Bucharest Stock Exchange
|Bucharest Stock Exchange|
Bursa de Valori București
|Founded||1 December 1882
(closed in 1945 by the communist regime, re-opened on April 21, 1995)
|Owner||Listed company from June, 2010 on its own regulated market|
|Key people||Ludwik Sobolewski (CEO)
Lucian-Claudiu Anghel (President of the Board of Governors)
|Market cap||€30 billion (September 2014)|
The Bucharest Stock Exchange (BVB) (Romanian: Bursa de Valori București) is the stock exchange located in Bucharest, Romania. The total market capitalization equals almost €30 billion ($39 billion) as of September 2014. By September 2014, there were 83 companies listed on the BVB regulated market. In 2013, the indexes went up by 22.5 percent year-to-date, placing it as the 15th best performing stock exchange globally. Since August 2013, Ludwik Sobolewski is the CEO of BVB.
Beginnings of the history of the Bucharest Stock Exchange can be traced back to 1839, when the commodities-trade exchanges were established in Bucharest. It was nevertheless only until December 1, 1882 that the BVB was officially inaugurated. One week later, the first exchange rates begun being published in the Official Gazette. Throughout its existence, the activities of the Bucharest Stock Exchange were affected by the socio-political events of the time, such as the Romanian Uprising of 1907 or the Balkan Wars that took place between 1912 and 1913. The stock exchange was moreover closed during the First World War. When BVB re-opened following the end of the war, it went through a period of 7 years of significant growth, followed by a period of 7 years of accelerated loss. The activity of the Market for Effects, Actions and Exchange was stopped in 1948, with the establishment of the Communist regime in Romania and the beginning of the nationalization process. At that time, shares issued by 93 companies and 77 fixed-income instruments (bond type) were listed on the Bucharest Stock Exchange. The Bucharest Stock Exchange reopened again in 1995, after almost 50 years since it was shut down by the Communist regime. The first trading session was carried out on November 20, 1995. On that date, 905 shares issued by 6 listed companies were traded. In 2005, BVB absorbed RASDAQ – the over-the-counter electronic stock market. On February 14, 2008, Erste Bank listed on BVB and became the first international company listed on the regulated market. Subsequently, Bucharest Stock Exchange has experienced a continuous development and is now established as the main stock exchange in Romania. In 2010, Bucharest Stock Exchange listed on its own spot regulated market under the symbol BVB. In 2010, the Alternative trading system was launched by BVB for SMEs and start-up companies wanting to raise capital from the market.
Mission and Vision
Bucharest Stock Exchange (BVB) is currently building competitive capital markets in the CEE region. Its mission is to transform the capital market in one of the most active financing vehicles of the Romanian economy. BVB is therefore aiming to shape one of the most comprehensive markets in Central Eastern Europe by creating attractive opportunities both for companies and investors in a dynamic and transparent environment. BVB is working for removing the barriers which stand against the development of the local market in order to facilitate investors’ access into the market, increasing liquidity and attracting new companies for listing. All these, for the market to be classified as an emerging market.
The Bucharest Stock Exchange is a market and system operator authorized by the Financial Supervisory Authority (FSA) that manages a Regulated market (RM) and an Alternative Trading System (ATS) compatible with European standards. BVB also operates a market section called RASDAQ. The following types of financial instruments are traded on BVB: shares, rights, bonds, fund units, structured products and futures contracts. BVB operating revenues are generated mainly from trading activity, from membership and listing fees, as well as from data vending to various users.
The main market of BVB is a spot regulated market where financial instruments such as shares and rights (issued by international and Romanian entities), debt instruments (corporate, municipality and government bonds) issued by Romanian entities and international corporate bonds, UCITs (shares and fund units), structured products and ETFs are traded.
In order to be listed on the regulated market, a company has to fulfill a number of requirements prior to its listing on BVB:
- Be a joint stock company (SA)
- Have the value of market capitalization / shareholders’ equity of at least 1 million euro
- Have a free-float of at least 25% (shares not owned by the company, nor by strategic investors)
- Be active on the market for the last 3 years and have available financial reports from that period.
Alternative trading system (ATS) was created in order to allow listing of securities issued by Romanian SMEs and start-ups and trading of foreign stocks listed on other markets.
Why listing on ATS?
- It addresses all types of companies, regardless of their size or time since establishment,
- It was created for both shares and bonds , as well as for other financial instruments that do not comply with the requirements of the regulated market,
- The listing features are simplified, as there is no need for a prospectus to be admitted to trading, but only for a corporate presentation,
- The reporting requirements are low as compared to the regulated market,
- A company may prepare to get transferred on the regulated market by gradually increasing the free float, the cash.
RASDAQ market was launched in 1996 and it accomodates shares and rights issued by Romanian entities coming from the mass privatization programme. In 1999, there were more than 5,500 Romanian companies listed on RASDAQ. On September 30th, 2014 the Romanian Parliament decided that the RASDAQ market should be dissolved. The market still remains operatinal however it is no longer possible to list on it. Companies listed on RASDAQ can decide to promote to the regulated or ATS given that they fulfill the necessary admission criteria.
Bucharest Stock Exchange has seven indices:
BET was the first index developed by BVB. It is the reference index for the capital markets. BET follows the evolution of 10 most liquid companies listed on BVB regulated market, excluding financial investment companies (SIFs). It is an index weighted by free float capitalization. The maximum weight of the symbol is 20%. The main selection criterion is company’s liquidity. Starting with 2015, additional requirements of transparency, quality reporting and communication with investors will be imposed. BET index structure:
|Company||Field of activity||Symbol||Percentage in index (%)|
|SC Fondul Proprietatea SA||investment funds||FP||21,15|
|OMV Petrom S.A.||oil||SNP||18,77|
|Banca Transilvania S.A.||banking||TLV||15,96|
|S.N.G.N. Romgaz S.A.||natural gas||SNG||15,18|
|BRD – Groupe Société Générale S.A.||banking||BRD||8,88|
|S.N.T.G.N. Transgaz S.A.||natural gas||TGN||5,3|
|S.N. Nuclearelectrica S.A.||electricity||SNN||1,76|
|SC Bursa de Valori București S.A.||stock exchange||BVB||0.89|
|Index capitalization: 25,105,909,350.19 RON|
Updated October 21, 2014
BET-TR is the first total return index launched by BVB. It is based on the structure of market reference index BET. BET-TR reflects the evolution of its component shares and dividend yields offered by them. Index is composed of 10 most traded companies on BVB, excluding SIFs. Similarly to BET, the main selection criterion for BET-TR is the liquidity of the company. Starting with 2015, additional requirement of transparency, quality reporting and communication with investors will be imposed. BET-TR is an index weighted by free float capitalization. The maximum weight of the symbol is 20%.
BET-FI is the first sectorial index launched by BVB. It reflects the evolution of financial investment companies (SIFs) and of other similar institutions. It is an index weighted by free float capitalization. The maximum weight of the symbol is 30%.
BET-XT reflects the price evolution of 25 most liquid companies listed on BVB, including investment firms (SIFs). It is an index weighted by free float capitalization. The maximum weight of the symbol is 15%.
BET-NG is a sectorial index that reflects the evolution of companies listed on BVB regulated market that operate primarily in energy and utilities field. It is an index weighted by free float capitalization. The maximum weight of the symbol is 30%. Number of component shares is variable.
Index BET-BK was created as a benchmark for the fund managers and other institutional investors. The calculation methodology reflects on legal requirements as well as limits of the investment funds. It is an index weighted by free float capitalization. Number of component shares is equal 25.
BET Plus reflects the evolution of Romanian companies listed on BVB regulated market that meet the minimum selection criterion with regards to liquidity and free float. Financial companies are excluded from this index. It is an index weighted by free float capitalization. The maximum weight of the symbol is 20%. Number of component shares is variable.
ROTX is an index developed by BVB together with the Vienna Stock Exchange (Wiener Börse). It reflects, in real-time, the movement of the ‘blue chip’ shares traded on the Bucharest Stock Exchange. ROTX is an index weighted by free float capitalization, calculated in RON, EUR and USD and disseminated in real time by the Vienna Stock Exchange. ROTX is a tradable index and can be used as an underlying for derivatives and structured products.
Some of Romania’s highest-profile companies are being traded on BVB. The largest companies by market capitalization as of September 2014 are: OMV Petrom S.A., S.N.G.N. Romgaz S.A., Fondul Proprietatea, New Europe Property Investments PLC, BRD – Groupe Societe Generale S.A, Banca Transilvania, Electrica and Transgaz.
Since 2010, Bucharest Stock Exchange is listed on its own market, with a symbol BVB. Bucharest Stock Exchange has a single class of common shares and a capital of 76,741,980 lei divided in 7,674,198 shares with a nominal value of RON 10 per share. All the shares are fully paid. The free float of BVB shares is equal 100%. According to the provisions of the Capital Market Law, any shareholder of a market operator cannot directly or indirectly own more than 5% of the total voting rights. As of May 31, 2014, the Romanian legal entities constituted the largest group of the BVB shareholders (70.23%), followed by Romanian private individuals (16.78%), foreign legal entities (12.42%) and foreign private individuals (0.58%). BVB provides its investors with a newsletter on General Shareholders’ Meetings, financial statements, dividends and corporate actions of the issuer Bucharest Stock Exchange (BVB). BVB has periodical meetings and conference calls with analysts and investors.
The legal framework for exchange operations in Romania is provided by the following legal acts:
- The Capital Market Law no. 297/2004
- CNVM Regulation no. 1/2006 on Issuers and Operations with Securities
- CNVM Regulation no. 2/2006 on Regulated Markets and Alternative Trading System
Additionally, the BVB is governed by Constitutive Act of the Commercial Company Bursa de Valori Bucuresti S.A. and the Regulation on the Organization and Functioning of the Bursa de Valori Bucuresti whereas the respective markets are governed by the Bucharest Stock Exchange Rulebook for Market Operators and ATS Rulebook for System Operators.
BVB supplies its participant with a wide range of tools that provide real time prices and trading data. Some of the most popular products provided by BVB are:
- ArenaXT – provides investors with access to the live market data that professional traders rely on. It offers investors real-time, in-depth market information, delivered in a cost-effective and user-friendly way.
- ON LINE Terminal – provides online trading information based on best prices.
- ON LINE Quotes – provides online trading information per symbol.
Bucharest Stock Exchange is trading daily from Monday to Friday. The hours differ depending on the market and the instrument type. The regulated market (REGS) has pre-market sessions from 9:30 – 9:45 AM Eastern European Time (EET), normal trading sessions from 9:45 - 17:45, pre-close session from 17:45 – 17:50, closing auction at 17:50 and trading at last session from 17:50 until 18:00 PM. The Stock does not trade on Saturdays and Sundays as well as Romanian national holiday days, declared by BVB in advance.
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