English
The Romanian stock market should develop and carve out a niche for itself in the financial sector dominated by banks, and the authorities seem ready to help it, at least judging by their statements.
About 60 American investors were told, at the "Romania Investor Days" in New York, that Romania wants a strong equity market and that it is working towards achieving that goal.
Of course, words are one thing and facts are another, but all the stock market community can do is have faith in the statements submitted by the Cabinet of Prime Minister Victor Ponta, even though, in recent times, the government has upset investors quite a bit with surprise measures, such as the notorious tax on special constructions.
As the banking sector is distressed, demand for financing may turn towards the Bucharest Stock Exchange, but it also has to be able to handle it.
Bogdan Olteanu, vice-governor of the National Bank of Romania says that he would like to see a balance: "Banks hold the largest weight in the Romanian financial sector, too much so, I would say. We would like to see a balance in that regard.
We are a European country, and the banking sector will continue to hold a significant weight, but we hope that the Bucharest Stock Exchange will grow and give banks a break".
In his opinion, Romania will be more likely a destination for the capital flows, then one that would see capital outflows, due to the consolidation of the public finances, following the agreement with the IMF.
"Financial intermediation is a rather small sector in Romania compared to the region and it is shrinking due to the regional phenomenon called deleveraging", Bogdan Olteanu also said, who went on to say: "Money is becoming increasingly < patriotic > in these times and it is trying to finds its parent country, even in Europe".
According to James Stewart, a vice-president of Raiffeisen Bank, even though the Romanian market is unfriendly, some good things have happened lately which are worth mentioning: "The National Bank has understood the importance of the stock market in relation with the economy and it is supporting a few projects initiated in that regard, the corporate bonds segment has begun showing signs of life - in the last few months there have been four issues, of which one by Raiffeisen Bank, and when it comes to IPOs, several companies are considering going public. Furthermore, under the patronage of the Financial Supervision Authority (ASF), a working group has been created, which includes the NBR, the BSE, the Ministry of Finance, private local institutions, which is intended to eliminate the obstacles which are preventing the barriers for developing the stock market and the move from the status of frontier market to that of emerging market.
These include: amendments in the fiscal reports, in the manner of voting in the general shareholder meetings, corporate actions, the clarification of the taxation issues.
The ASF has made a commitment to simplify its regulations concerning corporate bonds, GDRs, in order to increase market confidence, to increase liquidity, to cooperate with the Ministry of Finance to amend the Fiscal Code, to simplify the voting procedure in the General Shareholder Meetings, to standardize the reports of the issuers, so that they get presented in English. Next week, the group will present its first statement concerning these barriers".
Relying on their experience, investors are not so sure that all these things will be solved anytime soon. "The ASF moves very slowly, which frustrates investors," one attendee said.
• Dragoş Andrei: "We are determined to turn the stock market into an instrument for financing the economy"
Dragoş Andrei, advisor to the prime-minister, conveyed a message from Victor Ponta. According to the latter, the Government is determined to turn the stock market into a tool for financing the economy, "especially in a banking sector as difficult as the one in Europe".
Mr. Andrei said that 2013 was a crucial year for the Romanian stock market, mentioning the IPOs of Nuclearelectrica and Romgaz. "Soon, they will be followed by Hidroelectrica, Electrica, CE Oltenia", he said.
The advisor to the prime minister has also included in his speech a diplomatic message, as lately, the Romanian authorities have been admonished due to the amendments of the Criminal Code of Law, as well as due to the introduction of some taxes.
"This development in Romania would have been impossible without the strategic partnership with the US", Dragoş Andrei said on behalf of the prime-minister.
In addition, the Adviser has asked investors to report to the Government their problems and concerns: "We are aware of the problems that exist in Romania and, with the help of some NGOs, of the AmCham, the Council of Foreign Investors, we are trying to make a plan to eliminate these obstacles, not just in the stock market, but also in the functioning of the administration."
Mr. Andrei said that in this week's meeting, the Government presented a draft action plan for solving these administrative problems: "A business plan of that kind for Romania will probably be ready in 2014. We are going to present it and invite investors to share their opinions on it".
• Gabriel Dumitraşcu: "The energy sector will need several billion Euros in the next ten years"
Gabriel Dumitraşcu, head of the Privatization Division of the Department for Energy, has presented to the investors the program of IPOs agreed for this year - Hidroelectrica, Electrica and CE Oltenia. He said: "The objective of the listings program is to finance the energy sector in Romania, which needs several billion Euros, in the following ten years. A large part of this amount will be raised from the stock market".
Gabriel Dumitraşcu was asked whether the state would still sell stakes in companies such as Romgaz, Nuclearelectrica or Petrom. He said: "We are analyzing the idea, but we do not have a decision for the moment. We are preparing the National Energy Strategy and we will probably have an answer by the end of the year".
• 100 bilateral meetings
Around 100 bilateral meetings between the officials of Romanian companies and American investors have been scheduled as part of the "Romania Investor Days" event, according to the organizers. Some of the participating companies included OMV Petrom, BRD, Romgaz, Nuclearelectrica, Transgaz, Transelectrica, Hidroelectrica, Electrica and the Oltenia Energy Complex, the BSE, the Proprietatea Fund, SIF Oltenia. Their partners of discussion included BlackRock, City of London, Firebird, Abrams Capital, Cartesian Advisors.
• Olteanu: "Romania did not spend public funds to save the banks"
Romania did not spend public money to save the banks, Bogdan Olteanu responded when asked to specify the method used to rectify non-performing loans.
"Romania has the legal framework for this process - the bridge bank", he responded, and he went on to say: "If the banks intended to separate the good and the bad assets, we would leave the private sector handle it. We have created a bad bank in the past in the public sector, and its management did not prove something that would please the taxpayers. Some banks have conducted an internal separation of the assets.
I can tell you that in Romania we lack a market for distressed funds. There aren't many investors. There are many opportunities, of course, at the fair price. Because of that low liquidity, the banks have been trying to save everything they could".
Euro
Dolar SUA
Franc elveţian
Liră sterlină
Gram de aur
