Radio România Internațional

Tag: IPO

  • Romanian stock market, on the rise

    Romanian stock market, on the rise

    Romania’s capital market went up 7.1%
    in the first 5 months of the year, as the number of investors hit a new record,
    the Bucharest Stock Exchange announced. The context is highly favourable for
    the upcoming listing of the country’s largest electricity producer, Hidroelectrica,
    which is expected to draw substantial capital as of July.


    Eight million Romanians will be
    able to benefit from the listing, thanks to the stock to be purchased by
    private pension funds, and a large number of business people will be able to invest
    directly in the company, the Bucharest Stock Exchange president Radu Hanga
    said.


    According to Hanga, Hidroelectrica’s
    standing and the size of the transaction, expected to reach some EUR 2 bln,
    indicates that the local stock market has grown to maturity, and the success of
    the operation will contribute significantly to strengthening the confidence of
    local entrepreneurs and investors in the potential of the Romanian capital
    market.


    The Hidroelectrica IPO (Initial
    Public Offering) will be the most important event in the forthcoming period
    for Romania, in economic terms as well as in terms of image, and one of the biggest
    in the world at the moment, the Bucharest Stock Exchange chief also said.


    Hanga explained that the transaction
    is critical for Romania, with significant implications for the country’s
    inclusion in the MSCI emerging markets index. At present, MSCI rates Romania as
    a frontier market, whereas the second-largest relevant company, the FTSE, upgraded
    Romania to secondary emerging market status in 2020.


    The sale by the Proprietatea Fund of
    its 20% share in Hidroelectrica takes place in a positive context. The number
    of investors in the Romanian stock market was over 141,000 at the end of the
    first quarter of 2023, compared to nearly 54,000 in 2019. This accounts for a 160%
    rise in the past 5 years.


    Also, overall listings with the
    Bucharest Stock Exchange amounted to over EUR 1.8 bln in the first 5 months of
    this year, in spite of international market volatility. As many as 7 corporate
    bond issues for a combined EUR 1 bln, and 5 Fidelis state bond issues totalling
    EUR 618 mln. were listed. Over the past 5 years, the Bucharest Stock Exchange
    has listed 163 financial instruments amounting to a combined EUR 8 bln,
    offering investors returns of over 100%. (AMP)

  • Electrica Goes Public

    Electrica Goes Public

    Financial experts say the decision to take public the state-owned electricity supplier Electrica, otherwise a profitable company, is not just a bold move, but a historic decision for the Romanian State. Romanian Energy Minister Razvan Nicolescu said this would be the biggest listing ever on the Romanian capital market. Figures speak for themselves. The state wants to sell the majority stake for at least 435 million euros. The money will support Electrica’s investment plans over the next few years.



    The first subscriptions for the company’s IPO were filled on Monday, June 16, while the deadline is June 25. Eighty-five per cent of the majority share package addresses institutions, while the remaining 15% can be bought by small investors. Prices range between 2.5 and 3 euros per share. In an attempt to make the shares more appealing, the state also offers certain discounts. Investors buying between 1,000 and 20,000 shares will get a 5% discount. Individual investors see the listing as a good profit-making opportunity and a chance to diversify their portfolio, given that bank deposit rates have gone down in recent years. Lucian Anghel, the president of the Bucharest Stock Exchange explains:



    Lucian Anghel: “Electrica is a highly profitable company. Last year it reported profits of nearly 70 million euros. So investing in Electrica can be a genuine alternative for natural persons, considering that bank rates have dropped dramatically of late and that the inflation rate has hit a minimum low. Therefore I expect many Romanians to invest in order to diversify their portfolios”.



    The listing however has one drawback. The company has double charged its clients for green certificates, and the National Energy Regulatory Authority has decided that 11 million euros in undue revenues should be fully returned to home users. The money will be refunded gradually, by slashing electricity supply charges.