the votes of the Cartel, since he openly spoke out against the merger.

That leaves Farmache and Botta "in the cards", with each of them counting the votes of the "Ţepeş cartel" in his favor.

The votes of the "Ţepeş Cartel" will most likely decide the fate of the election - it"s another way of saying that the Sibiu exchange is essentially the party that has the last word on who gets to be the chairman of the Bucharest Stock Exchange.

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The old "guard" of the Bucharest Stock Exchange - Sorin Ovidiu Vîntu, Siminel Andrei, etc. - seem unfazed by the election, even though the latter will attend the General Assembly in person, by modestly running for a seat on the Board of Directors.

Each of them holds at least 3%, but it is unknown to whom this 6% would go, even though some say it could go to Stere Farmache.

At last, the Great Unknown is the 30% of the number of small shareholders, whose preferences are unfathomable.

There is a possibility that most of them will not attend the General Shareholders" Assembly. Just as most of those that do will probably go with the candidates that are most likely to win, even though around 6% of those were helped to become shareholders from speculations made by Cristian Sima, Daniel Ţepeş and others. It can be assumed that most of them will issue a proxies to Sima and Ţepeş.

One mention: this article which looks exhaustive, is just a synthesis of data collected from the market - it could have been far more comprehensive.

But making it longer would have made today"s election seem more important than it actually is: after all, today it"s about changing the management of a company that is static, outdated, which went from becoming the most important stock exchange in the Balkans to just looking to survive.

Yes, in theory - a national stock exchange has a key role in the economy of the country, and the chairman of the stock exchange can become one of the top five persons in the country.

But that"s only in theory.