JUNE 2013 - FEAS

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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013BUCHAREST STOCK EXCHANGEKey figures in 2011New listed companies: Fondul Proprietatea,Concefa, Retrasib, Electromagnetica, ArtegoREITs: New Property InvestmentsNew shares on the BVB Alternative TradingSystem: E.ON AG, Deutsche Telekom AG andBayer AG, Christian Dior, Danone, Heineken andL’Oreal sharesNews:• the trading session for structured productsand securities traded within ATS Internationalwas extended.• global accounts and non pre-validationmechanisms availability for the shares in theBET index developed by BVB.• new Market Makers for BVB regulated spot,derivatives and ATS markets.Derivatives market: new futures contracts withcommodities, index, shares and currencies asunderlying.Structured products: certificates turbo longand short issued by Erste Group Bank AG andRaiffeisen Centrobank AG with index, shares,commodities, currencies as underlying.FUTURE OUTLOOKHow does 2013 look like:• SPO for 15% of Transgaz shares -oversubscribed offer, process finalized onApril 22• IPOs of SOEs included in the privatizationprogram - Romgaz in H2.2013,Nuclearelectrica TBD, Hidroelectrica TBD,Posta Romana TBD• Support the IPOs and listing of the SOEsand private companies on the domesticexchange• Consultancy for IPO rolling and listing ofSOEs in a joint BVB-OPSPI pilot program• Support the IPOs of private Romaniancompanies with sizes between 20-60 EUR m• BVB, on the medium term, to achieveupgrade from frontier to emerging market, asper MSCI Market Classification Framework.In order to upgrade, there are no criteriaon economic development to be achieved,BVB already fulfills the market accesibilitycriteria, but does not comply with the sizeand liquidity requirements (at least 3 largecompanies, with minimum capitalization ofUS$ 898 m, float capitalization of US$ 449 mand 15% of ATVR liquidity)• To improve by the capital market institutionsthe trading and post-trading mechanismsand the regulatory framework in order toease and to make cost effective the accessof foreign investors to the market• Develop the corporate governanceframework at national level by supportingthe implementation of the CorporateGovernance Code, the GEO 109/2011 andthe recruitment of private managers for SOEs• Design a national strategy for capitalmarket, which will consolidate a series ofobjectives to be reached in a predictableand encouraging regulatory and fiscalenvironment.The main purpose of BVB is to fulfill its primaryrole of offering a consistent financing alternativeto Romanian companiesCAPITAL MARKET DEVELOPMENTAND ECONOMIC OUTLOOKExternal Factors• Coming from the changes in the EU capitalmarket regulatory framework, as well asfrom the European economic and businessclimate• MIFID2 and the effects of its implementation,like the tighter requirements on portfoliomanagement, investment consultancyand investors protection. On local market,Corporate Governance training needs to beintensified• EMIR and the effects on the derivativesmarket and the CCP• The foreign stock-exchanges consolidationprocess brings pressure to small exchangesin terms of market accessibility and pricingpolicyInternal Factors• Coming from the macroeconomic climateand the domestic capital market architecture• The roll of the public offers through BVB,based on a pre-established calendar• The functioning of the domestic capitalmarket as per the best practices in the field,so that foreign investors trade on BVB at thestandards they are used to “back home”Key Information ContactsNational Securities Commission www.cnvmr.roNational Bank of Romania www.bnro.roNational Institute of Statistics www.insse.roMinistry of Public Finance www.mfinante.roRomanian capital market www.kmarket.roRomanian Asset Management Association www.aaf.roPrivate Pension System Supervisory Commission www.csspp.roCONTACT INFORMATIONContact Name Ms. Ileana Botez E-mail communication@bvb.ro Website www.bvb.roPAGE 36
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013BULGARIAN STOCK EXCHANGEThe necessity and efficiency of organizedmarkets have been seriously put intoquestion.Ivan TakevCEOWe observed that in 2012, similar to theprevious years, the world capital marketsremained under the strong impact of theongoing global financial crisis, the effect ofwhich has been a substantial reduction intrading volumes. As a result, the necessity andefficiency of organized markets have beenseriously put into question.Although the Bulgarian Stock Exchangeregistered in the past year a 20% increase inits turnover and a generally good performanceof its major indices, we still do not see anysignificant signs of a sustainable upward trend.In order to cope with the continuing crisis thevarious countries have looked for differentsolutions and launched diverse initiatives.In Bulgaria, privatization through the stockexchange was the main anti-crisis tool usedby the government to generate a positiveeffect on our market. The successful sale lastyear of the 33% state-owned minority stake inthe three major electricity power supply anddistribution companies - Energo-Pro, CEZ andEVN - through the BSE, triggered the interest ofthe investors and boosted the liquidity on themarket.After these big-scale privatization deals thegovernment’s resources to support the stockmarket seem to have been more or lessexhausted (if we don’t take into account thepossible measures it could undertake forimproving the existing regulatory framework).This situation has stimulated the marketparticipants to search for innovative anti-crisissolutions and to adjust their business modelsin order to be able to face the current financialturbulences.The BSE, for example, is intent on using itsexpertise to further develop the clearing andsettlement infrastructure. This should facilitatethe introduction of new tradable financialinstruments on the stock market. Among ourimmediate goals is also to set up and launch anorganized market for carbon emissions trading.We firmly believe that all these efforts will furtherrestore the confidence in our capital market andattract a new wave of investors and potentialissuer companies in the coming months.HISTORY AND DEVELOPMENTThe first Stock Exchange Act was adoptedin 1907 and regulated the structure andoperations of stock and commoditiesexchanges. The Securities, Stock Exchanges& Investment Intermediaries Act was adoptedin July 1995, which led to a process of stockexchange consolidation. In July 1997, thepresent Bulgarian Stock Exchange-Sofiawas established. In accordance with therequirements of the new law, a Securities& Stock Exchange Commission was set up.On 9 October 1997 the Commission officiallylicensed the BSE-Sofia. The first trading sessionon the regulated market took place on 21October 1997. By the end of 1999 there were32 companies listed on the Official Market andabout 1,000 companies admitted for trading onthe Free (OTC) Market as a result of the massprivatization program. On 6 December 2001 theCommission officially licensed the BSE-Sofia toorganize an Unofficial Market, which replacedthe Free Market and set clear rules for regulationof all companies traded on the Exchange.In December 1999 a new Public Offering ofSecurities Act was adopted by the Parliament.The law is aimed at providing protection forinvestors and creating prerequisites for thedevelopment of a transparent capital marketin Bulgaria with criteria similar to those of theEuropean Union.The Securities & Stock Exchange Commissionwas first renamed the National SecuritiesCommission, but in March 2003 it wasreplaced by a new supervisory body - theFinancial Supervision Commission (FSC).More than just a name change, the movepulled together the regulation of a numberof financial (non-banking) sectors under onebody. The regulatory changes during the yeardirectly improved conditions for investors andissuers, as well as underlined the government’scommitment to encourage wider overalldevelopment of the capital markets.FUTURE OUTLOOK• Successful sale of the 50% state-ownedshare in the exchange and the CentralSecurities Depository. The process isexpected to be completed till mid-2013;• BSE-Sofia on the way to wider internationalrecognition and stronger investmentappetite;• Expansion of the clearing services portfolioand adoption of internationally acceptedbest practices in the post-trading space withthe aim to attract more foreign investors;• Easier flow of foreign capital;• Long-awaited recovery of the local capitalmarket;PAGE 37
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JUNE 2013 - FEAS

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