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Sobolewski

BVB’s Sobolewski: Liquidity, the biggest challenge of the Romanian capital market

The key challenge of the Romanian capital market is liquidity, especially on the equity market, Ludwik Sobolewski, CEO Bucharest Stock Exchange (BVB), stated in a commentary published on investingromania.com.

“In the first half of 2017, BVB recorded a total trading value of equities of EUR 1.39 billion, up 49.8 percent over the same period last year. These values show a liquidity improvement, that we constantly measure through adequate indicators and which is also monitored by FTSE Russell and MSCI, the two agencies which are closely look at the Romanian capital market,” Sobolewski says.

As regards the top five companies of the BET-XT index – the blue chip index which reflects the price evolution of the most liquid 25 shares traded on the regulated market, including the SIFs – account for 66 percent of the total trading turnover, BVB official also stresses.

Moreover, there are eight companies that have passed the 0.05 percent median liquidity test (calculated as the average monthly trading volume, divided by free float).

“As a result, we avoided the situation in which the trading value would have been spread out into a very low number of companies. This has previously happened, but it is obvious now that it’s a matter of the past. The fact is highlighted by the July trading data,” Sobolewski said.

The figures of BVB’s activity in July 2017 are much better than the previous year (EUR 142.5 million in turnover in shares in July 2017 compared with EUR 91.1 million in July 2016, up by 59.4 percent).

“If we look at the turnover on all instruments – stocks, bonds and other products – we see that the activity this July was significantly higher than in July 2016 (EUR 279.9 million in July 2017, compared to EUR 99.5 million, an increase of 189 percent),” the BVB official also notes.

According to him, BVB is the second in the Central and Eastern European capital market where initial public offerings (IPO) have been successfully concluded in the second quarter of this year, with two such offerings – Digi Communications and AAGES, as per the IPO Watch Europe Q2 2017 survey carried out by PricewaterhouseCoopers (PwC).

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