New director, new strategy for the Bucharest Stock Exchange

Bonds will unlock the cash flow

After the resignation of Stere Farmache as managing director of the Bucharest Stock Exchange, Anca Dumitru (photo) was appointed by the Board Council as interim for six months, receiving CNVM permit on January 16.

The BSE’s strategies to counter the effects of the crisis have to main targets – developing fixed-income instrument market and opening the stock market to investors.

Anca Dumitru said that generally, the strategies are those proposed by the Board and drafted together with the Government.

“Apart from the projects, we have the difficult task to reduce operational costs, as the entire market is experiencing a special situations that calls for special measures”, said the managing director of BSE.

In the last period, the market proved that fixed-income instruments have been extremely attractive for investors who are now in wait-and-see mode.

“In times of wide-bandwidth variations of prices, investors are more reluctant in investing in stocks. Thus, it is certain that fixed-income instruments are more attractive, because they know what is ahead for them and the length of time over which the investment is made”, said Dumitru.

From the last part of last year, investors’ appetite for bonds has risen, the value of fixed-income trades exceeding the stocks’ liquidity in repeated sessions.

There are often traded state securities, city bonds and the bonds issued by the International Bank for Reconstruction and Development.

Thus, the returns of bonds floated at Bucharest Stock Exchange recorded a double growth compared to early 2008 amid rising banking interests.

Brokers’ Association is jointly organizing with Bucharest Stock Exchange a conference on evolution of bonds, which is designed to highlight the advantages of these products, followed by a seminar on the same topic.

“Apart from the low risks, bonds are within reach for all uncreditworthy companies and they are hesitant in launching listing offers. On one hand, the managers may not be convinced to widen their shareholdership and to lose control again, and on the other hand, I don’t how will the market react to this offer”, said Dumitru.

BSE aims enhancing transparency of mechanisms

Bucharest Stock Exchange plans on opening the institution for public in the coming period. The program is running since last week, when “Open Doors Day at BSE” project was launched.

Thus, any person interested can witness the opening of the stock exchange. The purpose of the project is enhance the transparency of the institution and to provide accurate information on a possible further listing in the capital market.

“There is a problem of confidence in Romania. There was no event so far heavy enough to shake up the quotations, caused by financial crisis. We live in a global economy where money circulates and we cannot be completely isolated. This is why we try to promote companies with solid financial results, although their actual market value is not justified by the fundamental indicators”, said Anca Dumitru.