Government launches BSE support programme

The government will this week launch a programme to support the Romanian capital market by listing seven major state-owned enterprises on the Bucharest Stock Exchange (BSE) and by speeding up the listing of the T-bills issued by the Finance Ministry, market sources say.

The official launch is scheduled for today, when Prime Minister Adrian Nastase is to open the trading session of the Bucharest Stock Exchange.

According to the quoted sources, the programme will include deadlines and commitments to begin the procedures for the floatation of seven companies this year, including the two Electrica branches, Transgaz, Romgaz and Transelectrica.

The listing will be made by initial public offerings of at least 5% in each of the companies.

The programme will also include measures to speed up the listing of T-bills on the Bucharest Stock Exchange.

BSE and governmental representatives were not available for comment on the launch of this programme.

"A programme to support the Bucharest Stock Exchange will indeed be launched, but I cannot provide further details on this," explained Alexandru Popa, the Prime Minister's capital market advisor.

If the deadlines are met and the measures undertaken, the programme launch could be the Romanian State's first step in supporting the Bucharest Stock Exchange, after many years of promises that never amounted to more than empty words.

Governmental and presidential office representatives, including PM Adrian Nastase and President Ion Iliescu, have repeatedly said they are supporters of capital market development, but neither of the two institutions have yet implemented concrete measures in this regard.

Moreover, the former Privatisation Authority (APAPS) made the decision to sell the last stake, of more than 7% held in Banca Romana pentru Dezvoltare (Romanian Development Bank - BRD), by direct negotiation. The Stock Exchange was thus left out of the proceedings, in contrast to the expectations of almost everyone on the capital market.

Given that the large companies of national strategic importance (which usually sustain a stock market) are still state-owned, the development of the BSE rests upon the attitude of the owner of these companies.

And since floatation comes with very strict transparency and corporate governance rules, the managers and state representatives in these companies have not favoured entry onto a regulated market. The last major company listed on the Bucharest Stock Exchange was Petrom, whose shares started to be traded in 2001.

Since then, not even listing attempts have been made, despite the fact that the Stock Exchange has been enjoying a particularly good period. Prices have on average tripled during the past three years, with the daily traded value increasing by ten times its original value during the same period.
laurentiu.ispir@zf.ro