Stere Farmache: It"s Surprising That Several Energy Companies Are Not Interested In Financing Through Corporate Bonds

Stere Farmache, President of the Bucharest Stock Exchange (BSE) is convinced that the fixed-rate debt securities will have an increasing weight within the BSE transaction volume, partially because they are quite in line with the investment culture of the Romanians.

"Fixed-rate securities dominated transactions on the Bucharest Stock Exchange in the inter-War period and I expect that it will be the same in the near future, all the more considering that Romanians have a low appetite for risk," Farmache said during a seminar on financing opportunities in crisis times.

"I expect that companies will become more interested in obtaining financing through corporate bonds. Especially the energy companies," BSE President Farmache added. In his opinion, one of the reasons why this is not happening yet could be that the management of the respective companies lack medium- and long-term vision.

He also noted that institutional investors had starting making their presence on the BSE felt, but not as much as possible. "The Stock Exchange is dominated by retail investors, but now we also have a few pension funds, for instance. However, they are not investing at their full potential, because they do not have sufficient instruments," Farmache added.

Bond transactions have gained momentum on the Bucharest Stock Exchange, even exceeding the value of stock transactions in some days. According to statistics released by the BSE yesterday, the weight of bond transactions within the overall volume of BSE transactions increased from 2% in 2008 to 13% in the first nine months of 2009.