The Romanian capital market set new all-time highs in terms of liquidity in 2022, a year marked by volatility and uncertainties.

The Bucharest Stock Exchange (BVB) reached a new record in 2022 in terms of the total value of transactions carried out on all markets with all types of financial instruments - RON 24 billion (EUR 4.9 bln), up 11% compared to 2021 when this value was RON 21.6 billion. In the equity segment, the total value of transactions reached almost RON 13.5 billion (EUR 2.75 bln), up 17% year-on-year.

The average daily trading liquidity for all types of financial instruments listed on the Bucharest Stock Exchange’s Regulated Market (RM) and the Multilateral Trading System (MTS) was RON 95.6 million (EUR 19.5 mln), a new record for the local market.

The BVB investors also set a new record in 2022 in terms of the number of transactions with all types of financial instruments carried out in all markets: more than 1.67 million transactions, up 9% versus 2021.

These results came against a difficult regional and international context marked mainly by the war in Ukraine, the increase in monetary policy interest rates, double-digit inflation rates, the persistence of the inflationary phenomenon, the increase in energy prices, as well as the disruption of supply chains. These factors affected all international capital markets and, in such a difficult regional and international context, all BVB indices ended 2022 in the red, but with a decline below the level shown by the S&P500 in the US or the STOXX600 in the EU.

The BET index, which includes the 20 most liquid companies listed on the BVB, recorded a 10.7% drop at the end of last year, to a level of 11,663 points. The BET-TR index, which also factors in the dividend yields, fell by almost 1.9% and reached 22,686 points. By comparison, the European STOXX600 index fell last year by 12.9%, while the US S&P500 index fell by 19.4%.

“The year 2022 was a real carousel for the international capital markets, which were marked by heightened volatility. After a very long period characterized by relaxed monetary policies, inflationary pressures led to the start of a cycle of aggressive interest rate increases at the global level,” said Radu Hanga, President of the Bucharest Stock Exchange.

He added: “What was remarkable in 2022 is that capital market funding rounds continued, albeit at a slower pace, providing clear evidence that we are effectively fulfilling our role as a critical pillar of financing the economy.”

Financing rounds continued in 2022, number of investors climbed by 56%

In 2022, 42 financing rounds were carried out at BVB, more than half of the 2021 record. The total value of last year’s financing rounds reached EUR 1.9 billion, being very close to the maximum in 2021, of EUR 2 billion. In the last 4 years, 149 financing rounds took place at the BVB, which totaled EUR 6.1 billion. Of the 149 rounds, 38 were equity issues and 111 were bond issues.

At the end of September 2022, the number of active investors on the Bucharest Stock Exchange reached over 128,000, a record-high for the Romanian capital market. By comparison, at the end of 2021, there were fewer than 82,000 active investors on the Bucharest Stock Exchange. This translates into a 56% increase in the first 9 months of 2022 compared to the figure at the end of 2021 and a 137% increase compared to the number just four years ago.

“The year 2022 unequivocally showed that the liquidity parameters of the stock market have reached record levels, breaking the highs reached in the previous year. It is important to note that during a complicated year for all capital markets, the Romanian stock market posted all-time highs on three levels of liquidity: record total transactions of RON 24 billion, average daily liquidity of almost RON 100 million, and nearly 1.7 million transactions,” commented Adrian Tanase, CEO of the Bucharest Stock Exchange.

“Our efforts to significantly improve liquidity, especially in the equity segment, will continue in a sustained manner, and the efforts from recent years to make the market more efficient are now being reflected also by the evolution of the BVB share, which last year recorded the best performance in the BET index, with an increase of almost 40%, considering only the price appreciation. If we also take into account dividends, then the yield is over 42%,” he added.

What to expect on the Bucharest Stock Exchange in 2023?

“Looking to the near future, we believe that the trend of listings will continue this year and we have clear signals that new Romanian and regional companies are preparing to come to the stock market. The announced listings of Hidroelectrica and Salrom, approved by the Romanian State and where Fondul Proprietatea will be the one selling its holdings, can be a catalyst for accelerating the pace of listings on the BVB, because they will attract even more attention from investors and because they will increase the chances of Romania being promoted to the Emerging Market status by the global index provider MSCI. We are confident that more and more Romanians will access the opportunities offered by the capital market and that more and more companies will choose to benefit from the advantages of being listed on the stock exchange,” said Radu Hanga, President of the Bucharest Stock Exchange.

Adrian Tanase, CEO of the Bucharest Stock Exchange added: “The listing of Hidroelectrica and the Central Counterparty are the flagship elements that we expect in the capital market in 2023, and we believe that, together, these elements can contribute, in the medium and long term, to doubling the liquidity of the market. This objective is also supported by the periodic financing with Fidelis government bonds and the simplification of tax procedures because the Romanian state is an important partner of the capital market. We estimate that we can reach 500,000 investors in the next 2-3 years, after reaching a record-high of 128,000 investors at the end of Q3 2022, which is more than double the number of 54,000 investors recorded only four years prior. The capital market has changed fundamentally in the last four years, during which almost 150 financing rounds of over EUR 6 billion were performed through the BVB.”

editor@romania-insider.com

(Photo source: BVB)